Mortgages - What you need to know!

Mortgage pricing is a complicated process.The first step for any borrower looking to obtain the best possible price is to learn how the pricing process works.  Each Mortgage Type Is Priced Separately A 30-year fixed-rate mortgage carries a different price than a 15-year fixed-rate, and the same is true of each type of adjustable rate mortgage (ARM). Loans carrying special options, such as prepayment penalty or interest-only, are also priced separately.  Prices Are Multi-Dimensional Unlike most other products and services, the price of a mortgage has 2 or more dimensions: the interest rate which is paid over the life of the loan, and upfront fees paid at closing. Fees are of two types: those expressed as a percent of the loan, called “points”, and those expressed as a fixed dollar amount. In addition, if the borrower’s equity or down payment is less than 20%, mortgage insurance (MI) is required. The complete price of an FRM, for example, might be 4%, 2 points, $500 ...

When buying a home, there are a lot of factors to consider, one that is important to remember is the difference between cost and price. As a buyer, you must be concerned not about price but instead about the ‘long term cost’ of the home. Last month, the Mortgage Bankers Association(MBA), the National Association of Realtors, Fannie Mae and Freddie Mac all projected that mortgage interest rates will increase by about one full percentage over the next twelve months. We also know that many experts are calling for home prices to also increase over the next year. What Does This Mean to a Buyer? Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 even if home prices don’t increase: Buying A Home: The cost of waiting

How long does it take to close on a purchase?  Lately, the number of days is shrinking.  As mortgage rates climbed this summer, refinance mortgage demand waned, freeing up lenders to close on purchase home loans more quickly. Data from mortgage software firm Ellie Mae shows that lenders needed 42 days, on average, to close an August purchase.  It's a noteworthy reading for today's home buyers. Rate locks of 45 days or fewer  incur fewer costs than locks of even one day more. How To Get Your Purchase Approved More Quickly For buyers wanting to close quickly, some of the loan factors will be beyond your control. For example, you cannot control how fast an appraisal is performed because the appraisal requires the cooperation of the seller; or how fast a title search is performed by a title company. However, there are steps you can take to make sure your loan gets approved as fast as humanly possible. Step one is to be prepared. Know Your Paperwork Requi...