This is a YouTube video titled "💫 What all goes into a Mortgage Payment? 💫" featuring a conversation between Gina and Derek McGowan recorded in September 2021. The discussion focuses on explaining the components of a mortgage payment, including principal, interest, taxes, insurance, and mortgage insurance, aimed at helping first-time homebuyers understand the full cost beyond basic online calculators.
Hey, guys. Gina, back here. I'm super excited today because my guest is Derek McGowan. He is over in our Kansas City, Missouri office. So I'm really excited to have you today, Derek. Thanks so much for joining me.
Yeah, no, thank you so much for having me. I'm excited to be here.
Awesome. Well, I have a really important question for you, Deborah, and it's actually kind of a personal question too, because I remember, I guess it was probably 16 or 17 years ago when my husband and I first started looking at our very first house. We decided we were ready to make that step. And, you know, as we were kind of looking at different properties, I had no idea what our actual house payment would be. And I went online to some of those fun calculators.
Yep, yep.
Yeah. And the number I got was way different than the number that it actually was. So can you kind of walk us through what all is involved in your house payment?
Absolutely. No, that's the, that's the huge question everybody has. So. Yeah, no, I completely, completely get that. Yeah. So we'll start off with what the most of the calculators show, like if you go to the Zillow or realtor.com or whatnot, and that's generally the principal and the interest part of it, which the principal is you repaying the actual loan that you took out on the house. And the interest is of course, the interest on that loan. But that's where kind of a lot of those calculators seem to stop. And they give you just the very base part of the payment. And that's where, especially as a first time homebuyer, a lot of people have confusion because they see this awesome low payment, it looks really appealing, and then they get interested to fall in love with the house, and then they realize, oh, shoot, there's actually a little bit more involved to this. So the rest of it, you have taxes, unless there's some exemption type thing, but 99% of the time you're going to pay taxes on that house. So that is a part of it as well that comes from the county, but they generally break that up into 12 payments to make up for the whole year's worth of taxes. You have your monthly payment portion and then same kind of concept with your homeowner's insurance. And that's where the, the buyer, the homeowner themselves generally shops. So they have the freedom to decide who insures the house, but somebody has to insure it and they will have some sort of an insurance premium that generally is broken up into 12 monthly payments. So they have the acronym the PITI or principal interest, taxes and insurance. And then depending on the loan type and how much somebody puts down, there could be mortgage insurance as well. If there's less than 20% down, for example, they would have mortgage insurance on a conventional loan, but that wraps up the full payment. So as you see, there's a few other little not hidden things, but on some calculators, they just kind of delicately forget to put those in.
Exactly. Yeah.
That is the houses, I guess if they have a super low payment, they get clicks on their links to the houses, but then the whole payment comes out.
Exactly, yeah. Number was completely different. Many hundred dollars more. So yeah, that's awesome. Thanks so much for clearing that up. And I know that's super helpful information because as you said, that's a big question for a lot of people.
That's a daily question we get. I'm sure, you know, every single time people find out. I mean, now, now nowadays everybody finds their house online and there's some sort of a payment next to that, you know, the pretty pictures of the house. But that kind of, you know, entices people. And I guess those sites are doing what they feel like they're doing best, but you know, it gets people interested and then the rest of the payment kind of comes out. So that's what we're here to kind of help people with.
Awesome. Thanks so much, Derek. And if you guys out there, if you have any questions, please reach out to Derek and his team. They can definitely point you in the right direction. They are the pros.
Thank you so much. I appreciate it.
We'll see you guys later. Bye.
Bye. Bye.
