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A commission-based mortgage lender will primarily be motivated by closing your mortgage, whether or not the terms of the mortgage are in your best interest. With salary-based mortgage consultants, you won’t have to worry that your mortgage lender is locking you into a huge financial commitment in order to make their own mortgage payment for the month. Interest rates change daily and vary based on your financial situation. So, you want to be sure your loan officer or consultant takes the time to get you to know your current finances, as well as your outlook and goals.
If you have a credit card with a $20,000 limit, that doesn't necessarily mean that you should spend $20,000 on purchases with the card. The same logic is true when it comes to mortgages -- just because you can qualify for a certain mortgage amount doesn't mean that you have to max out your budget. Be sure that your new mortgage payment not only fits your bank's standards but your budget as well.
Insurance: This will be paid to a homeowner’s insurance company of your choice; this is required when you have a mortgage. Lenders require that your insurance cover the cost of rebuilding the home if it is ruined by fire or other disaster. This “replacement cost” is determined by your insurer, and must be agreed to by your lender. Insurance will typically cost $700 to $1,200 per year for a single family home.
Coming up with a down payment can be the one of the biggest obstacle when buying a home, especially for first-time home buyers. No matter what type of loan you choose, you will likely have to put some amount of money down. Saving up for a down payment can seem like a daunting task, but with the right planning and budgeting you can reach your savings goals faster than you think. Click here for strategies that can help you save for a down payment.
On the whole, the lowest interest rates are available to borrowers who have large deposits, or in the case of those remortgaging, significant equity in their property. Typically, you’ll need at a deposit of at least 40% to be eligible for one of the best rates. If you have only 10%, there are mortgages available but you’ll probably pay a higher rate.
A mortgage loan is a long-term loan obtained from a bank, financial institution, or other lending organization, often used to purchase, construct, or improve a home or piece of property. Mortgage loans are usually paid off over 15 to 30 years, with low-interest rates compared to other large loans. A mortgage loan works to provide low-interest rates for long-term repayment, because the lender's risk is insured by a security interest in your real property.
Looking back at the flood of foreclosures since the housing crash, it’s clear that many borrowers didn't fully understand the terms of the mortgages they signed. According to one study, 35 percent of ARM borrowers did not know if there was a cap on how much their interest rate could rise [source: Pence]. This is why it’s essential to understand the terms of your mortgage, particularly the pitfalls of “nontraditional” loans.
It’s equally important to find a lender who has access to — and knowledge in — down payment assistance programs. There are many options available to first-time home buyers and seasoned buyers. Options vary by county and state, but the right lender is going to know exactly what’s available to you. This is a great way to save even more money each month.

The mortgage industry works a little differently in the US than it does in many other parts of the world. Mortgage loans are treated as commercial paper, which means that lenders can convey and assign them freely. That results in a situation where financial institutions bundle mortgage loans into securities that people can invest in. The purpose of this system is to quickly free up money for the financial institutions to lend out in the form of new mortgages. The US also has a number of government-sponsored enterprises, such as Freddie Mac and Fannie Mae, that exist to facilitate this system. Most mortgages have fixed rates, which is also a departure from the variable rates that are commonly found in Europe and elsewhere.
If you have a hybrid ARM or an ARM and the payments will increase – and you have trouble making the increased payments – find out if you can refinance to a fixed-rate loan. Review your contract first, checking for prepayment penalties. Many ARMs carry prepayment penalties that force borrowers to come up with thousands of dollars if they decide to refinance within the first few years of the loan. If you’re planning to sell soon after your adjustment, refinancing may not be worth the cost. But if you’re planning to stay in your home for a while, a fixed-rate mortgage might be the way to go. Online calculators can help you determine your costs and payments.
The next step is to thoroughly research these grants to ensure that you satisfy the eligibility criteria and complete their applications. The complexity of grant applications makes it worthless to apply for grants for which you are ineligible. Save your time by only completing applications for those grants that you feel you have a chance of receiving. Non-profit housing organizations and your city's housing authority may be able to assist you with your application.
Maybe your parents had a 30-year fixed-rate loan. Maybe your best friend has an adjustable-rate loan. That doesn’t mean that either of those loans are the right loan for you. Some people might like the predictability of a fixed-rate loan, while others might prefer the lower initial payments of an adjustable-rate loan. Every home buyer has their own unique financial situation and it’s important to understand which type of loan best suits your needs.
Looking back at the flood of foreclosures since the housing crash, it’s clear that many borrowers didn't fully understand the terms of the mortgages they signed. According to one study, 35 percent of ARM borrowers did not know if there was a cap on how much their interest rate could rise [source: Pence]. This is why it’s essential to understand the terms of your mortgage, particularly the pitfalls of “nontraditional” loans.
This is the number of years during which you will be making payments on your mortgage. The most popular mortgage is a 30-year fixed, with 15-year fixed coming next. Common terms for fixed mortgages are 15 and 30 years, but some banks offer mortgages in other five-year increments from 10 to 40 years. Stretching out payments over 30 years or more will mean that your monthly outlay will be lower, but the overall cost of your home will be more because you’ll be paying interest for more years. To make your home cost less, choose a shorter term, such as 15 years.
The last thing any homeowner wants is to face the stress of being behind on their mortgage payment, or worse yet, to think about, and possibly lose the family home to foreclosure or unpaid property taxes. No one ever plans to or expects to lose their home to foreclosure. But by understanding how you can obtain assistance with making your mortgage payments, who and how to ask for help, and what to do, you can reduce your chances of this occurring. Communication and being pro-active is one of they keys. You should also know the foreclosure process inside and out, and understand what may lead up to it. That will place you in a better position to address and also recognize any potential problems that may impact your ability to pay every bill and make every mortgage payment on time.

