Bloomfield Hills Real Estate: 3 Things You Need to Know About the Mortgage Payment for Your Home

Posted in Bloomfield Hills Real Estate by Michigan Real Estate Expert on August 19th, 2010

When you look for a mortgage to purchase Bloomfield Hills real estate, you want to find one that allows you to buy the biggest house possible for a monthly payment you can afford. This seems simple enough. All you need to do is a little division to determine your monthly payment.

Home Mortgage payment on your Bloomfield Hills real estate

Unfortunately, this isn’t the entire picture of your monthly mortgage payment, and lenders don’t always explain this to you. Here are three things you need to know about your monthly mortgage payment for your new Bloomfield Hills home:

1. Interest and Principal. Only part of your monthly mortgage payment actually pays down your loan. A portion of your mortgage payment goes toward your loan principal and part of it pays the interest. The longer you have your loan, the more money goes toward your principal. Be aware that at the beginning of your loan term, most of your payment goes toward interest and does little to reduce the amount of money you owe on your home.

2. Homeowner’s Insurance and PMI. Typically, your lender collects money to pay your homeowner’s insurance premium. This increases the amount of your monthly payment and can change if your insurance company raises or lowers premiums. Depending on your loan amount and property value, you may also have to pay private mortgage insurance (PMI) which protects a lender against loss if you default on your loan.

3. Property Taxes. In most cases, your annual property taxes will be paid through your lender. The lender collects extra money each month that they pay to your local government at the end of the year. When local taxes increase or decrease, so does your payment.

Call me today at 248-514-2640 or email me at to help you find the home (and mortgage provider) of your dreams.

Lee Morof sells North Woodward Homes in Oakland County Michigan RE/MAX Showcase Homes

Lee Morof
Associate Broker/Attorney
RE/MAX Showcase Homes
Birmingham, Michigan
Call:  248-514-2640

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