When buying a Boston condo for sale, you’ll obtain a mortgage (unless you pay in cash). When it comes to getting a mortgage, there is usually going to be more than just the amount you pay back to the bank on the bill each month. Here are some of the basic components of an average mortgage payment if you’re purchasing a Boston Beacon Hill condo for sale.
This is the actual amount a borrower receives from the bank for the purchase of the Boston condo. Early in the life of the loan, little of the payment will go toward paying back the principal. The amount of principal paid each month will go up over time as the borrower pays back the loan.
This part of a mortgage payment goes to the bank for the privilege of borrowing. Interest payments can be fixed or variable. The amount of interest paid is inverse to the amount of principal that gets paid back over time, as the interest is calculated on the amount of principal that’s still outstanding.
Private Mortgage Insurance (PMI)
PMI is an expense that not every property buyer will pay, but many lenders require this form of insurance. Only borrowers who had a down payment of less than 20 percent will have to pay for PMI, whereas those who put down more than this amount will avoid paying PMI altogether.
Most banks require borrowers to purchase a homeowners insurance policy. This form of insurance will protect both borrowers and lenders from fires and other common hazards that can destroy a property. In the event of a loss, owners of a Beacon Hill condo will only have to pay their deductible.
With few exceptions, just about anyone who purchases a Boston Beacon Hill condo or loft will have to pay taxes to the local jurisdiction. These taxes are generally based on the value of the property and go to support local schools, police, fire departments, and other assorted services.
If you’d like to learn more about mortgages, or if you’re interested in seeing the latest listings for Beacon Hill condos, penthouses, and Boston high rise condos, please contact us today. Call 617-720-5454 to set up an appointment.
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