While these terms are often interchanged, pre-qualification and pre-approval are two very different concepts. We’ll bring you up to speed and let you know how each can work for you. Pre-qualified Loans This is the first step for obtaining a mortgage, and it’s fairly easy. After choosing a lender, you supply the needed information (including […]
Mortgage buyers who put less than 20% of a down payment at closing will likely pay a PMI, or Private Mortgage Insurance. This policy protects your bank or other lender in the case you can’t pay it back and end up in foreclosure. Unfortunately, you can’t shop around for PMI since the provider adds it
Home buyers who have limited down payments for a home mortgage have the option to get a Mortgage Insurance Premium, also known as: MIP, or simply mortgage insurance. Traditionally a 20% down payment is required on a home, but many homeowners don’t have the ability to put down such a large amount. For instance, 20% of
Within just three days of applying for a loan, you will get a document called a Good Faith Estimate (GFE). These pages outline the terms of the mortgage and the settlement charges. Put into place by the Real Estate Settlement Procedures Act (RESPA), lenders must issue a Good Faith Estimate by law. If you applied
Repairs are costly, especially if you’re turning a less-than-perfect living space into your long-term dream home. DIY-ers who love fixer uppers can apply for a 203k loan from the FHA (Federal Housing Administration). Let’s say it’s costing more effort than you originally thought to make certain fixes to the house. A lender sees the home
Once you feel financially prepared to take on a home mortgage, you are responsible for applying with a lender. There’s a few documents you’ll need before you get started! Credit History First obtain your credit history. It’s less common to find errors or discrepancies in a credit report, but it’s still possible. Discovering these issues
Issued by banks, credit unions, and online lenders, a mortgage is the overall cost of your home payed in monthly installments. A payment is made up of four parts: The Principal Balance An outstanding principal balance is what you owe for the home. If you and a seller have agreed on the price of $175,000
You may hear several terms when lenders talk about this concept, including points, discount points, or mortgage points. All of these terms refer to the same idea. Mortgage points are a way to pay prepaid interest on a loan in exchange for a lower interest rate. When you buy points, you make a one-time payment
Closing costs are the fees associated with your home purchase that are paid at the end of a real estate transaction. They can vary widely based on where you live, the property you buy, and the type of loan you choose. Typically, home buyers pay between 2 to 5 percent of the purchase price of
What are closing costs and why they matter Closing costs are fees that your mortgage lender or financing provider charges for processing and finalizing your home loan. These costs apply whether you buy your first home or your fifth one. When you plan your home purchase budget, you must include closing costs alongside your down
