What You Should Know About Home Mortgages-acbel

23 Jul

UnCategorized There are many mortgage products available for San Fernando Valley home buyers. If you are a first time home buyer, the various types of loans may be confusing to you. You should try and educate yourself first by comparing different loans and interest rates. Much of the information can be obtained on the Internet. It is important to work with a mortgage broker or lender that you trust. Your San Fernando Valley Realtor can recommend a good mortgage broker to help you with your financing needs. To get started, here are some crucial things you should know about home mortgages: Conventional Loans (conforming or non-conforming/jumbo loans) Conventional loans are made by banks and traditional lending institutions. Guidelines for conventional loans are based upon Fannie Mae and Freddie Mac guidelines. Fannie and Freddie only insure loans; they do not make them. Government Loans Government programs include FHA and VA loans. Each loan program is governed by their own requirements and guidelines. FHA has a low minimum down payment of 3.5%. Borrowers must use the property as their primary residence and can only purchase 1-4 units including a single family home, condo or townhome. Home improvement loans are also available through FHA. FHA insures loans made by FHA approved lenders. FHA loan limits vary by the specific county where the property you are purchasing is located. VA loans are made by lending institutions and are guaranteed by the U.S. Dept of Veterans Affairs. This program is for veterans and service personnel so that they can afford to purchase a home. There is no down payment required. VA loan limit amounts also depend upon the specific county where the property you are purchasing is located. The general loan limit is $417,000. The VA determines the borrower’s eligibility, and then issues a certificate of eligibility for the borrower to use to apply for their VA loan. Interest Rates Interest rates are either fixed or variable. Fixed rates are the preferred type of loan. The term is fixed for a period of 40, 30 or 15 years. 30 years is the most popular fixed rate loan. A variable loan rate changes depending upon the base interest rate. If rates go up, your monthly payment goes up. If the rates go down, then your monthly payment goes down. Variable rates are for 5/1 ARM and 5/1 jumbo ARMs or combinations. Mortgage Broker or Lender? Mortgage brokers do not loan money. They assist borrowers to find the best loan products. Typically, mortgage brokers work with many different lenders to match the borrower’s needs and financial situation. A mortgage broker will take your loan application, lock in your rate with a lender and gather all the required information that is necessary to process your loan. The mortgage broker will disclose federal and state disclosure laws to you. Mortgage brokers are paid a commission for putting you and the lender together. The borrower generally pays the mortgage broker’s commission in the form of closing costs or what is typically referred to as points. Some borrower’s prefer to work with mortgage brokers because they have access to more loan products. If you have credit problems, you probably will have better luck finding a loan by working with a mortgage broker. Other borrowers like to work with their local bank. It is a personal decision. When choosing a mortgage product, look for the best terms and rates and avoid things like pre-payment penalties and junk fees. Stay within your budget. A good conservative rule of thumb is to keep your mortgage payment to 25% of your gross income. This way you won’t feel stressed that you are living beyond your means. Take your time shopping around until you are satisfied with the product you have chosen. Have the lender or mortgage broker give you a pre-qualified letter at the time you are making your offer. Better yet if you have already gone through the loan approval process, and can give the seller a pre-approval letter. This has much more weight because it signifies that you already have your loan lined up. About the Author: 相关的主题文章: