Home Buyers Resource Center

FOR YOUR INFORMATION...

Conventional
This mortgage is a contract between the lender and the borrower, at the lender’s risk. The borrower’s property is security and it may be insured with a private mortgage insurance company.

Conventional mortgages usually require larger down payments than FHA or VA loans.

FHA (Federal Housing Administration)
The FHA will insure the loan for the lender against loss in case the buyer cannot meet payments. It requires the buyer to carry mortgage insurance through FHA.

VA (Veterans Administration)
If you are a member of the armed forces, active military, a veteran, or a veteran’s widow you may qualify for a VA loan.

ARM (Adjustable Rate Mortgages)
The changes in the interest may vary up or down at fixed intervals, and is tied to a financial index such as one-year Treasury notes. The ARM often offers a low introductory interest rate, much like a credit card company does. Like a credit card, the rate will go up after a certain time.

ARMS are popular to buyers who know their income will rise in the future or who don’t plan to own the home for many years.

Fixed Rate Mortgage
The interest rate on this agreement can never change as long as you hold the mortgage and regardless of changes in the financial market. You will always know exactly how much you will pay in principal and interest on your home each month. Please allow for increases in taxes or insurance during the course of the mortgage.

Closing Costs
Costs, in addition to a down payment that the buyer usually (but not always) has to pay at the time of purchase. Those costs usually include an appraisal, title search, and attorney’s fees. It may also include points… homeowner’s insurance and private mortgage insurance, if required (see below).

Escrow
The holding account to collect amounts for payment of taxes and homeowner's insurance.

Homeowner’s Insurance
Lenders require this and a policy will protect you against fire and in some cases flooding, theft, liability(responsibility) should someone be injured on the property.

Points
A one-time charge by the lender for originating a loan. A point is 1 percent of the amount for the mortgage.

Prepayment
These are extra payments on your mortgage. Prepayments can shorten the life of your loan and subsequently reduce the amount of interest paid over the life of your mortgage.

Private Mortgage Insurance (PMI)
PMI is usually required for all mortgages with less than a 20 percent down payment. This is different from Homeowners Insurance. It’s a policy the buyer carries to guarantee that a lender is paid off if the buyer fails to pay the mortgage.

You are invited to receive automatic emails of properties that you might be interested in when you become part of my Preferred Home Buyers Program. Simply click here and tell me the features you are looking for in your new home, and you will be automatically e-mailed whenever a new property is listed that meets your criteria!

Thank you!

Thank you for visiting my website! I wanted to provide a means of communication that has great content and is fun and valuable to you.

Rob

615-859-6500
ext 230