Mortgage Advice & Calculators

Choosing a mortgage: Understand these 7 factors

Fri, 27 Jul 2012 23:46:14 GMT

Shopping for your first mortgage can be confusing. Here's a guide to the most important things you need to know about mortgage loans. Deciding what type of home loan is best for your needs might be the most trying part of the home-buying process. Your decision involves seven components. 1. Loan amount The amount that you qualify t...

FHA may raise 3.5% down payment

Thu, 13 May 2010 13:09:00 GMT

Home buyers might need to put down more than 3.5% to get an FHA-insured mortgage loan. Home buyers who want to qualify for an affordable FHA mortgage loan may have to come up with a slightly larger down payment in 2010. That’s because the Department of Housing and Urban Development (HU...

Home appraisals: What you should know

Thu, 13 May 2010 13:09:00 GMT

An appraisal is an assessment of a home’s value – and an important component of getting final approval for your loan. If you’re shopping for a loan to buy a home or refinance your mortgage, you may already know that a home appraisal is almost always required before a loan can close. But if you’re like many other bor...

5 tips for first-time mortgage borrowers

Thu, 13 May 2010 13:08:47 GMT

First-time home buyers should shop around, educate themselves about mortgage products. Shopping for a mortgage can be intimidating. It’s natural to feel anxious about doing something new for the first time, and getting your first mortgage is no exception. Fortunately, there are a few ...

15-year loan can mean big savings

Thu, 13 May 2010 13:08:40 GMT

Borrowers can cut save on interest expenses with a 15-year refinance loan. If you’ve decided to refinance your mortgage, but don’t want to restart your 30-year payoff clock, a 15-year loan might be just the ticket. Interest rates on 15-year loans have fallen to record lows ...

New tax credit for home buyers

Thu, 15 Apr 2010 12:01:01 GMT

Economic stimulus gives first-time home buyers $8,000 bonus. If you're thinking about buying a home this year, you're in luck. The economic stimulus bill that President Obama signed into law this week contains a big tax break for home buyers who haven't owned ...

Conforming Loans

Fri, 11 Sep 2009 21:18:30 GMT

A conforming loan usually means a lower interest rate and substantial savings. If you're shopping for a mortgage, you may have heard the term "conforming loan" and wondered what it meant or how it might apply to your situation. The bottom line is that borrowers can sa...

Tax credit spurs home buyers

Fri, 11 Sep 2009 20:57:13 GMT

Home buyers who act quickly can get $8,000 tax credit. If you’ve been thinking about buying a home this year, you may want to act soon since the federal First-Time Home Buyer Tax Credit program is set to end Nov. 30. The tax credit is worth 10 percent of...

What you need to know about private mortgage insurance (PMI)

Tue, 21 Jul 2009 20:14:33 GMT

PMI lets you buy a house with less than 20 percent down in exchange for higher mortgage payments. Private mortgage insurance is just what the name implies: insurance that covers the lender in case the home buyer defaults. If you put less than 20 percent down on most mortgages, chances are your le...

PMI may be tax deductible

Tue, 21 Jul 2009 20:14:32 GMT

Federal government allows a tax deduction for private mortgage insurance (PMI). If you obtain a new home loan with private mortgage insurance in 2007, you might be able to deduct the cost of the insurance on your 2007 federal income tax return. The rules are just as complicated ...

How to make yourself desirable to mortgage lenders

Tue, 21 Jul 2009 20:14:32 GMT

Getting ready to apply for a mortgage? These steps can help make sure you get the best loan possible. Whether or not you can buy a home often depends on your ability to get a mortgage, and this can be a challenge if your credit history isn’t perfect. But there are things you can do to make yourself a...

Pre-qualified versus pre-approved

Tue, 21 Jul 2009 20:14:32 GMT

Q: I've read it's a good idea to get pre-qualified or pre-approved for a mortgage before going house hunting. What is the difference between these terms? A: Getting pre-qualified is the first step in the mortgage process. It involves supplying a lender with basic information regarding your debt, income and assets. From this information, lenders can ge...

How much house can you afford

Tue, 21 Jul 2009 20:14:30 GMT

Q: How do I know if I can afford a house? A: Through a little bit of research, you can easily figure out if you can afford a house. 1. Add up your monthly expenses. Although spending a couple of hundred thousand on a new home can seem overw...

Can you afford to buy a home?

Tue, 21 Jul 2009 20:14:24 GMT

You're ready for homeownership, but are your finances? Find out if your financial situation is stable enough to purchase a home. Only fools rush in, and that’s certainly true when it comes to buying your first home. Take this quiz to help determine whether you’re in good enough financial shape to take on a mortgage. After each...

How an FHA loan works

Tue, 21 Jul 2009 20:14:21 GMT

An FHA loan is a great way for a first-time home buyer to finance a home. Since 1934, FHA loans have been helping people achieve the American dream of home-ownership. This type of loan offers better deals for people who may otherwise have trouble getting a desirable mortga...

Why close at the end of the month?

Wed, 01 Jul 2009 21:23:32 GMT

The later in the month you close on a home, the lower your up-front mortgage costs may be. When you close on a home, you’re required to prepay any interest that will accrue on your mortgage from the date of the transaction until the end of the month. So the closer your closing is to the en...

What you need to keep your home loan on track

Wed, 01 Jul 2009 21:23:32 GMT

There is a lot involved in getting a mortgage approved. Discover what you need to consider to keep your home loan on-target. You’ve found the perfect house, shopped for a mortgage and chosen a lender. The rest is easy, right? Not always. Before your home loan closes, you will need to make sure all of the paperwork and lega...

What is title insurance?

Wed, 01 Jul 2009 21:23:32 GMT

Title insurance policies protect against fraud or other 'defects' in property ownership. Title insurance is one of the most esoteric aspects of buying and owning a home. But that doesn’t mean the subject isn’t important or worth the effort to understand. Customarily, title insurance come...

Title insurance basics

Wed, 01 Jul 2009 21:23:31 GMT

Lenders require you to take out title insurance to protect themselves when they grant you a mortgage. Title insurance is a form of insurance that is designed to protect lenders and property owners from any potential hidden claims against a property. If, for example, you purchase a home and later some...

The HUD-1 Settlement Statement

Wed, 01 Jul 2009 21:23:31 GMT

When you buy a home, the HUD-1 form is the final statement of all the charges involved in the deal. Shortly before closing on a new home, you will be given a Department of Housing and Urban Development Settlement Statement, also called the HUD-1. This is your final account of all of the costs and f...

The home closing process

Wed, 01 Jul 2009 21:23:31 GMT

Q: What’s involved in closing on a home? A: Closing consists of all the necessary final steps involved in sealing the deal on a home purchase. It includes: The offer to purchase There’s no foolproof way to make an offer that’s guaranteed t...

The final walk-through

Wed, 01 Jul 2009 21:23:31 GMT

The final walk-through is your opportunity to make sure nothing is missing or damaged before the deal closes. Shortly before the closing on your home, you will typically make one last inspection called a final walk-through. Your agent should help you examine the house. Verify that all items you have contract...

Settlement statement: Understanding the terms

Wed, 01 Jul 2009 21:23:31 GMT

The settlement statement you receive when you close on a home can be confusing. Understanding the following terms can help. Upon closing on a house, you will receive a settlement statement. This document itemizes all of the monetary transactions that are involved. However, it’s not always easy to understand. Here are defi...

Mortgage closing terms

Wed, 01 Jul 2009 21:23:31 GMT

Understanding some key mortgage terms can help you when you're closing on a home. In order to make your closing go more smoothly, you should be as knowledgeable as possible. Knowing the meaning of the following mortgage terms can help. • Appraisal: A written analysis of the estim...

Making a down payment

Wed, 01 Jul 2009 21:23:31 GMT

You will need a cashier's check from an acceptable source at closing. It is time for closing on your new home. You are supposed to show up with the down payment. Should you just bring your checkbook? How do you actually make a down payment? Most lenders expect you to ...

How to keep your loan from being derailed

Wed, 01 Jul 2009 21:23:31 GMT

Problems that can cause delays need not derail the entire loan process. A mortgage prequalification letter is a great tool for anyone who wants to borrow money to buy a home. But a prequalification letter is just the start of the home-loan process; most borrowers also fa...

How to buy title insurance

Wed, 01 Jul 2009 21:23:31 GMT

What buyers and borrowers need to know about ownership protection. Not surprisingly, home buyers are often unfamiliar with title insurance, which protects lenders and owners from claims against the "title" or ownership of real property. Some of that unfami...

Home inspections and certifications

Wed, 01 Jul 2009 21:23:31 GMT

Before contracting to buy a home, you should hire qualified third parties to inspect your home. Whole-house inspections Inspections are designed to disclose defects in the property that could materially affect its safety, livability or resale value. They won’t disclose cosmetic problems, so you...

Home appraisals

Wed, 01 Jul 2009 21:23:31 GMT

Lenders use home appraisers to determine the value of the home you plan to buy. An appraisal is a written estimate of a property’s market value completed by an appraiser shortly after you request your mortgage. Lenders use your appraisal to determine your loan amount. The market...

Closing-day nightmares: Don't let them happen to you

Wed, 01 Jul 2009 21:23:31 GMT

Surprises can be fun, but not when they pop up on the day your home is set to close. Find out how you can avoid closing-day fiascos. Moving into a new home is exciting. The closing process, however, can be intimidating, especially for first-time buyers. If you’re unprepared, your closing may get delayed or, in the worst-case scena...

Checklist: Steps to a smooth closing

Wed, 01 Jul 2009 21:23:30 GMT

This checklist can help you close on your home loan. As a first-time home buyer, you’re probably about to make the biggest purchase of your life to date. But how can you avoid unexpected complications between the time you find the home of your dreams a...

Why your mortgage lender matters

Wed, 01 Jul 2009 21:23:10 GMT

Monthly payments are important, but products, performance and prices should count too. Home loan borrowers understandably place a lot of emphasis on monthly mortgage payments. Questions like: “How much will we have to pay? And could the payments increase?” typically merit more attentio...

What you need to know when it comes to a home mortgage

Wed, 01 Jul 2009 21:23:10 GMT

Ask your lender the following questions so you can find out if a particular loan product is right for you. A home mortgage is serious financial business. The financial information surrounding this loan -- how much you borrowed and how well you’ve paid -- will go on your credit history and it can seriously...

Interest rate vs. APR - What you don’t know can hurt you!

Wed, 01 Jul 2009 21:23:10 GMT

Don't compare mortgage offers based on interest rate alone. Consider their annual percentage rate (APR). APR versus interest rate When lenders advertise mortgage rates, they are required to display an additional number called the annual percentage rate, or APR. The advertised rate is the one used to ca...

How to compare mortgage loans

Wed, 01 Jul 2009 21:23:10 GMT

Asking these questions when comparing home loans can help you save money and find the mortgage that best suits your needs. Comparing mortgage loans is one of the most important things you can do when you’re buying a home. The decisions you make will determine the size of your monthly payments, how much you pay upfront, a...

How to choose the right mortgage loan

Wed, 01 Jul 2009 21:23:10 GMT

Purchasing a home is the single largest expenditure you will make, so manage the financing with great care. There are many different loan products available today and it is often difficult to pick the one best suited to your financial goals. By answering the following questions, you’ll get a feel for what’...

Choosing the best lender for your needs

Wed, 01 Jul 2009 21:23:10 GMT

When shopping for a home loan, it's important to compare lenders as well as loan offers. Here's how to go about it. You’re shopping for a mortgage and you’ve received four offers from four lenders. How do you choose? The first factor most people consider is the interest rate and other costs, but that’s only the be...

20 questions to ask before you pick a home loan

Wed, 01 Jul 2009 21:23:10 GMT

Find out what you need to know about payments, interest rates and more. Home loans can be complicated. But choosing one that meets your needs can be much easier if you gather enough information before you make a decision. Here are 20 questions that might apply to your si...

12 questions to help you pick a loan officer

Wed, 01 Jul 2009 21:23:10 GMT

How to select a loan officer who matches your personality and can meet your needs. A savvy loan officer can make a huge difference in your loan-shopping experience, regardless of whether you want to buy a home, start a remodeling project or refinance an existing mortgage. Here are ...

