Mortgage Information - Refinancing? Second Mortgage? Home Equity Loan? Understand The BasicsWritten by Carrie Reeder
A mortgage is usually biggest purchase that an individual makes, and because of that, many people tend to get nervous during process. But wouldn’t it make things easier if you felt that you had a “handle” on process—or at least terminology? After all, in order to get best deal on your mortgage loan, you will need to understand certain things such as points, interest rates and closing costs. If you feel like you could stand to brush up on your mortgage loan terminology, why not read following common terms and their definitions? Points A point is amount that a borrower will pay in order to reduce interest rate on their mortgage. One point is generally equal to 1% of loan amount. For example, if you were taking out a 100,000 mortgage, and wanted lower interest rates, you might have to pay anywhere from 1-3 points (or $1,000-3,000 dollars) to get that rate. It’s important to note that some lenders will advertise very low interest rates, and only when you read fine print will you learn that you will have to pay points in order to get them. Interest Rates When a lender makes a loan, they make money by charging interest on that loan. With a mortgage loan, all of that interest is front-loaded, which means that for first few years, every payment that you will make will go mostly toward interest. When applying for a mortgage, you will have option of “locking-in,” or “floating” your interest rate. If you choose to lock-in your rate, then you will be assured—for about 60 days—that when you close it will be at that rate. However, if it appears that interest rates will go lower, you can choose to float interest rate, which means that you can watch rates carefully, and then lock it in whenever it reaches an amount that you are comfortable with.
| | Residential Mortgage - Finding The Best Home Mortgage LenderWritten by Carrie Reeder
Most people approach act of getting a home mortgage purchase or refinance loan wrong way. They timidly approach lenders and cross their fingers that they will quality for that all-important loan. But that’s just opposite of what most people should be doing!There are a lot of lenders out there—some great and others that can be difficult to work with. And here’s good news—they all want your business! Before agreeing to a contract with just any lender, you should make an appointment with (in person or by telephone) and ask them some important questions. Doing so could make difference in a wonderful experience and one that you’d rather forget. If you are in process of applying for a mortgage loan—either online or off—then you should ask following questions to every lender that you are considering. • What are my loan options? Some lenders specialize in only fixed-rate mortgages and you couldn’t get an ARM if you begged. It’s important to know your options up-front. • What is interest rate? You can easily go online and find competitive interest rate on any given day, and you should ensure that your chosen mortgage lender is offering you one in line with market. • How many points will I have to pay to guarantee that rate? Just because someone offers you a great interest rate, that doesn’t mean there won’t be strings attached. Be sure and ask if interest rate they quoted you is contingent on your buying points.
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