New Owner Tips
You're A Homeowner!
Congratulations! You've reached an important milestone in your life
and joined the millions of Americans who carry the title of "homeowner"
with pride. There is much to enjoy now that you own a home. And
there are a number of important things to keep in mind. In this
section we explore:
1) Handling Your Mortgage Payment
This section explores making your mortgage payments, paying property
taxes and homeowner's insurance, escrow accounts, and typical questions
many homeowners have about mortgage payments.
2) Taking Care of Your
Investment
You've just made a big investment, so you will want to protect it.
This section provides tips for learning about your home's systems,
maintaining your home, and taking care of your budget.
Related Articles for Handling Your Mortgage Payments
Handling Your Mortgage Payment
Making Your Mortgage Payments
Your lender will mail you a coupon book or statements along with
addressed envelopes to make it easier to send in monthly payments.
Many lenders also offer the option of having the payment automatically
deducted from your bank account. You can, if you wish, pay extra
on your mortgage to build equity and pay off your loan in a shorter
amount of time. Talk to your lender if you are interested in this
option.
Paying Property Taxes and Homeowner's Insurance Premiums
Most homeowners choose to have their property taxes and homeowner's
insurance premiums included in their monthly mortgage payment. Your
lender will hold these payments in an escrow account and use those
funds to pay the property taxes and insurance premiums when they
fall due. The taxing authority and insurance company will send your
bills directly to your lender and a notice marked "do not pay"
to you. Sometimes, especially in the first year of your loan, you
may receive these bills. If that happens, forward them to your lender
right away. (Some homeowners prefer to pay property taxes and insurance
premiums on a quarterly or annual basis. Ask your lender for details
if you are interested in doing this.)
Managing Your Escrow Account
Your lender will send you an annual statement showing the amount
of principal and interest paid during the year and the balance in
your escrow account. The statement will include an accounting of
your tax and insurance payments as well. (Remember that if taxes
and insurance premiums increase, you will see an increase in the
monthly amounts required for these payments.) You will also receive
a tax statement at the beginning of each year that shows the amount
of interest and taxes you have paid. (Some of these items may be
tax deductible.)
What Happens If I Cannot Make the Mortgage Payments?
Your lender understands that anyone can suddenly have financial
problems that can make paying a mortgage difficult. If you find
yourself in this situation, call your lender right away. You may
be able to work out a different payment schedule that will be acceptable
to both you and the lender until your financial situation improves.
What Happens If My Loan is Sold To Another Company?
Mortgage loans are sometimes sold or traded among lending companies.
You may get a letter from your lender letting you know that your
loan is being transferred to another company. You will also receive
a letter from the new company. (Keep copies of these letters for
your records.) The only thing that will change is the name of the
company on your mortgage payment checks.
- Your mortgage will not be affected
- Your payments will remain the same
- Your interest rate will remain the same
- You will get new envelopes and a coupon book or statements
- If you make mortgage payments through automatic deduction, you
will receive a letter letting you know how to authorize your bank
to make those payments to the new company
Continue to New Owner Tips
Page 2: Taking Care of Your Investment
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