11 questions to ask your mortgage lender

Wed, 01 Jul 2009 21:23:10 GMT

Ask your lender these questions to be sure you choose the mortgage that will best meet your needs. So you’ve requested a mortgage and received three or four home loan offers. Now what? Here are the most important questions to ask each lender. 1. What is the interest rate? This is the most obvious ...

What is PITI?

Wed, 01 Jul 2009 21:23:10 GMT

PITI stands for principal, interest, taxes, and insurance: the components that make up your monthly mortgage payment. Q: In many mortgage articles I see references made to "PITI." Could you please explain what this is? A: PITI is an acronym lenders use to describe the different components that make up your...

What is a Truth in Lending statement?

Wed, 01 Jul 2009 21:23:09 GMT

A Truth in Lending (TIL) statement can help you decide if a loan is right for you. But making sense of this document is not always easy. A Truth in Lending disclosure statement is one of the more important documents in the mortgage process. It is designed to help borrowers understand their borrowing costs in their entirety. Federal la...

Understanding your escrow account

Wed, 01 Jul 2009 21:23:09 GMT

Your escrow account is an integral component of your mortgage. Learn more about your escrow account and how it should be managed. As part of the home loan process, borrowers usually have to establish an escrow or impound account in which to deposit real estate taxes and insurance premiums. The purpose of such an account is to m...

Understanding lender fees

Wed, 01 Jul 2009 21:23:09 GMT

Before you sign with a mortgage company, find out a little more about lender fees and what they all mean. When buying a home, finding the right house and making an offer are just the beginning. Once your bid is accepted, the real fun begins – deciding on a mortgage provider. Finding the right lender can ...

The Good Faith Estimate (GFE)

Wed, 01 Jul 2009 21:23:09 GMT

Lenders list all the costs associated with a mortgage in the GFE document. Use it to compare offers. When you apply for a mortgage, the government requires your lender to give you a “Good Faith Estimate” (GFE) within three days of your application. This document sets out all the costs associated wit...

The basics of discount points

Wed, 01 Jul 2009 21:23:09 GMT

Points can lower your mortgage rate. But you need to do the math to make sure they're worth it. Discount points are paid up front to obtain a lower interest rate on your mortgage. The more points you pay the lower the rate you obtain. Typically, one point equals one percent of the loan amount a...

Mortgages: It's NOT all about the monthly payment

Wed, 01 Jul 2009 21:23:09 GMT

Factors other than your monthly payment should be considered when choosing a home loan. No one wants to make too-high monthly mortgage payments. But becoming so mesmerized by a low payment that you ignore the other aspects of a new home loan can be a costly mistake. That's because a hom...

Mortgage lock-ins

Wed, 01 Jul 2009 21:23:09 GMT

A mortgage lock-in, also called a rate-lock, is a lender’s promise to hold a certain interest rate and points for you for a specified period of time. When you’re looking for a mortgage, you should shop among lenders for the most favorable interest rate and the lowest points and other up-front charges. Lock-ins are a way to ensure that at settleme...

Mortgage acronym cheat sheet

Wed, 01 Jul 2009 21:23:09 GMT

Confused by what may seem like an alphabet soup of mortgage terms? Learn what they all mean in this glossary of mortgage acronyms. APR: Annual Percentage Rate. This expresses the annual cost of borrowing as a percentage of the loan amount. It factors in not only the interest rate, but also the fees associated with the loan. Beca...

Home tax deductions

Wed, 01 Jul 2009 21:23:09 GMT

Besides the inherent joy of owning your own home, becoming a homeowner provides you with potential tax savings. The federal government wants more Americans to own their own homes, so it has created the following forms of home tax deductions as incentives: Mortgage interest and property tax You are able to dedu...

Escrow: What it is and how it works

Wed, 01 Jul 2009 21:23:09 GMT

Chances are your lender will require you to open an escrow account for insurance and taxes when you take out a mortgage. If you’ve ever made an informal bet with a friend, you may have asked a third person to hold the money until the wager was resolved. When you take out a mortgage to buy a home, you’re doing something...

Common mortgage terms

Wed, 01 Jul 2009 21:23:09 GMT

Making sure you understand some common mortgage terms can help when you're applying for a mortgage. When dealing with the lending world, it can sometimes feel like everyone is speaking a foreign language. Learning the following key mortgage terms can help the process go more smoothly. • Appraisal:...

Budgeting for closing: Costs and fees to get a mortgage

Wed, 01 Jul 2009 21:23:09 GMT

Expect to pay for an appraisal, credit report and other loan-related items. Most borrowers know a new loan involves a lot of paperwork. But borrowers don't always know a new loan also involves a lot of fees and costs in addition to the monthly payments. The amounts vary from...

Ask an expert: Should you pay discount points on an ARM?

Wed, 01 Jul 2009 21:23:09 GMT

Q: Does it make sense to pay discount points on an adjustable-rate mortgage? A: When you pay discount points, you pay money, often upfront, to reduce the interest rate on a mortgage and lower your monthly payments. With an adjustable-rate mortgage, paying points will reduce o...

A Good Faith Estimate (GFE) details mortgage fees

Wed, 01 Jul 2009 21:23:08 GMT

A GFE shows approximately how much your home loan will cost. Mortgage lenders must issue a Good Faith Estimate disclosure within three business days once you apply for a mortgage. Application  is defined as the submission of the following information ...

When to choose a fixed-rate mortgage

Wed, 01 Jul 2009 21:22:30 GMT

Sometimes the security and stability of a fixed-rate mortgage can make it the best choice for your needs. With all the buzz these days about new mortgage options, it may be tempting to bypass a traditional fixed-rate loan when shopping for a mortgage. But often it’s the best choice. A fixed-rate mortgage...

That low interest rate may be too good to be true

Wed, 01 Jul 2009 21:22:30 GMT

A 'teaser' or 'introductory' interest rate that looks attractive now could cost a lot more later. "2.9 percent for three months!" "Your rate could be this low!" "Pay just $325 a month!" You’ve seen the ads, but are these home loan offers a good deal? The answer natur...

Shopping around for a loan

Wed, 01 Jul 2009 21:22:30 GMT

Shopping around for a loan can save you money. Shopping around for a loan improves your chances of saving money. Different lenders offer different products, so comparison shopping helps you find the best loan deals around. There are several thin...

Rate caps can curtail ARM payment shocks

Wed, 01 Jul 2009 21:22:30 GMT

Adjustable-rate mortgages come with special rules called rate caps that limit how much your payment can increase. Virtually all adjustable-rate mortgages, including the traditional, hybrid, option-payment and interest-only varieties, feature caps that limit how much the interest rate--and consequently your month...

New construction: Should you finance through your builder?

Wed, 01 Jul 2009 21:22:30 GMT

There are pros and cons of arranging mortgage financing through your builder's affiliated lender. Last time you bought a new car, the dealer probably offered to arrange financing. Even furniture and electronics stores offer instant approval if you sign up for their in-house credit cards. Home bui...

Mortgage tips for people who relocate frequently

Wed, 01 Jul 2009 21:22:29 GMT

Relocating again? Consider these tips for staying on top when you buy and sell homes frequently. People who relocate frequently have special needs when it comes to financing home purchases, especially in today’s real estate and lending climate. Two major factors for people who relocate frequent...

Mortgage interest rate trends

Wed, 01 Jul 2009 21:22:29 GMT

A shift in interest rates can make a big difference in your mortgage financing decisions. Interest rates can affect the type of mortgage you choose and dictate when it’s wise to make a change. Here are a few of the factors that can be affected by a swing in interest rates: Choosing a mor...

Mortgage calculators do the math in a snap

Wed, 01 Jul 2009 21:22:29 GMT

Shopping for a loan or mortgage? You no longer have to be good with a spreadsheet to accurately crunch the numbers. Online mortgage calculators make it faster and easier than ever to compare loan products and figure out how much you can afford to borrow. In fact, mortgage calculators can help you get answers to ma...

Locking the mortgage terms

Wed, 01 Jul 2009 21:22:29 GMT

Lenders may offer different options for locking the interest rate and points that you will be charged. Locked-in interest rate with locked-in points You lock both the interest rates and points. Considered a true lock because your mortgage terms should not increase before closing even if market cond...

How to save money on your mortgage

Wed, 01 Jul 2009 21:22:29 GMT

More than a low monthly payment, the best way to save is to pick the mortgage loan that reduces your long-term costs. Understandably, when most home buyers look for a mortgage, their top priority is to get the lowest monthly payment. But it’s a better idea to look at how much it’s going to cost you over the long ter...

How to lower your interest rate

Wed, 01 Jul 2009 21:22:29 GMT

Shopping for a loan that meets your needs is only part of the interest rate equation. Advertisements for home loans are packed with eye-catching interest rates that oftentimes seem to be too low to be true. And in fact, those rock-bottom rates aren't available to most borrowers. Yet s...

How the Fed affects interest rates

Wed, 01 Jul 2009 21:22:29 GMT

LendingTree's Chief Consumer Officer Ed Powell answers common questions about how interest rates are affected by the Fed. Q: What is the Fed and how does it affect interest rates? A: The Fed is short for the Federal Reserve, an independent entity created by Congress in 1913 to help promote a sound banking system and a ...

Home buyers nab low interest rates

Wed, 01 Jul 2009 21:22:29 GMT

Lowest interest rates in almost four decades present prime opportunity for home buyers. Mortgage interest rates have now fallen to the lowest level on record for at least the last 37 years. The average rate on a 30-year fixed-rate mortgage was just 5.01 percent with an average 0.6 point...

Finding the best mortgage for you

Wed, 01 Jul 2009 21:22:29 GMT

There are dozens of mortgage products available. Here's help in picking the loan that's right for you. Home buyers can choose from many different types of mortgages. The basic models are fixed rate mortgages and adjustable rate mortgages or ARMs. More choice is created when lenders vary the term of th...

Finding a mortgage that fits your life

Wed, 01 Jul 2009 21:22:29 GMT

There's a loan to fit most any situation. Use our tips to help you find the mortgage that's right for you. If you’re shopping around for a mortgage or other loan, you’ve got a dizzying variety of products to pick from. The choices can be confusing, but the good news is that with a little careful planning ...

Builder buy-downs lower monthly mortgage payments

Wed, 01 Jul 2009 21:22:29 GMT

Builders offer interest-rate incentives to entice buyers to purchase a home. But are mortgage buy-downs a good deal? New-home builders typically are loath to reduce prices on new-built homes, but they may offer affordability-constrained buyers a variety of other financial incentives. One such incentive is the inter...

Borrowing resolutions: Easy tips for trimming your borrowing costs

Wed, 01 Jul 2009 21:22:29 GMT

Is buying a new home on your list of "to dos" in 2007? Learn a few simple tips that can help cut your borrowing costs. With 2007 in full swing, you may have already started thinking about the months ahead with a New Year’s resolution of purchasing a new home. Of course, with this idea comes the excitement of owning y...

Ask an Expert: Negotiating a better mortgage interest rate

Wed, 01 Jul 2009 21:22:29 GMT

Q: How can I negotiate a better mortgage interest rate? A: When you discuss your mortgage, it may feel like the lender holds all the power. It shouldn’t. Lenders want your long-term business, and in a competitive loan market, borrowers can often negotiate...

Ask an Expert: Buying and selling a home

Wed, 01 Jul 2009 21:22:28 GMT

Q: How can I avoid carrying two mortgages when buying and selling a home at the same time? A: Moving is stressful enough without the prospect of finding yourself owning two houses -- and two mortgages. Unfortunately, if you buy a new home and are unable to sell your current home before clo...

Your down payment: Why the source matters

Wed, 01 Jul 2009 21:22:07 GMT

Knowing the source of a down payment is important to a lender. It reassures them that you intend to repay the loan. When you purchase a home, you need to do more than just produce funds for the down payment. You also need to document where the funds are coming from. Here’s why: Assurance of sufficient assets The ...

Which is better: PMI or piggyback loan?

Wed, 01 Jul 2009 21:22:07 GMT

Here's how to weigh your options if you plan to buy a home with a down payment of less than 20 percent. Homeowners who make a down payment of less than 20 percent are usually required to pay private mortgage insurance (PMI), because they are considered to be at higher risk of default. PMI premiums are ...

What is the standard down payment amount today?

