Briefly, here are some things to consider, some things to remember, and some things put into practice. Plan to shop around and contact several mortgage lenders to discuss available products, their rates, closing costs, and other fees. Unfortunately, there is no general rule of thumb that says you will do better with one type of lender than another. What you should care about are costs (rate, points, and fees), and whether you are getting a loan program tailored to your needs and experience. Pay particular attention to whether or not your lender is committed to service and to the process of actually helping you with understanding what is going on each step of the way. Purchasing a home is a very regulations-driven procedure; your lender should be ready and willing to help you understand everything about the process. Create a comparison chart that lists variables as criteria that will help you ask a lender questions about the terms of mortgages they offer. Some of the items to consider as essential are interest rate and points; terms of interest rate lock-ins, minimum down payment required; and closing costs/fees, just to name a few. The idea is to get a comparison started and add to your spreadsheet as you discover other important details to remember. You might also want to add those intangible, yet equally important qualities of "friendliness," "service-oriented," and "responsiveness." Meet with the lender before actual house hunting begins in order to determine in advance what price range you can realistically afford and the mortgage amount for which you can qualify. The pre-qualification process can save a lot of time, trouble, and dashed expectations by making certain you are looking for the property that falls within the correct price range. Be prepared – it will make the origination process much less stressful. At your first meeting with the mortgage lender, you should bring information relating to employment verification, and loan and payment history. You cannot escape the fees, but you can minimize them if you are educated in your research and negotiations. Though lenders and mortgage brokers are required to disclose the APR right alongside the rate and fees in advertisements, there are additional, "other" fees are rarely itemized. Be aware, be astute, and ask questions about these fees! Do not be fooled by lenders quoting below market rates and points. Remember, if it appears to be too good to be true, it just may be not true!

An interest rate is the monthly cost you pay on the unpaid balance of your home loan. An Annual Percentage Rate (APR) includes both your interest rate and any additional cost or prepaid finance charges such as the origination fee, points, the initial private mortgage insurance, underwriting and processing fees. (Your actual fees may not include all of the items above.) The APR is an measurement that will assist you in comparing the cost of

There are many things to consider when buying a home. Since it is likely that the purchase of a home will be the most expensive purchase of your life, you will want to consider several things before you even start to look for a home. If you are currently renting, you need to know about the possible advantages of home ownership, and if they apply to your current situation. Are you financially ready to make such a large investment? How expensive of a home can you afford? Is the current market environment favorable for buying a home? Compare the cost of owning and renting the same home. This is simple enough to do. Just take the monthly mortgage and other housing costs and compare it with the cost of renting that same property. Remember to figure the tax savings by taking the cost of the mortgage payment plus property taxes and multiplying that by your tax rate. This will give you a good idea of your tax savings each month. Subtract those savings from your monthly housing costs if you were buying and compare that with the rental rate. If they are very close in monthly expense, it is usually a good value to buy. This can also be a good way to compare the current housing market. It will tell you if the current housing is a fair value, over priced or under priced. Just remember that in some very desirable areas it will usually cost more to buy then to rent. If the additional expense is more then 20 to 30% you should be cautious. Be particularly cautious if you plan to move again in the next 3 to 5 years. It should cost you less to own a home then to rent. There is a simple calculation that will tell you this: Take your monthly rent multiply by 200 = purchase price of home ($___________rent per month X 200 = $_________________ ) Example: $900 X 200 = $180,000 In this example, the payment on a $180,000 home would be comparable to a $900 monthly rental payment. In addition to the current cost of rent vs. purchase, you must also take into consideration the future cost. As a renter, you are exposed to future rent increases. It is reasonable to expect an annual increase of 4% per year to your rent. There are many additional advantages to home ownership beside the monthly payment aspect. The value of a home usually increases during the years that you are paying your loan down. This increase in equity is building up the wealth you accumulate in your home. Even without this expected increase in value, paying on a mortgage over 30 years can guarantee that you will own your home free and clear when you retire. This reduction in monthly housing expense may be very important as you approach retirement. If you choose to trade down after retirement to a less expensive home, you can use the difference in value to free up a lot of extra income you currently have in your home. The home equity you are building in your home can also be borrowed against at some future time for college expenses, vacations, remodeling the home, for instance. Another benefit to home ownership is that you are not subjected to the intrusion of a landlord. Generally, no one can tell you what you can and can not do with the property. If something is broken, you are not at the whim of someone else as to when, how, or why, it should be fixed. A landlord can decide to sell the property and put you out into the street. As a homeowner, you have the security of knowing that you have a place to live, as long as you continue to meet your mortgage and tax obligations. Generally, it is easier to find a place to rent then it is to find a place to buy. If you are just renting you will more then likely put up with some minor and temporary annoyances. If something gets broken, you do not have to concern yourself with the cost involved to fix it. If the quality of the repair is not to your standard, it does not matter as much if this is not your property. As a renter you do not have your money tied up in a property. This allows you to have more flexibility in deciding where you live and how long you want to stay there. You can keep your excess cash for other things that come up in your life since you do not have to budget for housing repairs and expenses. This allows you to have your money in more areas of investment such as 401K, IRA, stocks, bonds, or a small business. This allows you better diversification of your money. Renting will also be cheaper then buying if you will be moving soon. It costs money to buy and sell a house. There are real estate commissions, title fees, loan fees, reports and inspections. A home must appreciate approximately 15% just to recoup these costs. If you plan to move within a three-year period, it may make financial sense to rent then to own. Finally, do not make the decision based on someone else’s expectations. This is a decision that only you can make, and only after careful consideration.

