Hybrid adjustable rate mortgages (ARM) generally have a fixed term / variable term such as 5/1 ARM. 5 would be 5 years at the fixed teaser rate. 1 would mean it adjusts ever 1 year after the initial 5 years is over. Once the adjustment period starts, the new rate Read more…
The debt-to-income ratio helps determine the maximum amount that lenders are willing to lend to you. Debt is everything that you currently owe including credit cards (food, entertainment, transportation, health care), car payments, and student loans. Income is the gross income amount before taxes including salary, investment income, and royalties. Read more…
Now that you have selected a home within your purchase price, hopefully you have done some homework on the additional out of pocket expenses that you have to come up with besides securing a mortgage loan. 10% to 20% for down payment. It is generally the preferred range for a Read more…
A good mortgage broker helps to make the closing of a mortgage loan as seamless as possible. Friends, who are homeowners, and your buyer rebate agent will be able to recommend mortgage brokers who they have worked with locally. Interview a few mortgage brokers before choosing to work with one Read more…
Upon 3 days of receiving your loan application, the lender will issue a loan estimate letter to you. It will include every feature of the loan to help you understand the scheduled repayment amounts that you are responsible for. The 3 page form is standardized by the federal government. Take Read more…
Adjustable rate mortgages (ARM) often come with low initial interest rates, then the rate increases to a higher market rate set against some type of Fed index after the initial teaser period expires. An ARM may be right for you if you plan on paying off the full loan in Read more…
Your mortgage application requires an appraisal from an independent third party. The lender only wants to be in a position to be able to recover the amount of money loaned to you if they are forced to sell the home as collateral when the loan is in default. The appraisal Read more…
The borrower can save thousands of dollars by eliminating the loan application fees and bank processing fees. Working directly with friends and family, the buyer no longer pays for the professional services that lenders employ throughout the lending process. No private mortgage insurance (PMI) required. Even if you borrow 100% Read more…
Escrow accounts are set up for home owners to manage their budgets because large property tax bills are due infrequently. The escrow accounts builds a reserve to pay these bills by collecting from the homeowner on a monthly basis. These escrow accounts are managed by lenders. Mortgage lenders will sometimes Read more…
Home buyers often get financial help from family and relatives in the form of gift money. The gift amount without being taxed is $15,000 for 2018. Gift money are not loans, and the receiver does not have to pay it back. Banks and mortgage lenders want to make sure all Read more…