Wed, 01 Jul 2009 21:22:07 GMT

The standard down payment has changed from 20 percent to what works best for the homebuyer. You make many decisions when purchasing a home. One of these is how much of a down payment to make. In the past, 20 percent was considered the standard down payment. You may wonder if this still hold...

Ups and downs of down payments

Wed, 01 Jul 2009 21:22:07 GMT

A hefty down payment isn't required to buy a home, but starting out with some equity can be a smart decision. Prospective home buyers often cite the down payment as a significant hurdle to their home-buying plans. The first step to jump over that hurdle is to examine the alternatives and come up with a down ...

The second trust (piggyback) loan

Wed, 01 Jul 2009 21:22:07 GMT

If you can't come up with a 20 percent down payment, a second trust (piggyback) loan may help. If you cannot afford a 20 percent down payment on your house, you may still be able to purchase a home. Depending on your financial picture, some lenders will allow smaller down pay...

Pulling together a down payment

Wed, 01 Jul 2009 21:22:07 GMT

Tips for saving for a down payment. When you venture into the housing market for the first time, you want to buy the best home you can afford. But coming up with 15 to 20 percent of your purchase price up front can be challenging. Here...

Piggyback loans let you tap your home equity when buying

Wed, 01 Jul 2009 21:22:07 GMT

Homebuyers can use a second mortgage or line of credit to help with a down payment, or to finance other needs and wants. A "piggyback" loan is usually defined as any type of second loan that’s closed at the same time as your first mortgage. The piggyback may be a traditional second mortgage known as a home eq...

Low down payment? A piggyback loan or PMI can help

Wed, 01 Jul 2009 21:22:07 GMT

Without a 20-percent down payment, you'll need to pay for either a second loan or private mortgage insurance (PMI). You’re ready to buy a home and you’ve decided to make a down payment that’s less than 20 percent of the purchase price. That decision triggers yet another one: Should you obtain a piggyback loan to c...

Is your down payment too big?

Wed, 01 Jul 2009 21:22:06 GMT

It may not always be in your best interest to make the largest down payment you can when buying a home. For many people, especially those buying their first home, it may seem as if the larger the down payment they can make, the better. But there’s a point where your deposit could be too large given you...

How much to put down on a home

Wed, 01 Jul 2009 21:22:06 GMT

Unsure about how much you need to save in order to make a down payment on a home? There are several options. It’s not always easy to save up enough to make the traditional 20 percent down payment on a home. Fortunately, lenders today offer many low-down-payment mortgages. But when deciding how much to put d...

How much of a down payment do you need?

Wed, 01 Jul 2009 21:22:06 GMT

When saving for a down payment on a home, if you've been able to save 30 percent instead of just 20 percent, you can decide how much to put down. As you prepare for a home purchase, you save for a down payment. Perhaps your down payment savings equals 30 percent (or more) of the purchase price of the home you want to buy. Now your question is,...

Finding a no money down mortgage

Wed, 01 Jul 2009 21:22:06 GMT

A no money down mortgage allows you to finance 100% of the purchase price of the home. But beware of the risks. There are many options in financing when buying a home. Getting a no money down mortgage may be an option for you, if you don’t have much money saved to buy a home. A no money down mortgage means yo...

Down-payment assistance programs

Wed, 01 Jul 2009 21:22:06 GMT

If you are struggling to save enough to make a down payment on a home, there are assistance programs available to help. So you’ve found your dream home but are having trouble finding the money for a down payment. Consider using a down-payment assistance program to help turn your dream into a reality. What’s a down pay...

Down payment: What is the purpose?

Wed, 01 Jul 2009 21:22:06 GMT

Why do lenders want a down payment when you purchase a home? It's all about security. It’s standard procedure to make a down payment on a home at closing, and lenders have a good reason for wanting you to make one. Security for the lender A down payment provides security for the lend...

Do I have to have private mortgage insurance (PMI)

Wed, 01 Jul 2009 21:22:06 GMT

Depending on your situation, there may be alternatives to expensive PMI. Private mortgage insurance (PMI) adds hundreds or even thousands of dollars a year to mortgage payments, so it’s logical to wonder whether there’s any way to avoid paying it. The best way to avoid P...

Canceling private mortgage insurance (PMI)

Wed, 01 Jul 2009 21:22:06 GMT

Have you built up a fair bit of equity in your home? You may qualify to cancel private mortgage insurance and save hundreds or even thousands of dollars per year. Chances are, if you put less than 20 percent down when you purchased your home, your mortgage lender required you to take out private mortgage insurance (PMI). This insurance protects the lender in t...

Borrowing your down payment

Wed, 01 Jul 2009 21:22:05 GMT

You can borrow your down payment for a house and lower your monthly payments, as well as avoid private mortgage insurance. Buying a house is a serious financial commitment which, for most, takes a great deal of planning and saving. You may have already learned how a down payment on a home can lower your monthly payments ...

What you should know about payment-option ARMs

Wed, 01 Jul 2009 21:21:31 GMT

Those minimum payments may look enticing, but they can increase your loan balance and cost you more in years to come. Most adjustable-rate mortgages aren't as complex as they may seem. But add a “minimum-payment” option, and a lot more complexity sets in to the basic ARM. Typically, adjustable rate mortgages, or &qu...

What you need to know about an interest-only mortgage before signing

Wed, 01 Jul 2009 21:21:31 GMT

You can afford to buy a more expensive home, but will you be ready when the big bill comes due? Interest-only mortgages have become more popular as housing costs have skyrocketed. Because homeowners repay only the interest portion of their loan, interest-only mortgages allow smaller payments in...

What you need to know about Adjustable Rate Mortgage (ARM) terms

Wed, 01 Jul 2009 21:21:31 GMT

Consider not just what the mortgage will cost you today, but what it will cost down the road. It’s important to understand adjustable rate mortgage terms before you sign. Some things you’ll want to ask your lender include: How often does the interest rate adjust? ARM terms can include adjus...

What you need to know about a second trust loan before signing

Wed, 01 Jul 2009 21:21:31 GMT

Financing part of your down payment eliminates the need for private mortgage insurance. Second trust loans, also known as piggyback loans, have become a popular way of coming up with a 20 percent down payment on a home if you can’t produce the entire amount. Twenty percent down is the a...