"Your home is your castle," as the old saying goes. A home is a place you can call your own. Perhaps you are ready to settle down in your community and want the feeling of permanence and involvement that comes with home ownership. Perhaps you need more space in which to raise a family, or, maybe you want more leeway than you have in a rental unit to adapt your living space to suit your individual taste and needs. If you are planning to purchase a home, you probably have good reasons in mind, ranging from the purely personal to the very practical.

Generally speaking, points are fees added on to loans. Lenders often charge their origination fee (what you pay them to start the loan, though not necessarily paid at the start - and never paid up-front with ditech.com) in terms of points. One point is equal to 1% of your loan amount. When you get a loan, you will have the opportunity to "buy down" the interest rate by paying discount points - essentially paying a fee to lower your interest rate. By lowering your interest rate, you will be lowering your monthly payment and the amount of interest you will be paying over the life of the loan. What this comes down to is paying more now and saving later versus paying more in the long run with less out of pocket now. Keep this in mind as you determine whether you should pay points. If you can afford the present expense, it is a good idea to buy down your interest rate; you will be saving money in the end. However, if your expenses are presently tight and you cannot afford the added immediate expenditure, then buying down the rate is not for you. Instead, let the loan do its job: allowing you to borrow the money you need and pay it back as you can.

All mortgages have an Interest Rate, a Term and an APR or Annual Percentage Rate. For example, a mortgage might be defined as a 30-Year Fixed Rate Loan at 7.625%, with an APR of 7.800%. In this case, the mortgage's term is 30 years. That is, you the borrower will pay back the loan in installments over the course of 30 years. The mortgage's interest rate is 8.255%. This means you must pay an interest on the money you've borrowed at a rate of 8.255% per year. In addition to paying back the loan, you will pay your lender an additional 8.255% of whatever amount of the loan you have yet to pay back (the balance) every year. This interest is basically the fee your lender charges you in return for lending you the money. But there's more to it than this... A mortgage's Annual Percentage Rate (APR) is a measure of the cost of credit, expressed as a yearly rate. The determination of the APR takes into account the amount financed (principal loan amount minus certain loan fees and prepaid interest); the finance charge; certain loan fees; and the amounts and timing of the payments. APRs are generally helpful in comparing loans offered by different lenders as they show you what is called the loan's effective interest rate - that is, the interest rate you'll actually end up paying each year. As you repay your loan, Amortization comes into effect. This refers to how your loan balance decreases over time.

A mortgage is a loan you acquire, generally in order to purchase property, but often to get cash for other purposes. In return for the loan, you pledge real property (land, a building) as security in case you fail to live up to your obligation. When you borrow money against property, you commit to two financial documents: · The NOTE is a personal obligation to repay the loan on a timely basis. · The MORTGAGE DEED OF TRUST is the pledge of the property as security. The mortgage deed of trust defines your obligations to your lender, as well as your rights and those of the lender. You are pledged to repay the mortgage loan, along with an additional charge for the lender's service of lending you the money. Lending money is a business, after all -- this charge is how your lender makes a profit. The cost of borrowing the money is the interest rate specified in your note. The amount of time you have to pay back the loan is the note's term.

You repay your loan in monthly installments. If you have a Fixed Mortgage (that is, with an interest rate that remains fixed and unchanging for the entire term of the loan) like the ones available here, your installments are always for the same amount, and with part of the payment going toward the payment of the interest, and part toward the repayment of the money you've borrowed (the principal). The balance of the principal (what you still owe at any given time) is thus reduced slightly with each payment. If with a fixed interest rate, the amount of interest you owe will decrease as your principal balance decreases. As a result, over time, a larger fraction of each monthly payment is applied toward the balance each month. You can create an amortization schedule for fixed loans when they are originated this schedule will show how much of each payment will go towards interest and how much will go towards principal over the life of the loan. As your principal decreases, your equity in the mortgaged property increases. Equity is a very important factor in mortgage financing

You repay your loan in monthly installments. If you have a Fixed Mortgage (that is, with an interest rate that remains fixed and unchanging for the entire term of the loan) like the ones available here, your installments are always for the same amount, and with part of the payment going toward the payment of the interest, and part toward the repayment of the money you've borrowed (the principal). The balance of the principal (what you still owe at any given time) is thus reduced slightly with each payment. If with a fixed interest rate, the amount of interest you owe will decrease as your principal balance decreases. As a result, over time, a larger fraction of each monthly payment is applied toward the balance each month. You can create an amortization schedule for fixed loans when they are originated this schedule will show how much of each payment will go towards interest and how much will go towards principal over the life of the loan. As your principal decreases, your equity in the mortgaged property increases. Equity is a very important factor in mortgage financing

Contact me @ 512-750-3731 and I will walk you through the process.