When it comes to figuring out mortgages many people use the phrase, “it’s all Greek to me” but figuring out how mortgages work is actually quite simple.

First, a mortgage is a loan from a lender to a borrower to buy a piece of real property (a fancy way to say house, land, etc). The interest on the mortgage is the percentage of money the borrower agrees to pay the lender each year, in return for lending the money.

Here is where it gets complicated, the lender wants to loan to be affordable for the borrower so they spread the interest out over time. This is called amortization. Amortization is the amount of money that goes toward principal (the amount of the loan) and interest. This amount changes over time because the interest owed is spread over time.

There is a booklet put out by the U.S. Department of Housing and Urban Development that explains the mortgage and interest process. You can find the booklet here.

Now often your payment is more than just the principal and interest. A monthly mortgage payment is often called a PITI payment. No, not pity even though you might need pity when looking at your loan statement. PITI stands for:

Principal – the loan balance

Interest – interest owed on that balance

Real estate Taxes – taxes assessed by different government agencies to pay for school construction, fire department service, etc.

Property Insurance – insurance coverage against theft, fire, hurricanes and other disasters

There may also be other fees depending on the kind of mortgage you have. Your monthly payment may also include private mortgage insurance (PMI).

Remember there is a lot to know about mortgages beyond the rate so be sure to talk to a mortgage professional to make sure you fully understand your payment options.



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The fire on Branch Street in Lowell this week was the worst our state has seen in over a decade.  Seven died, including three children, and more than 50 were displaced, losing their homes and everything in them.  In reaction to the devastating losses, LAER Realty Partners is stepping in to offer support by offering donations to the families through Cambodian Mutual Assistance Association and by offering complimentary relocation services to those displaced.

“The outpouring of support has been amazing,” says Stacey Alcorn, co-owner of LAER.  “We have had real estate agents from across the state reach out offering support.”

Here’s how you too can support the families.

1. Stop by any LAER office between now and Wednesday, July 16th, and donate clothing, household goods, toys, or anything that the families can use in rebuilding their homes.

2. If you have a home or apartment in the Merrimack Valley area which you are interested in renting out to one of the families please reach out to a LAER agent so that we may add your property to the list of those available for lease.  LAER Realty is offering complimentary relocation services to the families that have been displaced.

3. Make donations to the families through the Cambodian Mutual Assistance Association GoFundMe page for the Branch Street fire victims.

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