What you need to know about a piggyback loan before signing

Wed, 01 Jul 2009 21:21:30 GMT

This financing option eliminates the need for expensive private mortgage insurance. A piggyback loan is taken out to finance part of the down payment on a home so a buyer can put 20 percent down. That’s the magic number needed to avoid private mortgage insurance (PMI). A piggyback ...

What you need to know about a flexible payment mortgage before signing

Wed, 01 Jul 2009 21:21:30 GMT

Flexible monthly payments can help in a crunch if you have the discipline to manage this mortgage properly. A flexible payment mortgage is just that: a mortgage that lets you choose from various payment options each month. It’s probably the most flexible type of adjustable rate mortgage (ARM). Flexible pa...

What is an FHA Loan?

Wed, 01 Jul 2009 21:21:30 GMT

An FHA loan is a great tool to help first-time home buyers own a home. An FHA loan is specifically designed to help first-time home buyers fulfill their dream of owning a home. By making the process easier, they can help those who may be feeling overwhelmed and intimida...

What is an Energy Efficient Mortgage?

Wed, 01 Jul 2009 21:21:30 GMT

A good way to get into an energy-efficient home. An Energy Efficient Mortgage (EEM) is a federally recognized mortgage that makes it more affordable to buy energy-efficient homes or to make existing homes more energy efficient. Because of the lowe...

What is a balloon mortgage?

Wed, 01 Jul 2009 21:21:30 GMT

This short-term home loan can sometimes be useful, provided you understand the potential risks involved. A balloon mortgage is a short-term loan that offers lower monthly payments (and usually a lower interest rate) than a traditional fixed-rate mortgage because it’s not fully paid off at matur...

Understanding adjustable rate mortgage terms

Wed, 01 Jul 2009 21:21:30 GMT

Considering an adjustable rate mortgage (ARM)? Understanding some common terms can help determine if it's right for you. There are so many mortgage products on the market today that it can be confusing. For example, one option is an adjustable rate mortgage (ARM). Here are some terms you may encounter that can help you...

Reverse mortgages

Wed, 01 Jul 2009 21:21:30 GMT

If you are 62 or older and short of cash, a reverse mortgage can help you stay in your home and meet your expenses. How can you get cash out of your home? One way is to sell – but then you have to move. Another is to take out a home equity loan. But you’ll have to pay it back. The third option—for those 62 and old...

No-cost mortgage loans

Wed, 01 Jul 2009 21:21:30 GMT

Tempted to choose a mortgage with no upfront costs? Be careful you don't just save now and pay later. To anyone shopping for a home loan, a “no-cost mortgage” is bound to seem like a great deal. Closing costs (typically around 3 to 5 percent of the loan amount) can run into the thousands of dollars o...

Meet Fannie Mae and Freddie Mac Home Loans

Wed, 01 Jul 2009 21:21:30 GMT

Here's how Fannie Mae and Freddie Mac, two government-sponsored organizations, help make home ownership possible for many Americans. If you’re on the path towards homeownership, chances are you will run into Fannie Mae and Freddie Mac somewhere along the way. Neither one lends money to consumers directly, but both of these huge fi...

Low credit score loans

Wed, 01 Jul 2009 21:21:30 GMT

You can still get a good rate on your mortgage with an FHA loan even though you have a low credit score. A mortgage is a major expense. But it can be even more costly when your credit score is less than perfect as you may end up being charged a higher mortgage interest rate for a subprime mortgage. How ...

Jumbo loan basics

Wed, 01 Jul 2009 21:21:30 GMT

Jumbo loans offer large loan amounts for borrowers in high-cost markets, but may come with stricter qualifying requirements and higher interest rates. If you want to borrow an especially large amount of money to buy a home or refinance your existing mortgage, you may already be familiar with the term "jumbo loan," but you might not know a...

Is a hybrid mortgage right for you?

Wed, 01 Jul 2009 21:21:30 GMT

A hybrid mortgage can offer you the security of a fixed-rate mortgage at a lower rate. Most homeowners understand the difference between fixed-rate and adjustable-rate mortgages (ARMs). A hybrid mortgage, as its name suggests, combines the features of both. It starts off like a fixed-r...

Interest-only mortgages

Wed, 01 Jul 2009 21:21:30 GMT

An interest-only mortgage offers lower initial monthly payments but those payments will rise. Make sure you understand the terms of an interest-only mortgage before you sign. How interest-only mortgages workWhen you take out a traditional mortgage, you pay the lender a monthly amount that’s ...

Get acquainted with home construction financing

Wed, 01 Jul 2009 21:21:29 GMT

A construction loan can help you fund large home improvement projects. One of the most popular reasons that homeowners seek out financing is to fund large construction projects such as room additions, deck builds, and bath and kitchen remodels. What most homeowners new ...

FHA Loan Eligibility

Wed, 01 Jul 2009 21:21:29 GMT

You may be a good candidate for an FHA loan. An FHA loan is a federally insured loan made by the Federal Housing Administration, which has been insuring mortgages since 1934. FHA loans are very good options for specific borrowers. FHA loan ove...

Energy Efficient Loans: How They Work

Wed, 01 Jul 2009 21:21:29 GMT

Using less energy could allow you to qualify for a larger mortgage. An energy efficient loan can enable a home buyer to qualify for a larger mortgage if they’re buying a home with energy-saving characteristics. If the home qualifies, the lender will often be willing ...

Bridge financing basics

Wed, 01 Jul 2009 21:21:29 GMT

If your new home closes before the one you are selling, you'll probably need bridge financing. Here's how it works. You’re looking for your next home, and walk into the place of your dreams. The space is tailor-made, the location is perfect, even the price is right. Just one problem: the owner of your dream home h...

Beware of non-traditional mortgages

Wed, 01 Jul 2009 21:21:29 GMT

Tempted to choose a non-traditional mortgage with the lowest payments possible? You'd better first assess their risks. Over the past couple of years, there has been a significant increase in the number of non-traditional mortgage loans. These mortgages have made houses affordable for many people who are simply not ab...

