Terms of Use: Closing costs are the fees and taxes associated with purchasing a home. They include searches, clearances, and reports to process the transaction. Depending on where you live and the complexity of your transaction, they can easily add up to thousands of dollars. They're generally around 3% to 6% of the purchase price of the home. Your lender is required to give you a written, good-faith estimate of all your closing costs within three days of your applying for a loan. However, don't  More...

Terms of Use: The FHA allows you to use 31% of your income towards housing costs and 43% towards housing expenses and other long-tem debt. With a conventional loan, the qualifying ratio allows only 28% towards housing and 36% towards housing and other debt. How to calculate these ratios 1) MORTGAGE PAYMENT EXPENSE TO EFFECTIVE INCOME Add up the total mortgage payment (principal and interest, escrow deposits for taxes, hazard insurance, mortgage insurance premium, homeowners' dues, etc.). The  More...

Terms of Use: Except for the addition of an FHA mortgage insurance premium, FHA closing costs are similar to those of a conventional loan. The FHA requires a single, up-front mortgage insurance premium equal to 2.25% of the mortgage to be paid at closing (or 1.75% if you complete the HELP program). This initial premium may be partially refunded if the loan is paid in full during the first seven years of the loan term. After closing, you will then be responsible for an annual premium, paid monthl  More...

Terms of Use Table of Contents 1. Obtain information from several lenders 2. Obtain all important cost information 3. Obtain the best deal that you can 4. Remember: Shop, compare, negotiate 5. Fair lending is required by law 6. Credit problems? 7. Glossary 1. Obtain Information from Several Lenders Home loans are available from several types of lenders-- thrift institutions , commercial banks, mortgage companies, and credit unions. Different lenders may quote you different prices, so you shou  More...

Terms of Use: A mortgage is a loan that is used to buy a home. In return for the loan, you pay interest on the amount loaned. The lender also has first rights on your house in case you neglect to pay back the loan. A mortgage has three components: Amount (how many dollars you need to borrow) Interest Rate (the percentage rate you pay on the loan) Term (how long it will take to pay off the loan, generally 15 or 30 years) All of these components impact how much your mortgage payment will be  More...

Terms of Use Credit reports contain a wealth of information about your credit history. Consumers now can get a free copy of their credit report. It's important to review your credit report at least annually to ensure it is accurate and that you have not become a victim of identity fraud. A study by U.S. Public Interest Research Group found that one in four credit reports contains errors serious enough to cause consumers to be denied credit, a loan, an apartment or or even a job. Some of   More...

Terms of Use There are two primary types of mortgages: fixed and adjustable. Fixed-Rate Mortgage This is the plain-vanilla loan that most people think of when considering a mortgage. The fixed rate mortgage is an extremely stable choice. With this type of mortgage you pay a certain interest rate over the life of the mortgage. You are protected from rising interest rates, and it makes budgeting for the future very easy. With a fixed-rate mortgage, your monthly payment will remain the sam  More...

Terms of Use Buying a home doesn't have to be an overwhelming experience. Below are some general guidelines to consider when finding a home that's right for you: Do your homework first . Evaluate your tastes, lifestyle, the school district, and preferred commuting distance. Then do a lot of research about the neighborhoods you are considering. Read local papers. Walk and drive around. Determine how much you can afford to spend on your home. As a general rule of thumb, your mortgage  More...

Terms of Use Buying a home is a big decision! By considering the items below, you can help ensure that you make the best decision possible: Determine what you need from your home From its location and schools to the number of bedrooms and square footage, create a prioritized checklist of what is important to you. This checklist should be shared with your real estate agent and used to evaluate homes when viewing them. Your focus here is to make sure that the home is right for you. The eva  More...

Terms of Use: The annual percentage rate (APR) is an interest rate that is different from the rate stated on the loan and is commonly used to compare loan programs from different lenders. The Federal Truth in Lending law requires financial institutions to disclose the APR when they advertise a rate. Typically the APR is found next to the rate in the ad. The APR is designed to measure the true cost of a loan, and was intended to create a level playing field for lenders by preventing lenders  More...