Mortgage 101

Buying a home is an exciting prospect and most people tend to focus on choosing the type of home they want along with the location and other amenities. However, there is an important element that exists in most home sales and that is the mortgage.

 


Read a few of our articles explaining more about mortgages.

• What Is A Mortgage & The Basic Requirements

Whenever you purchase a home and you don't pay the full price in cash, you have to obtain financing. This type of financing is a mortgage. When you take out a mortgage you are using the property as collateral. If you fail to repay the mortgage on the terms you agreed to, the bank or lending company has the right to take over possession of your property. Therefore it's very important to choose a mortgage that will fit into your budget. To read more, click here.

• A Summary Of Mortgage Fees And Closing Costs

Closing costs are expenses over and above the price of the property in a real estate transaction. Mortgage loans have a number of associated costs and are due when the buyer signs the loan documents. This takes place at the close of the real estate transaction, hence the term closing and closing costs. Depending on the language in your purchase contract or State law, the seller may end up paying for some of these costs. To read more, click here.

• Understanding Mortgage Rates

Mortgage lenders display their interest rates prominently, but they seldom explain exactly how those rates work. When you take out a mortgage, your lender determines the rate of interest you’ll be charged for a portion of, or for the duration of your loan. This rate is heavily influenced by the overall economy’s interest rates. To read more, click here.

• What Are Discount Points And Lender Credits And How They Work

Points, also known as “discount points,” are fees paid directly to the lender at closing in exchange for a reduced interest rate. This is also called “buying down the rate,” which can, in turn, lower your monthly mortgage payments. A point is equal to 1% of your mortgage amount (or $1,000 for every $100,000). Lender credits lower your closing costs in exchange for a higher interest rate. To read more, click here.

• FHA Mortgage Loans

The biggest resource for home buyers is the Federal Housing Administration (FHA). They work by providing private mortgage lenders with guarantees (insurance) against the loan that you take out with them. They help home ownership become a reality for many who don’t have perfect credit or have the finances available to otherwise afford the hefty upfront payment sometimes required to buy a home. To read more, click here.

• Coventional Mortgage Loans

A conventional loan is a mortgage that is not guaranteed or insured by any government agency like the FHA or VA loan. Conventional loans are once again growing in popularity thanks to new programs offering low rates and increasingly flexible guidelines. While a conventional mortgage appeals to a wide demographic, it's especially good for first-time borrowers with decent credit and some amount of down payment. To read more, click here.

• Mortgage Brokers And Direct Lenders: Which is Best?

When applying for a mortgage, you have two options to choose from: mortgage brokers or direct lenders. How do you know which one to choose? Well, the decision on which one to go with is ultimately up to you. Direct lenders and mortgage brokers have quite a bit in common, but they are also different in a number of ways. To read more, click here.

• How To Shop For A Mortgage

We shop to find the best price for many items like laptops, TV’s and appliances, but a report of recent mortgage borrowers found that almost half of us don’t shop around for a mortgage when we buy a home. Failing to shop for a mortgage could cost you. Consumers who consider interest rates offered by multiple lenders or brokers may see substantial differences in the rates. To read more, click here.

• Get Multiple Loan Estimates When You Shop For A Mortgage Without Hurting Your Credit

As a consumer, you have the right to shop for the lowest available mortgage rate, and you can do it without fear of harming your score. Today's credit score rules specifically protect mortgage applicants who are shopping for today's best mortgage rates. The credit bureaus say it plainly on their sites: Your credit scores do not drop when a mortgage lender pulls your credit. To read more, click here.

• Debt To Income Ratios Is Just As Important As Your Credit Score To Lenders

Your debt-to-income ratio (DTI) is a simple way of calculating how much of your monthly income goes toward debt payments. Lenders use the DTI to determine how much money they can safely loan you toward a home purchase or mortgage refinancing. Everyone knows that their credit score is an important factor in qualifying for a loan. But in reality, the DTI is every bit as important as the credit score. To read more, click here.

• How Your Credit Score Is Calculated

It's important for every consumer to learn what a credit score is and how to improve it. Most consumers do not know what their credit scores are, but these scores are used in dealings with such diverse agencies as credit card companies, mortgage lenders, auto loan lenders, and finance companies when considering applications for credit or loans.To read more, click here.

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