equity loans, Iowa IA
Missouri (MO)
Montana (MT)
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equity loans, Iowa IA |
Mississippi (MS) Missouri (MO) Montana (MT) |
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equity loans - Iowa IA: Loans & Mortgages :: Refinancing :: Bad credit loans :: First time buyers home loans :: Advice on the best loan for you :: Mortgage advisor. What Is A Loan To Value (LTV) And How Does It Determine The Size Of The Loan? The loan to value ratio is the amount of money you borrow compared with the price or appraised value of the home you are purchasing. Each loan has a specific LTV limit. For example: With a 95% LTV loan on a home priced at $50,000, you could borrow up to $47,500 (95% of $50,000), and would have to pay $2,500 as a down payment. The LTV ratio reflects the amount of equity borrowers have in their homes. The higher the LTV the less cash homebuyers are required to payout of their own funds. So, to protect lenders against potential loss in case of default, higher LTV loans (80% or more) usually require mortgage insurance policy. The Advantages of Different Types of Mortgage Lenders, continuedRepayment Plans - These are verbal agreements allowing you to make a full payment and late charge plus a portion of another payment each month until you bring your loan current. These plans typically last no longer than four months. For example, if you are unable to make your payment this month, you may be allowed to establish a repayment plan where you would make one and one-half payments (plus late charge) next month and the following month to bring your loan current. What is a rate lock-in? A lock-in, or rate lock option, ensures the borrower a commitment to a specified mortgage rate, including not only the interest rate but also its discount/origination points. The borrower must agree with an authorized representative of East West Mortgage Company for a specific interest rate in order to choose this option. It is also possible to choose not to lock-in a specific rate, but instead to float for a certain number of days. Floating means simply a borrower electing to have interest rates move up and down according to market conditions until a specific rate is elected to be locked-in. All borrowers electing this option must lock-in a rate and its discount points at least five (5) business days prior to a scheduled settlement, or else your settlement will be delayed. Documents Required for Closing Your New Home Mortgage LoanWhat is Prepaid Interest? This is interim interest that accrues on the mortgage loan from the date of the settlement to the beginning of the period covered by the first monthly payment. Since interest is paid in arrears, a mortgage payment made in June actually pays for interest accrued in the month of May. Because of this, if your closing date is scheduled for June 15, the first mortgage payment is due August 1. The lender will calculate an interest amount per day that is collected at the time of closing. This amount covers the interest accrued from June 15 to July 1. First, the two types of loans are a conforming loan and a non-conforming/jumbo loan. Conforming loans are for amounts between $50,000 to $214,600. Jumbo loans cover loan amounts between $214,600 to $650,000. Higher loan values have special quotes. Loans can be fixed or variable (ARMS). Fixed rate loans are amortized over a period of 30, 15, or 10 years. Due to shorter commitments for rates, ARM (Adjustable Rate Mortgage) rates are typically lower than longer term rates. These are best suited for transient borrowers.If the seller wishes to be released from liability on a loan which is freely assumable, the buyer and seller may request we complete a qualifying assumption. If we give credit approval of the buyer, we will release the seller from liability. When does it make sense to pay points? Points are a one-time fee that a borrower pays to lower the interest rate. Points are defined as a percentage of your loan amount, with one point being equal to one percent of your loan. For example, if you borrow $200,000, one point would be equal to $2,000. Paying one point will generally reduce your interest rate by approximately .25%. In order to protect the investment both you and Principal Residential Mortgage, Inc. have made in your home, it is required that you maintain adequate insurance coverage on your property at all times. Without this coverage, there may not be funds available to repair your home in the event it is damaged. An adjustable rate mortgage is considerably different from a fixed rate mortgage. ARMs have only been around since the early 1980s. They were created to provide affordable mortgage financing in a changing economic environment. An ARM is a mortgage where the interest rate changes at preset intervals, according to rising and falling interest rates and the economy in general. In most cases, the initial interest rate of an ARM is lower than a fixed rate mortgage. However, the interest rate on an ARM is based on a specific index (such as U.S. Treasury Securities). This index reflects the level of interest rates and allows the lender to match the income from your ARM payment against their costs. It is often selected because it is a reliable, familiar financial indicator. Monthly payments are adjusted up or down in relation to the index. Most ARMs have caps—limits the lender puts on the amount that the interest rate or payment may change at each adjustment, as well as during the life of the mortgage. With an ARM, you typically have the benefit of lower initial rates for the first year of the loan. Plus, if interest rates drop and you want to take advantage of a lower rate, you may not have to refinance as you would with a fixed rate mortgage. An ARM may be especially advantageous if you plan to move after a short period of time. The convertible ARM is an option that is currently very popular because it allows you to convert to a fixed rate mortgage after a specified period of time has elapsed. For instance, you could get a one-year ARM with the option to convert to the prevailing fixed interest rate at any time after the first through the fifth adjustment period. Convertible ARMs offer the ability to take advantage of lower rates initially and have possible savings, and the option to convert to a fixed rate loan later on when you may be able to better afford it. Depending on your financial needs, you might find this option the best of both worlds. As a relatively new phenomena, the purpose of an ARM is often misunderstood. Ask your mortgage lender to explain the details to you so you can determine if this type of mortgage fits your specific financial situation. |
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