use a mortgage broker as opposed to a bank or a private lender?
Mortgage brokers have access to a variety of wholesale lending institutions
not available to the general public and they can also peruse every possible
lending program. Banks are limited to only the specific financial
institution's bureaucratic lending programs making it difficult to work
outside the box.
is the difference between fixed and adjustable rate mortgages?
Adjustable rate mortgages (ARMs) offer a lower initial interest rate than
most fixed rates. The interest rate can change periodically (usually in
relation to an index) and your mortgage payment will go up or down
accordingly. With a fixed rate mortgage, your monthly mortgage payments will
stay the same for the life of your loan.
do I know if it's best to lock my rate or let it float?
Mortgage interest rates fluctuate daily so no one can know for certain
whether they'll go up or down. If you have a hunch that rates are on an
upward trend, then you'll want to consider locking in your rate as soon as
you are able. Before you lock make sure that your loan will close within the
lock period. It is always a good idea to discuss rate locks with your loan
officer who is also an excellent resource for rate information.
is a Home Equity Loan?
A Home Equity Loan, also known as a second mortgage, allows you to borrow a
one-time amount of funds, using the equity in your current home or property
as collateral. Your interest rate is fixed and the loan is amortized over a
is a Home Equity Line of Credit?
A Home Equity Line of Credit allows you to periodically access an account of
funds using the equity in your current home or property as collateral. You
are only charged interest on the outstanding balance.
my first mortgage be affected by a home equity loan?
No. Your first mortgage balance is used to determine your borrowing options,
but your loan/line is totally separate and has no effect on your first
is included in closing costs?
Closing costs are expenses over and above the price of the property. Closing
costs included fees, taxes, prepaid insurance, points, title insurance and
survey fees. Closing costs are usually between 2 and 6 percent of your
mortgage. A complete list of your closing costs will be on your HUD 1
Settlement Statement, and your closer will go over your closing cost items in
is Private Mortgage Insurance or PMI?
PMI is a type of insurance provided by a private mortgage insurance company
that protects the lender in the event that you default on the loan. Mortgage
insurance is usually required on a conventional loan when your down payment
is less than 20%
do I pay for mortgage insurance?
Mortgage Insurance premiums can be paid annually from an escrow account, paid
up-front or financed in your loan amount and paid monthly as part of your
can I avoid mortgage insurance?
The easiest way to avoid PMI is to make a down payment of at least 20% of the
purchase price, however, if you do not have the funds
you can consider a second loan called a piggyback loan.
can I cancel my mortgage insurance?
PMI will no longer be required once your loan balance falls below 80% of the
loan amount either by 1) paying off enough of your loan over time to reduce the
balance, 2) your home has increased in value enough that your loan balance is
80% or 3) a combination of the two.