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Mortgage Information - Refinancing? Second Mortgage? Home Equity Loan? Understand The Basics
from: Carrie ReederA mortgage is usually the biggest purchase that an individual makes, and because of that, many people tend to get nervous during the process. But wouldn’t it make things easier if you felt that you had a “handle” on the process—or at least the terminology? After all, in order to get the best deal on your mortgage loan, you will need to understand certain things such as points, interest rates and closing costs.
If you feel like you could stand to brush up on your mortgage loan terminology, why not read the following common terms and their definitions?
Points
A point is amount that a borrower will pay in order to reduce the interest rate on their mortgage. One point is generally equal to 1% of the loan amount. For example, if you were taking out a 100,000 mortgage, and wanted lower interest rates, you might have to pay anywhere from 1-3 points (or $1,000-3,000 dollars) to get that rate. It’s important to note that some lenders will advertise very low interest rates, and only when you read the fine print will you learn that you will have to pay points in order to get them.
Interest Rates
When a lender makes a loan, they make money by charging interest on that loan. With a mortgage loan, all of that interest is front-loaded, which means that for the first few years, every payment that you will make will go mostly toward the interest.
When applying for a mortgage, you will have the option of “locking-in,” or “floating” your interest rate. If you choose to lock-in your rate, then you will be assured—for about 60 days—that when you close it will be at that rate. However, if it appears that interest rates will go lower, you can choose to float the interest rate, which means that you can watch the rates carefully, and then lock it in whenever it reaches an amount that you are comfortable with.
Closing Costs
When you go to close on your home at the title company, both the buyer and seller will have to pay a pre-determined amount of closing costs. These are determined by the type of loan you get, and the area where you live. Your lender is required by law to inform you of any closing costs beforehand, so be sure to ask for your truth in lending estimate.
As you can see, mortgage terms aren’t that mysterious! Do some research or read some more articles on this site to become familiar with the lending terms that you need to know.
There are also many mortgage companies online that can help you find direct
mortgage lenders and home loan brokers that will best suit your needs.
This is a quick way to find a good mortgage loan and compare rates and offers
from multiple lenders. When lenders compete for your business, it works to
your advantage. To view our list of these recommended online mortgage
companies, visit this page: Recommended Online
Home Mortgage Lenders.
About the Author
Carrie Reeder is the owner of ABC Loan Guide, an informational website with articles and the latest news about various types of loans.
Home Mortgage Refinancing Rate News
Mortgage Bonds Face Eye of Storm as Refinancings Decline: Credit Markets - Bloomberg
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Obama Mortgage Refinancing Plan: A Bailout by Any Other Name - National Legal and Policy Center
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Mortgage rates: How low can they go? - Christian Science Monitor
 Christian Science Monitor | Mortgage rates: How low can they go? Christian Science Monitor the average rate for a 30 year fixed rate mortgage dropped to 3.33 percent since last week, while the purchase application volume increased 0.1 percent and the refinance application jumped 9.4 percent over the same period. Mortgage applications jump as interest rates hit new lows Refinance Rates Hit New Lows and Applications Soar Mortgage applications jump on refi demand: MBA |
BofA Stalls Refinance Work as Wells Is 'Open for Business' - BusinessWeek
 Bloomberg | BofA Stalls Refinance Work as Wells Is 'Open for Business' BusinessWeek The government's Home Affordable Refinance Program, which helps homeowners lower payments, has increased refinance applications and strained capacity at Bank of America, which exited some mortgage lines last year. The US program, now dubbed HARP 2, ... New HARP Could Help Up to 6.7 Million BofA Said to Put Off Refinancing Clients as U.S. Spurs Demand MBS Prepayments Suggest Slow Uptake On Government's HARP |
Rural Nevada Homeowners Can Lower Mortgage Rates - KTVN
Rural Nevada Homeowners Can Lower Mortgage Rates KTVN The US Department of Agriculture's Rural Development Office is letting some rural Nevadans refinance to lower their mortgage rates. The Single Family Housing Guaranteed Rural Refinance Pilot Program will operate in 19 states (including Nevada) for ... Rural Nevada homeowners might be able to refinance your loans USDA in Nevada announces rural refinancing program for homeowners | The Republic |
Obama unveils mortgage refinancing plan - CBS News
 Politico | Obama unveils mortgage refinancing plan CBS News You'll be able to refinance at a lower rate, you'll be able to save hundreds of dollars a month you can put back in your pocket. Or you can choose those savings to rebuild equity in your homes - which will help most underwater homeowners come back up ... Obama Said to Plan Assistance for Home Mortgage Refinancing Obama to detail broader housing refinance plan Mortgage Relief Plan Aims at Refinancing |