Learn about a federal government program, Hope for Homeowners, that is offered through the Federal Housing Authority (FHA). It will help hundreds of thousands of lower income homeowners pay or refinance their mortgages (including subprime). Some forms of help may even be available if the value of your home has significantly declined and if your loan is “underwater”. Continue with Hope for Homeowners.
If you can afford the higher payments, or are willing to buy a less expensive home, a 15-year mortgage can save you thousands of dollars in interest and can allow you to own your home free and clear in half the time. Fifteen-year interest rates are about one percentage point lower than 30-year rates, and you might be surprised how much the combination of a lower rate and shorter amortization period can save you.

Example – A $200,000 fixed-rate mortgage for 30 years (360 monthly payments) at an annual interest rate of 4.5% will have a monthly payment of approximately $1,013. (Taxes, insurance and escrow are additional and not included in this figure.) The annual interest rate is broken down into a monthly rate as follows: An annual rate of, say, 4.5% divided by 12 equals a monthly interest rate of 0.375%. Every month you’ll pay 0.375% interest on the amount you actually owe on the house.
If you do not shop multiple lenders, you’re doing yourself a disservice. Even if you are sure this is the lender you want to use, getting quotes from other lenders can help you negotiate a better deal. Not every lender will give you the same mortgage rate, or closing costs. This is why shopping multiple lenders is very important. Getting at least 3 or 4 loan offers is recommended.
Note that the Hope for Homeowners program indicated above has been expanded. Families can now receive aid on a second mortgage, and more lenders are participating and cooperating with the FHA. Banks and lenders have been provided further incentive to participate in the program. Find how the FHA Expanded Hope for Homeowners to assist more borrowers.
The possibility of losing your home because you can’t make the mortgage payments can be terrifying. Perhaps you’re having trouble making ends meet because you or a family member lost a job, or you’re having other financial problems. Or maybe you’re one of the many consumers who took out a mortgage that had a fixed rate for the first two or three years and then had an adjustable rate – and you want to know what your payments will be and whether you’ll be able to make them.
Start by requesting the free annual credit report you’re entitled to at AnnualCreditReport.com. “For each credit account you have, the report shows creditors’ names, the amount owed, the highest balance owed, available credit, whether the account is open or closed (and who closed it), the number of times a payment was past due, and whether the account is in default,” Freddie Huynh, a lead data scientist at FICO (Fair Isaac) for 18 years who is now Vice President of Credit Risk Analytics at Freedom Financial Network, explains.

Example – A $200,000 fixed-rate mortgage for 30 years (360 monthly payments) at an annual interest rate of 4.5% will have a monthly payment of approximately $1,013. (Taxes, insurance and escrow are additional and not included in this figure.) The annual interest rate is broken down into a monthly rate as follows: An annual rate of, say, 4.5% divided by 12 equals a monthly interest rate of 0.375%. Every month you’ll pay 0.375% interest on the amount you actually owe on the house.
There are a number of programs to assist homeowners who are at risk of foreclosure and otherwise struggling with their monthly mortgage payments. The majority of these programs are administered through the U.S. Treasury Department and HUD. This page provides a summary of these various programs. Please continue reading in order to determine which program can best assist you.
A commission-based mortgage lender will primarily be motivated by closing your mortgage, whether or not the terms of the mortgage are in your best interest. With salary-based mortgage consultants, you won’t have to worry that your mortgage lender is locking you into a huge financial commitment in order to make their own mortgage payment for the month. Interest rates change daily and vary based on your financial situation. So, you want to be sure your loan officer or consultant takes the time to get you to know your current finances, as well as your outlook and goals.
“Get pre-approved early, and know your numbers. Make sure you understand the monthly payment that goes along with your price point. Your expectations and your reality need to sync up. Also, rely on your professionals like loan officers and real estate agents. Never feel like you’re bugging them with questions, they should want you to bug them with questions. They’d certainly rather you get the correct info from them than the incorrect info from Google. Also, I think it’s ok to overpay a little for a house you love. If the market isn’t giving you many options to buy and you find a house you love, don’t get hung up on a couple thousand bucks, especially if you’re going to stay in the house long-term. If you can afford it, make it happen.”–Tyler Baker, Branch Manager, Olathe, KS
Look at properties that cost less than the amount you were approved for. Although you can technically afford your preapproval amount, it’s the ceiling — and it doesn’t account for other monthly expenses or problems like a broken dishwasher that arise during homeownership, especially right after you buy. Shopping with a firm budget in mind will also help when it comes time to make an offer.

Maybe your parents had a 30-year fixed-rate loan. Maybe your best friend has an adjustable-rate loan. That doesn’t mean that either of those loans are the right loan for you. Some people might like the predictability of a fixed-rate loan, while others might prefer the lower initial payments of an adjustable-rate loan. Every home buyer has their own unique financial situation and it’s important to understand which type of loan best suits your needs.
Fannie Mae and Freddie Mac, which are now owned by the federal government, are providing mortgage help to hundreds of thousands of homeowners from a few different programs. Since they are responsible for and service the vast majority of mortgages that are issued by hundreds of banks, many people will qualify for help from them and may not even realize it. Find the various Fannie and Freddie Mac mortgage programs.
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