Income and Mortgage Mind Map

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Income and Mortgage Mind Map by Mind Map: Income and Mortgage Mind Map

1. monthly payments can increase or decrease

2. designed to completely pay off the loan balance over a set amount of time

3. Bigger Down Payments

3.1. the smaller the loan, the less interest will have to be paid

3.2. the private mortgage insurance will not have to be paid if 20% or more is put down.

4. Amortization

4.1. interest cost are at a all time high at the beginning of the loan

4.2. loan payments do not change

4.3. A $200,000

5. Fixed Rate Mortgage

5.1. same payment for the entire term of the loan

5.2. 15 or 30 year loans

5.3. paying more than required will help eliminate debt faster

5.4. borrowers are protected from any sudden and potentially significant increases in monthly mortgage payments if interest rates arise

6. Adjustable Rate Mortgage

6.1. rates adjusts once a year at the end of a fixed rate period

6.2. the rise of interest rates will cause payments to increase

6.3. 30 year mortgages

7. Choose A Shorter Loan

7.1. could get a better interest rate

7.2. lots of money will be saved over the life of the loan

7.3. payments will be higher if a 15 year mortgage is chosen over a 30 year mortgage.

8. a $200,000 mortgage at 5% interest would carry a monthly payment of $1,073.64. The first month $833.33 would go to interest and $240.31 will go towards the principal

9. Annual percentage rate

9.1. interest plus fees and any other one time costs associated with the loan

9.2. helps compare the different interest rates and costs of different lenders

10. Closing Cost

10.1. the amount of money needed to close the mortgage deal

10.2. could include title insurance, escrow fees, lender charges, real estate commission, transfer taxes and recording fees

10.3. total closing cost is expected to be between 2% and 5% of the purchase price.

11. equity builds up as the mortgage is paid down

12. mortgage insurance is generally required for borrowers who put down less than 20%, in case of default the mortgage insurance protects the lender.

13. private mortgage insurance can be requested to be cancel after 20% equity is reached in the home.

14. Noninstallment Credit

14.1. secured or unsecured

14.2. no monthly payments, payment is due in a lump sum for the full amount owed

14.3. due in a short period of time

14.4. no monthly payment

15. Installment Closed End Credit

15.1. a certain amount of credit is given to purchase a item or a few

15.2. a certain amount of credit is given to purchase a item or a few

16. Revolving Open End Credit

16.1. part of the used credit must be paid off at the end of the period

16.2. does not close unless the company closes it