Track 23 of 25

Mortgages

PITI, fixed against adjustable, points, escrow, and a foreclosure clock measured in months. The house as collateral you still live in.

25 lessons

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The four parts of a monthly paymentA housing payment is four numbers added, and only two of them are the loan.6 min
Principal and interest, splitThe first payment is mostly interest because the whole principal is still sitting there.6 min
Taxes and insurance inside the paymentTax and insurance ride inside the payment on clocks the loan itself does not set.7 min
Fixed against adjustableA fixed rate holds the payment; an adjustable rate holds it only until the date the loan wrote.7 min
ARM: index plus a marginAn ARM rate is an index plus a margin, the same two-part sum a securities line already uses.6 min
ARM caps: initial, periodic, lifetimeThree caps bound a reset: the first step, each later step, and a ceiling that does not move.7 min
ARM reset arithmeticA reset recomputes the installment on the remaining balance for the months that are left.6 min
Why a policy-rate rise reaches a home equity line within weeks and an ARM only at its resetA home equity line reprices with the policy rate; an ARM waits for the date it already wrote.7 min
A fixed loan and an adjustable loan through two rate increasesTwo policy increases can pass a line, miss a fixed mortgage, and reach an ARM only later.7 min
Points: prepaid interest as a rate tradePoints are interest paid on day one in exchange for a lower rate on every month after.7 min
Reading an amortization scheduleThe schedule is a chain of remaining balances; each row is last month minus this month's principal.6 min
Why the early years are mostly interestEarly years are mostly interest because the unpaid principal is still almost the whole loan.7 min
Down payment on a houseCash paid at the start sets day-one loan to value on a house that is still the same house.6 min
Conventional mortgage insurance, at a mechanical levelMortgage insurance is a charge on the slice above eighty percent LTV, not a cut in the balance.7 min
Government-backed mortgage insurance, at a mechanical levelFinancing an insurance premium raises the loan against a house whose cash price did not move.7 min
The debt-to-income ratios lenders computeTwo ratios on the same income test housing alone and housing plus every other claim.6 min
Front-end against back-endA new car installment leaves the housing ratio still and moves the ratio the lender actually stacks.7 min
Escrow, mechanicallyEscrow is a prepaid reserve; the payment you see is the average of bills the lender pays when due.6 min
Escrow shortagesAn escrow shortage is a capacity change that arrives without any movement in the rate.6 min
How rising tax, insurance and association dues raise a fixed-rate paymentA fixed rate holds the principal-and-interest line; tax, insurance and dues can still lift the total.6 min
Refinancing break-even, as arithmeticBreak-even is prepaid cost divided by monthly difference, an identity that does not choose a loan.6 min
Cash-out refinancingCash taken against a house you still live in raises the loan while the denominator stays put.6 min
Home equity lines, and the house behind other spendingA home equity line is a second claim on the same house, typically variable and often payable on demand.7 min
The foreclosure timeline, judicial against non-judicialForeclosure is a margin call with a long clock, judicial or not, always measured in months not days.8 min
Forbearance and modification as mechanismsForbearance pauses the clock; modification rewrites the terms; neither erases the balance that accrued.7 min

Educational only. Nothing in this track is investment, legal or tax advice, or a recommendation to enter into any transaction. Completion is stored in this browser and nowhere else.