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"What Is A Mortgage? "

A mortgage represents a loan or lien on a property/house that has to be paid over a specified period of time. Think of it as your personal guarantee that you'll repay the money you've borrowed to buy your home. Mortgages come in many different shapes and sizes, each with its own advantages and disadvantages. Make sure you select the mortgage that is right for you, your future plans, and your financial picture.

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"What Is An Ammortization Schedule?"

The month-by-month allocation of your monthly payment to the loan's interest and principal is called an amortization schedule. With most loans you pay off the interest on the loan before you pay off the principal (or the actual amount you borrowed). Your lender will provide an amortization schedule to show you how the percentage of your principal paid off increases with every payment, while the percentage of interest decreases.

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"Types Of Mortgages "

There are a variety of mortgage options for you to choose from when selecting a mortgage. Choices range not only from fixed rate to variable rate mortgages, but also from the funding source of the mortgages as well. Here is a breakdown of some of the funding sources and what they are:

  • Conventional Mortgage - A mortgage product offered by most lenders that enable the borrower to get a very favorable rate, but usually requires the borrower to put at least 5% down for the down payment. Also better rates are available with better credit scores.
  • FHA - These loans are insured by the Federal Housing Administration. These products have more flexibilty with down payments, down payment money sources, and credit scores as well. The rates are still favorable, but are usually not as good as Conventional Mortgages.
  • VA - These are loans offered for Veterans and like FHA loans have flexible criteria to help Vets to purchase homes.

In addition to the basic funding sources for loans, there are many types of loans in terms of their ammortizaion schedule, interest amounts, etc. Here is a breakdown of some of the more popular choices:

  • 30 Year Fixed - Probably the most well known mortgage product - the 30 year fixed mortgage has a set interest amount that will not fluctuate as you make your payments over the life of the loan. The only fluctuaion in your payment may arise from increases in your homeowner's insurance or taxes & these increases would only exist if your lender pays those bills for you via an escrow account you would have with them.
  • 15 Year Fixed - Like the 30 year, the interest rate does not change, but the loan is ammortized over a 15 year period instead of a 30 year period - so the payment is slightly higher.
  • ARMs - 'Adjustable Rate Mortgages' are very popular because they allow borrowers to buy more house than they may have been able to with a fixed rate mortgages. Typically, these loans have better interest rates at first, but after a determined amount of time - the interest rate can adjust - sometimes making the rate higher than a fixed rate was at the time the mortgage was executed. An example would be a 3 year ARM - where the rate is fixed for three years, but can then adjust after the three years, and often times keep adjusting at set intervals.

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"Do Your Homework"

One of the most important things you can do when looking to purchase a new home (or refinance your current mortgage) is to do your homework and make sure you're getting the best deal. Afterall, this is your money we're talking about, and even a fraction of a percent can mean thousands of dollars over time.

Above you'll see a list of current rates based on national averages. In fact, if you were to call three different lenders - don't be surprised if you get three different rates. Keep in mind, that there is much more to a mortgage than the rate that you are quoted over the phone. Here are just a few things that may also factor into any rate you are quoted:

  1. Does the rate include any points?
  2. What are all of the closing costs?
  3. Is the rate variable or fixed?
  4. How much money will you have to put down to get the rate?
  5. How long is the rate good for?

As you can see - there are quite a few factors that can go into a rate that you are simply 'quoted' over the phone. It helps to speak with several lending institutions to get all of these answers and more before making any decisions whatsoever. Finding a mortgage company you can trust is very important

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"Mortgage Calculators "

Click Here to use our free calculators. These are meant to help give you a better understanding of what your payments will be as well as several other options.

The following Calculators are available to you:

  1. Calculate Your Payment
  2. Extra Payments (shows how much money you can save)
  3. Renting vs Buying
  4. Should I Refinance?
  5. Points vs No Points

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"The Good Faith Estimate "

When comparing the services of multiple lenders - the best tool to do so would be the "Good Faith Estimate" (GFE). This document is a relatively standardized form that is meant to include all of the information that a specific lender is offering you from closing costs to the rate you have been quoted. It is important to compare all of the information to ensure you are getting the best product possible.

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"Credit Scores "

When applying for financing - most lenders use your credit score as a qualifying tool to help determine not only how much money a borrower can finance, but at what interest rate. It's crucial for consumers to stay on top of their credit scores - especially as the incidence of 'identity theft' continues to grow. For a free copy of your 'Credit Report' and consultation on what these numbers mean - CLICK HERE.

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"Customer Resources "

The following are free resources regarding the mortgage process, mortgage products, and mortgage basics that can help:

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"Still Have Questions "

The mortgage process can be quite overwhelming with the number of lenders, products, and the amount of money that is involved. If you would prefer to speak with someone directly about your mortgage questions without any pressure - don't hesitate to contact us via email or our Toll Free Number. Also, you can CLICK HERE with any specific questions and we will be happy to get you answers as soon as possible.

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