The Beginner’s Mortgage Guide
August 20, 2008
What is the amortization? And how can I decrease this? Your amortization is the total length of time it will take you to pay off your mortgage. Often when you first get a mortgage it is amortized over 25 years. However, your amortization period will not stay constant because different borrowing terms at each renewal vary the amount of interest charged over your amortization period. The length of time to pay off your mortgage will be determined by the interest charged, the loan amount, payment amount and payment frequency.The mortgage rate stays the same for the whole term and the mortgage payments are consistent during the term of the mortgage. The mortgage rate varies with fluctuations in the bank prime rate. As a result, mortgage payments may vary during the term of the mortgage.
What is a jumbo mortgage? A mortgage larger than the maximum eligible for purchase by the two Federal agencies, Fannie Mae and Freddie Mac, currently all loans over $359,650.There is no fee on conventional mortgages as I receive their fees from the financial institutions.
Are there fees for your services? There is no fee on conventional mortgages as I receive their fees from the financial institutions. However in some circumstances lender/broker fees may apply.You may find links to all the major mortgage lenders or the best mortgage interest rates on the internet A home inspection prior to purchasing a home or condominium can bring peace of mind when you sign the sales contract. Knowing what to expect both inside and out will help you make an informed decision about the value of the home and the future upkeep.
What is the difference between an Open and Closed mortgage? Open mortgages can generally be paid off at any time without penalty. They are suited to homeowners who have some uncertainty in your lives, are planning to sell in the near future or those who want the flexibility to make large, lump-sum payments before the end of the term. Compared to open a closed mortgage offers little to no privileges in paying off your mortgage early. You can not pay off your mortgage without attracting prepayment penalties, from the lender.
What are prepayment options? Many lenders allow you to make a limp sum payment, usually 15-20% of the original principal balance each year. In addition, many lenders also include a ?double up your payment option or allow you to increase your payment up to 15% each year of the term. Some even offer a Skip-a-Payment option that allows you to skip a payment if you are having a tough time getting by. Each lender is different so we will go over these options when you are making your mortgage choice.With mortgages you pay a price for certainty.
Can I still obtain a mortgage if I have been bankrupt? Yes, but it depends on the circumstances surrounding your bankruptcy as to when you would be eligible and what products are available to you. All lenders have different policies so the best thing would to discuss your situation with me to determine which lenders will be the best for you. At the very least I can help you develop a plan to get you prepared for home ownership as soon as possible.No, if you transfer from one lender to another at your renewal date there will not be any penalties. If you switch before your maturity or renewal date there may be an IRD or 3 month interest penalty. It is important to consult with me to determine whether or not this will work for you. A new lender will often assist with incentives to lure you over to them.