Basics

Mortgage Basics

If you are a new borrower or if you have owned many homes, the wealth of information - and misinformation - about mortgages in today's market can may feel overwhelming. Knowing where to start and how to find accurate and honest information can make or break your home buying experience.

Learn all you can about the current mortgage financing environment before you apply with a lender. Things have changed dramatically in the last several months, so what you think you know might be old news. You can avoid unpleasant - and potentially costly - surprises by being well informed about things like:

Appraisals - Most people do not realize that appraisals are required for all mortgages.... But if the mortgage has a loan to value of 80.01% or higher, the lender will get the mortgage insured and the cost is factored into the insurance premium. If the equity or down payment is 20% or greater; no default insurance is required for most lenders so the cost is passed along to client.

Credit Scores - Requirements for a good credit score, or "BEACON" score have gotten much tighter. Many lenders require good credit (a 620 score or higher), although some programs are available for borrowers with lower scores. We can check your credit score before submitting your application, and discuss options that might work for you if your credit is less than ideal.

Interest Rates - Interest rates can change quickly. We've enjoyed several months of record low rates, allowing many people to refinance or buy a home and save thousands. But the financial markets are still somewhat uncertain. Unexpected financial news may trigger a major swing in the markets, driving bond prices higher or lower in a short period of time. The rate on your mortgage loan will help determine the maximum loan amount you qualify for.