Benefits of government-backed loans

Wed, 01 Jul 2009 21:21:29 GMT

FHA, VA, RD loan programs guarantee low or no-down payment mortgages. Government-backed loans have become more popular among mortgage shoppers in recent years largely because they offer easier qualification guidelines and attractive interest rates. A "government-b...

Adjustable rate mortgages: What you need to know

Wed, 01 Jul 2009 21:21:29 GMT

If you're considering an adjustable rate mortgage (ARM), here's what you need to know before you sign. One of the attractive things about a fixed-rate mortgage is its simplicity: your interest rate never changes, and neither does your monthly payment. With an adjustable rate mortgage, however, your in...

Adjustable rate mortgages (ARM)

Wed, 01 Jul 2009 21:21:29 GMT

Understand the terms of an adjustable rate mortgage (ARM). With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable rate mortgage (ARM), the interest rate changes periodically, usually in relation to an ind...

80/10/10 financing

Wed, 01 Jul 2009 21:21:29 GMT

80/10/10 financing can get you into a home with a lower down payment but still avoid PMI. One option to getting into a home without making a large down payment is through 80/10/10 financing. It can be a good alternative to saving for a large down payment. What exactly is 80/10/10 financin...

40-year mortgages

Wed, 01 Jul 2009 21:21:29 GMT

You'll get lower monthly payments with a 40-year mortgage, but consider the drawbacks as well. As home prices have risen in recent years, new strategies have emerged to help buyers afford a home. But one of these “new” strategies is really an old one that’s returned to favor: the 40-year mortg...

Why mortgage lenders require escrow accounts

Wed, 01 Jul 2009 21:21:04 GMT

An escrow account doesn't just protect you, the borrower. It also protects the lender's vested interest in your property. Think of an escrow account as a safety net for your home. It financially safeguards both you and your lender against liens and property damage. Since most of us do not have the means to buy a home o...

Why loan-to-value ratio is important

Wed, 01 Jul 2009 21:21:04 GMT

Lenders calculate this percentage when determining if you will be approved for a mortgage. When you apply for a mortgage, one of the things that lenders want to know is what portion of the value of the home you wish to finance. In other words, they want to know how much of a down payment y...

Why lenders want documents

Wed, 01 Jul 2009 21:21:04 GMT

Tax returns, W-2s, bank statements--the list goes on. Why does getting a loan involve so much paper? Lenders are no more enamored of paperwork for its own sake than you probably are. Yet lenders see the necessity of documentation to support and verify the statements you made on your loan application...

Why it can be difficult to get a small mortgage

Wed, 01 Jul 2009 21:21:04 GMT

It can be tough to find a first mortgage of less than $80,000, but home buyers do have choices. Do you live in an area where homes can be bought for $120,000 or less? If so, lucky you! Relatively inexpensive housing is a tremendous boon for prospective home buyers. Yet borrowers who need a comp...

Who can get an Energy Efficient Mortgage?

Wed, 01 Jul 2009 21:21:04 GMT

A borrower who is buying or refinancing an energy-efficient home. An Energy Efficient Mortgage (EEM) allows you to buy a more expensive home than you could have otherwise. An energy-efficient home incurs significantly lower monthly utility costs than its non-energy...

When is your mortgage loan approved?

Wed, 01 Jul 2009 21:21:04 GMT

Financing isn't set until both the borrower and the mortgage property are okayed. Many home buyers find it difficult to navigate the process of getting a loan to buy a home. Many potential borrowers mistakenly believe a mortgage "pre-qualification" or "pre-approval&...

What to do when you are denied credit by a lender

Wed, 01 Jul 2009 21:21:03 GMT

Take a look at your credit history and debt-to-income ratio if your loan application has been denied. It's not uncommon for prospective home-loan borrowers to receive the dreaded news that their application has been denied. While no one welcomes a lender's "adverse action" letter, there are...

What interest rate will you pay on your loan?

Wed, 01 Jul 2009 21:21:03 GMT

Find out what factors determine the interest rate you'll be offered on a home loan. If you've decided to buy a home or refinance your mortgage, you may be puzzled by the different interest rates you've seen advertised for home loans. You're not alone: Many home buyers and homeowners...

Ratio of debt to annual income

Wed, 01 Jul 2009 21:21:03 GMT

Q: What is the general ratio of debt to annual income that lenders allow when they are considering you for a standard mortgage or line of credit? A: The standard rule for most lenders is that your debt-to-income ratio should be no higher than 36 percent. In other words, when you add up all of your regular monthly debts such as car, mortgage an...

Qualifying for a home loan

Wed, 01 Jul 2009 21:21:03 GMT

Mortgage lenders will look at your ability to repay the loan when qualifying you for a loan. Qualifying for a home loan is an important step in buying a home. Understanding the process can help ensure that you are able to qualify for the home loan that you need. Lenders look at two things w...

Minimum requirements to qualify for a mortgage

Wed, 01 Jul 2009 21:21:03 GMT

In the market for a mortgage? Know what lenders are looking for in borrowers. Have you reached the point in your life when you’re tired of renting and want to take the plunge into home ownership? Buying a home is an exciting step, but before you start packing, you may want to ...

Getting preapproved takes on new importance

Wed, 01 Jul 2009 21:21:03 GMT

Getting preapproved for a mortgage can help you buy a home you can afford. If you're getting ready to buy a home, you probably already know that lower home prices and interest rates have made homes much more affordable. But did you also know that getting preapproved for a m...

Getting a mortgage if you're self-employed

Wed, 01 Jul 2009 21:21:02 GMT

Managing your credit, keeping good financial records and documenting your income are crucial if you are self-employed and plan to get a mortgage loan. Self-employed people and others with irregular income could be caught in a squeeze as mortgage lenders continue tightening lending guidelines in response to the problems in the lending industry. On p...

Getting a bad credit mortgage

Wed, 01 Jul 2009 21:21:02 GMT

Know the best way to get a mortgage if you have a low credit score. If your credit score is low, a bad credit mortgage may seem like the way to fulfill your dream of buying a house. Here are some things to consider if you are thinking of taking out a mortgage and you...

Getting a bad credit loan

Wed, 01 Jul 2009 21:21:02 GMT

Be cautious, do your homework and make an informed decision. If you are planning on taking out a bad credit loan, make sure you put some thought into your decision. Your loan payment will probably take up a considerable portion of your income for a number of y...

