Mortgage 101

 
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March 31, 2016

Mortgage 101: Locking In Your Rate

Mortgage Rate Locks: The Key to Savings

 

Mortgage interest rates are tied to the Federal Funds Rate, which is the interest rate that banks charge each other to borrow money. In turn, the FFR is directly influenced by the Federal Reserve.

What’s a Rate Lock?

Simply put, a mortgage rate lock is a legal agreement in which a lender promises to reserve a fixed interest rate at a fixed number of points for a specified time period. If you don’t lock in your rate soon after your offer is accepted then you’ll be subject to whatever fluctuations influence mortgage interest rates until the day you actually close, and those fluctuations can be costly.

When to Lock [...]
 
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March 31, 2016

Mortgage 101: Everything You Need To Know About Mortgage Insurance

I Need Mortgage Insurance, Too?

If you’ve spent any time researching the costs associated with homeownership, then you’re probably already familiar with private mortgage insurance, also known as PMI. Still, it’s a good idea to know exactly what you’re getting yourself into. With that in mind, we’ll discuss the finer points of the mortgage insurance concept.

Mortgage Insurance Protects the Lender

Normally, when you purchase an insurance policy, it’s designed to protect you. But that’s not how mortgage insurance works; its purpose is to protect your lender. When a bank or other lender grants a mortgage, that entity is taking a risk. After all, there’s always a chance [...]

 
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March 29, 2016

Mortgage 101: Don’t Make These 6 Mistakes On Your Mortgage Application

Making Sure That You Get the Mortgage You’re After

Although the process might seem daunting to many first-time homebuyers, the information in this article should go a long way towards making the mortgage application process smooth sailing for anyone. Applying for a mortgage is actually a lot like applying for college: make just a few key mistakes, and you could be “out of the game.” Here are six of the most common pitfalls that people make when applying for a mortgage – and how to avoid them!

1. Bad Credit

 

It simply cannot be understated: the health of your credit score is extremely important and greatly affects your mortgage application chances. [...]

 
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March 29, 2016

Mortgage 101: The Financial Benefits Of A Mortgage

Mortgage Payments Aren’t as Bad as They May Seem

 

When it comes to paying off mortgages, conventional wisdom holds that you should do it as quickly as possible, but conventional wisdom isn’t always correct. In fact, there are specific advantages to carrying a mortgage on your home for as long as possible. In this article, we’ll examine the many benefits of having a mortgage, and discuss why it doesn’t always make sense to pay off the remaining balance in a hurry.

Mortgage Debt Is Low Interest

A mortgage is one of the most affordable means of borrowing money that you will ever encounter, unless you receive a zero-interest loan from a wealthy uncle. Think [...]

 
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March 29, 2016

Mortgage 101: The Do’s And Don’ts Of Choosing A Cosigner

What You Need to Know Before Selecting a Cosigner for Your Home Loan

Gone are the days when mortgage lenders approved practically every application that rolled across their desks. Ever since the housing bubble burst, getting approved for a mortgage has become increasingly difficult. For a while, even buyers with good credit couldn’t get approved. Thankfully, things are finally starting to loosen up, but it’s still hard for an individual with average credit to get approved for the mortgage they want. For these buyers, a cosigner may be able to help get their loan application approved. But is using a cosigner a good idea? For some, it is; for others, not so much. Here are the [...]

 
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March 29, 2016

Mortgage 101: The Pros and Cons of Zero Down

So You’re Ready to Buy a House… What’s Next?

As you’re probably already aware, you don’t actually need a 20% down payment to qualify for a mortgage. In fact, there are programs that will allow you to buy a home with as little as 3.5% down, and a select few mortgage programs, such as those available from the United States Veterans Administration and the U.S. Department of Agriculture, can even get you into a mortgage with zero down. Even if you don’t qualify for a VA or USDA loan, you may be able to receive help from down payment assistance programs such as Community Seconds, which is a low or no-interest second mortgage initiative designed to make homeownership more [...]

 
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March 29, 2016

Mortgage 101: Working With A Small Down Payment? You’ve Got Options

Ready to Buy a Home But Struggling With the Loan?

Ideally, when you’re set to purchase a home you’ll have a good-sized down payment saved up and ready to go, but for many would-be homeowners stashing away a year’s salary or more simply isn’t possible. Does that mean they can’t afford to purchase a home? Not at all! There are plenty of home loan options that don’t require the traditional 20% down payment to qualify. If you are in a position where homeownership seems out of reach due to down payment considerations, then you owe it to yourself to check out these home loan options that can help you achieve your dream of homeownership with a small down payment.

FHA Loans

The [...]

 
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March 29, 2016

Mortgage 101: All About The Down Payment

Save Your Pennies for a Mortgage Down Payment

Conventional wisdom holds that in order to purchase a home, you’ll need to save up at least 20% of the total purchase price to have enough for an initial down payment. These days, though,  you may be able to get a mortgage with as little as 3% down, or even nothing in some cases. But should you take advantage of those low-down-payment options, or are you better off waiting until you have a sizable sum of money to put down on a home? In this article, we’ll discuss how down payments work as well as tricks you can use to make saving up for your next home purchase easier.

Why 20%?

We’ve already established that 20% used to be [...]

 
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March 29, 2016

Mortgage 101: 5 Sneaky Ways to Save Extra Money For Your Down Payment

Getting on the Road to Homeownership

Homeownership is a big decision, but when you’re ready, you know it. In social conversations, the topic often turns to how much the home down the street just sold for. When you see a “for sale” sign, you often stop to check out the accompanying flyer, and you find yourself disappointed when they’re all gone. Instead of watching silly cat videos, you start checking out real estate websites and playing around with mortgage calculators… There’s no question: you’ve got the bug!

There’s more to purchasing a home than just searching through the local listings though — you’ve got to actually get your financial ducks [...]

 
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March 28, 2016

Mortgage Points: Defined Explained

While you may not have heard of them before, mortgage points could prove to be the difference between you affording the home of your dreams or having to settle for something less attractive. Here, we examine mortgage points in finer detail so you can be as informed as possible when entering negotiations with your mortgage lender.

What Are Mortgage Points?

A mortgage point is a fee that’s paid by the buyer in order to reduce the amount of their monthly mortgage payment through their interest rate. Essentially, paying points up front lowers the interest rate for the duration of the loan. Mortgage points can sometimes be referred to as discount points or interest points, and in [...]