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Which type of loan is
best for you?
There isn't a single or simple answer to this
question. The right type of mortgage for you depends on many
different factors.
For example, fixed-rate mortgage can save you many thousands of
dollars in interest payments over the life of the loan, but your
monthly payments will be higher. An adjustable rate mortgage may get
you started with a lower monthly payment than a fixed-rate mortgage,
but your payments could get higher when the interest rate changes.
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Mortgage FAQs |
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What is a mortgage?
A mortgage is loan you use to purchase a home-or some other
piece of property. The amount you borrow is called the
principal and each mortgage payment is a combination of
principal and interest. The property remains in the possession
of the borrower, but it may be re-claimed by the lender if the
loan and interest are not paid as agreed. |
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How can
I save money on my mortgage?
The easiest way to reduce the interest costs on your mortgage is
to pay it off sooner. Here's how:
Pay weekly or biweekly. Making your mortgage payments earlier
and more frequently through weekly or biweekly payments can save
on interest compared with monthly payments. Choose a shorter
amortization period. |
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What Can
I Gain by Refinancing?
Reduce your monthly payments by taking advantage of lower
interest rates or extending the repayment period
Reduce your interest rate risk by switching from an
adjustable-rate to a fixed-rate loan or from a balloon mortgage
to a fixed-rate loan
Reduce your interest cost over the life of your mortgage by
taking advantage of lower rates or shortening the term of your
loan
Pay off your mortgage faster (accelerating the build-up of
equity) by shortening the term of your loan. |
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What is
Private Mortgage Insurance?
Private Mortgage Insurance is a type of guaranty that helps
protect lenders against a loss due to foreclosure. This
insurance protection is provided by private mortgage insurance
companies. It allows lenders to accept lower down payments than
you would normally be allowed. In effect, it substitutes for the
borrower's equity that would be available to cover a lender's
losses in the unfortunate event of foreclosure.
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How are
rates determined?
Rates are determined by the secondary market and other financial
indicators. These rates can change daily or even more than once
within the same day. The changes are based on may different
economic indicators in the financial markets. |
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What
is the difference between APR and interest rate?
The APR (annual percentage rate) reflects the cost of your
mortgage loan as a yearly rate. It also incorporates the cost to
obtain the loan, such as: discount fees, loan origination fee,
prepaid interest, and mortgage insurance, if required. The APR
allows you to compare, in addition to the interest rate, the
total cost of financing your loan, among various lenders. The
interest rate is the actual note rate. |
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Do I
need to fill out an application?
Yes, however, it is very easy to complete an application online.
Just
click here to begin the application process. |
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Refinance Tips
With a new
loan, you may be charged a penalty for paying off your original
loan early. So check this first.
The total expense for refinancing depends on settlement costs,
interest rate, points, and other costs required to obtain a
loan.
You can estimate how long it will take to recover the costs of
refinancing by dividing your closing costs by the difference
between your new and old payments
You might consider a 15-year, fixed-rate mortgage. Payments are
higher, but you pay substantially less interest over the life of
the loan and build equity more quickly.
The ultimate amount you may save depends on many factors,
including your total refinancing costs, whether you sell your
home in the near future, and the effects of refinancing on your
taxes.
The old rule of thumb used to be don't refinance unless saving
1% on interest. Zero points and low-cost refinancing can negate
that theory. |
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