Principal Residence Mortgage

A principal residence is the place you live in for the majority of the year and for many people their principal residence is their only residence.

A principal residence mortgage will apply to this place that you live in most of the time whether it be a house, condominium, apartment or trailer.

Your principal residence mortgage will not only facilitate homeownership, it can also offer you an important tax benefit because the interest you pay on your mortgage while you own your house is deductible.

This can be confusing if you live in one part of your house and rent the other parts because homes that are duplexes or triplexes are treated as different properties when it comes to taxation. In this case your principal residence will be the part of the house in which you live and the other parts will be considered as a rental property.

Principal residence mortgages are paid, as most mortgages are, with fixed or adjustable-rate mortgage plans in accordance with current mortgage rates.

Usually a homeowner will need to invest in mortgage insurance for their principal residence mortgage. Most lenders require mortgage insurance when the borrower has put down a down payment of less than 20 percent of their houses purchase price.

If a borrower is unable to pay their principal residence mortgage they may be required to take out a second mortgage or consider other refinancing options to repay a lender.

Principal residence mortgages are important because, in most cases, they are providing the financing for a place you live in on a day-to-day basis so it is important that they be paid off promptly.