May 10th, 2018 7:13 AM by Jackie A. Graves, President
a significant consumer misconception that mortgages are all about interest
rates. Find the lowest rate and you've got a great mortgage.
sign-up interest rate can be important, but there is a lot more to consider.
The many factors and decisions involved in mortgages determine what the
mortgage loan will be like to live with now and in the years of home ownership
ahead. Will you be house rich and cash poor? Will you have manageable monthly
payments and low mortgage costs?
difference between these two extremes lies in how effectively borrowers select
the type, features, and interest rate pattern when they arrange the mortgage
Question: Are you prepared to invest time to locate real estate and
mortgage professionals with knowledge and track records that match your needs
and financial situation?
and mortgage professionals understand that details matter. Learn mortgage
jargon and mechanics and you'll catch on more quickly when your mortgage broker
talks specifics about your mortgage fit. Accurately answer financial questions
to enable professionals to zero in on relevant details that gain you the best
decisions are best made with thought to your cash flow, pay days, employment
security, other debt, credit pressures, and long-term financial goals. Check
your credit score and determine how it can be improved to allow you to
successfully launch into home buying and a mortgage loan application. Look
beyond your credit score to clarify exactly how hard or easy it will be to make
the required mortgage payments each month.
Question: What, if anything, will you and your family have to give up to
free-up cash for the mortgage payment each month?
loan involves a legal agreement between a lender and a borrower[—]either a home
buyer or the existing homeowner, depending on whether the property is changing
hands or the existing mortgage is being renewed or replaced. Each mortgage is
specific to the unique owner and property it's created for.
always spoken of in generalities until the specific financial situation of the
borrower is blended with the lender's security requirements regarding the
specific property involved. Keep this in mind when you read mortgage blogs or
articles and listen to podcasts. You're looking for facts or features to apply
to your needs, but you'll rarely read about situations that exactly mirror
Question: Who will help you understand the complexities and
opportunities that could appear while arranging your mortgage loan?
Mortgage Decisions Lie Ahead
Here are two
of the key decisions borrowers face:
#1. Interest Rate Reflected in
interest rate stays the same during the mortgage, even if it runs for 30 years,
that's a fixed-rate mortgage. Since
the mortgage interest rate is fixed, even when the market interest rate is
rising, monthly payments stay the same.
interest rate charged varies during the loan, the mortgage is known as an adjustable-rate mortgage. The benefit here
is that, when the market interest rate declines, the mortgage interest
rate decreases in accordance with mortgage terms, and, therefore, monthly payments
decline. When interest rates are on the rise, holders of these mortgages face
increasing monthly payments. A mortgage can combine both a fixed and an
adjustable period in a variety of combinations.
Question: What do you think interest rates are going to do over the next
#2. Amount of Down Payment Plus
the down payment, the smaller the mortgage loan. Government-insured home loan
programs reduce down-payment requirements, but costs may increase monthly
payments. These programs offer lenders government guarantees against loss
should borrowers default, for instance, for non-payment. The Federal Housing Administration (FHA)
mortgage insurance program allows borrowers to make down
low as 3.5%. The cost of mortgage insurance may increase monthly payments, so
weigh your options carefully. The US Department of Veterans Affairs (VA)
program enables eligible service members, veterans, and certain surviving
spouses to buy without a down payment.
In 2018, more
than three thousand counties will see FHA loan-limits increase.
The FHA is not a government department, but a private agency that provides ortgage
FHA-approved lenders and education for consumers. For instance, FHA researchers
compiled a state-based list of many of the Down Payment Assistance Programs for
Homebuyers. The wide range of FHA content on topics relevant to
property owners, buyers, and borrowers includes:
How can I
improve my credit rating?
How do I
pre-qualify for an FHA loan?
How Much Can I Afford? FHA Mortgage
Question: Where do your greatest real estate and mortgage advantages lie
considering the down payment you have in hand and the programs you qualify for?
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