Dos and don'ts when applying for a home loan

Wed, 01 Jul 2009 21:21:02 GMT

Common errors can delay final approval of your home loan. Most lenders rely on a standard home loan application that asks you to disclose basic information about your financial situation. The questions are reasonably straightforward, but there are some easy...

What credit score do you need to get a mortgage?

Wed, 01 Jul 2009 21:21:02 GMT

Q: How high a credit score do you need to have in order for lenders to approve you for a mortgage? In the wake of the mortgage foreclosure crisis, mortgage lenders ratcheted up their minimum credit score requirements. The government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, for exam...

Credit categories dictate mortgage loan products

Wed, 01 Jul 2009 21:21:02 GMT

Borrowers who score high are offered the most attractive mortgage interest rates and terms. If you’re wondering how lenders decide which loan products to offer to which borrowers, you might want to learn more about mortgage credit categories, which include Plus, A, Alt-A, B, C and D. High c...

Checklist: Home-buyer documents for mortgages

Wed, 01 Jul 2009 21:21:02 GMT

Here are some documents that you may be required to provide during the mortgage application process: Employment information. Names, addresses and telephone numbers of all your employers for the las...

Checklist: Documentation for your mortgage lender

Wed, 01 Jul 2009 21:21:02 GMT

When you apply for mortgage financing, you must provide the following documentation to the lender before your loan is granted: Name and address of landlord(s) for the past two years (if eligible). ...

Calculating your debt-to-income ratio

Wed, 01 Jul 2009 21:21:02 GMT

Before looking for a mortgage, determine how much debt you can manage. Know how to calculate your debt-to-income ratio. When you shop for a mortgage or other loan, one of the key factors a lender takes into consideration before granting approval is your debt-to-income ratio. This is the ratio between how much you owe ...

Buying a home with a low down payment

Wed, 01 Jul 2009 21:21:02 GMT

Looking for a mortgage that doesn't require a 20 percent down payment? Here are some options. Down payment requirements can be the biggest hurdles for would-be homeowners. However, there are programs that require low or no down payments. Typical down payments for primary residences range fro...

Ask an Expert: Spouse with poor credit

Wed, 01 Jul 2009 21:21:02 GMT

Q: My spouse has a poor credit rating, but my credit is quite good. How should we complete a mortgage application in order to get the best rate? Do we have to include his name on our mortgage? A: If you are planning to buy a home with a spouse who has poor credit, you have several options when you apply for a mortgage. First, you can purchase the house on your own and apply for the mortgag...

Ask an Expert: Employment required for a mortgage

Wed, 01 Jul 2009 21:21:02 GMT

Q: How long do you need to be employed in order to qualify for a mortgage? A: Employment status is an important part of the mortgage approval process. Your career history can be a good indication of how easy it will be for you to meet your payments. That’s why, as a rule of...

Ask an expert: Co-signer for a mortgage

Wed, 01 Jul 2009 21:21:02 GMT

Q: Do I need a co-signer to qualify for a mortgage if I am self-employed? If so, what does this involve? A: Because lenders like to see proof of a regular income, it’s sometimes more difficult to get approved for a mortgage if you are self-employed. However, this does not necessarily mean you will need ...

Anxious about getting a home loan?

Wed, 01 Jul 2009 21:21:02 GMT

Go slowly to establish trust and get a home loan that meets your needs. Let’s be honest: Applying for a home loan can be one of life’s most stressful experiences, and many people, especially first-time borrowers, are anxious about taking that first step. Being nervous is...

3 things to know before you apply for a loan

Wed, 01 Jul 2009 21:21:02 GMT

Check out these tips before you finance a car, a home or even a college education. There’s nothing like being armed with knowledge to save yourself some money, so it stands to reason that it pays to educate yourself before financing any major purchase. Here are three things you sho...

Step 9: Your mortgage check-up

Wed, 01 Jul 2009 21:21:01 GMT

Once you have bought your house and settled in, it is important give yourself a mortgage check-up every few years. Keeping your eye on interest rates can help save you money on your mortgage. Reasses...

Step 8: Closing your mortgage loan

Wed, 01 Jul 2009 21:21:00 GMT

After locking in your rate and points, you’re close to the finish line. The last step is closing, which will likely include writing a large check to your lender. Closing requires a great deal of pape...

Step 7: Lock in your mortgage interest rate and points

Wed, 01 Jul 2009 21:21:00 GMT

Since it’s often weeks, and sometimes months, between getting prequalified and closing on your home, it’s a good idea to lock in your interest rate and points. What is a rate lock? A lock is a commit...

Step 6: Getting pre-approved by your mortgage lender

Wed, 01 Jul 2009 21:21:00 GMT

Now that you’ve chosen your lender, you’ll want to get preapproved. Preapproval means that your lender has thoroughly checked your finances, including your income and debts, and has given you the thu...

Step 5: Compare mortgage offers

Wed, 01 Jul 2009 21:21:00 GMT

It's a good idea to compare offers from multiple lenders when looking for a mortgage. When buying a home, you shop around for the house that best suits your wants and needs. But did you know that you should do the same for your mortgage? One of the first things you should look at when...

Step 4: Getting prequalified for a mortgage loan

Wed, 01 Jul 2009 21:21:00 GMT

It’s a good idea to get prequalified for your mortgage before shopping for a home. Prequalification involves supplying a lender with basic information regarding your debt, income and assets. From thi...

Step 3: Finding the best mortgage for you

Wed, 01 Jul 2009 21:21:00 GMT

One of the most important steps in buying a home is determining what kind of mortgage is right for you. After all, a mortgage is a financial commitment that will last for many years. Make sure you se...

Step 2: How much can you afford to borrow?

Wed, 01 Jul 2009 21:21:00 GMT

We can help you calculate how much you can afford to borrow. Before you start looking at homes, it’s important to start off with a budget so you know how much you can afford. Knowing how much you can handle will also help you narrow the field so you don’t wast...

Step 1: Check your credit score

Wed, 01 Jul 2009 21:21:00 GMT

Deciding to buy a home is a major financial decision. For most people, buying a home cannot be done without a mortgage, so it is important that you know where you stand financially before making a la...