Joe Flanner - USA Mortgage

A mortgage lender is a company that markets other investors’ products, similar to independent insurance agents and travel agents, and they offer mortgage products and services to consumers from several investors. The advantage of this is that a lender can offer low rates because they can utilize the investor offering the best prices that particular day.

At the time you are shopping for a property, the seller and/or your real estate agent will be able to provide the current property taxes for that property. Every property you look at will have different property taxes due to the assessed value and county where it is located. Tax history records are also available on most property listings online, and can also be looked up on the county’s website.

Yes, you can cancel mortgage insurance on a conventional loan - and that premium will be removed from your monthly mortgage payment without refinancing. You are able to do this after you have paid down your mortgage principal enough to have 20% equity in your home (otherwise known as your loan-to-value ratio reaching 80%). You can request this removal with your mortgage servicer when you reach this point. However, if you do not make this request with your servicer when your LTV reaches 80%, the mortgage insurance will automatically fall off without extra effort from you when your LTV reaches 78%. Your mortgage servicer may have other requirements for mortgage insurance cancellation such as not missing a payment in the last 12 months. Reach out to your servicer for this, and any other requirements you may need to meet before cancellation can occur.

This is because the APR includes some of the closing costs associated with acquiring the terms of your loan. The APR is the cost of credit expressed as an annual rate. You may be paying “points” and will have other prepaid interest costs or fees. These other points and fees are included in the APR to give an “adjusted” percentage rate to more easily compare loans and lenders.

Mortgage insurance was created to allow consumers to purchase a home without a large down payment. Many homebuyers do not have savings or reserves that are equal to 20% of the value of the home they wish to purchase. Borrowers who have at least 20% equity in their homes default less often than borrowers with less equity. Lenders need protection against decreases in housing values and to assure that they could sell a property quickly, still recouping their loan amount, in case of a foreclosure on a property. Mortgage insurance assumes the lender’s risk on the loan amount above 80% of the home value. This insurance has a cost associated with it, which is your monthly PMI or MI payment that is included in your mortgage payment if your loan requires PMI or MI. Mortgage insurance has served its purpose by providing more people the ability to purchase homes with a lesser down payment than 20%, and decreasing risk to lenders in those transactions.

An interest rate lock guarantees your rate. After you are under contract for a home purchase and your official loan program is determined, your mortgage loan originator will “lock-in” your interest rate. This means that your rate has been confirmed and will no longer be subject to market changes that could increase your rate. This prevents your rate from rising to the point where it could price you out of being able to afford or qualify for the home you have under contract. Typical rate locks are 30 days in length, but if for some reason you have a longer closing window on your purchase contract, your mortgage loan originator can choose a 45 to 60 day lock period for your loan, depending on your circumstances.

The Loan Estimate is a disclosure, required by law, that every lender must provide to the borrower within 3 business days of a completed application. It is a detailed initial estimate of your projected closing costs, itemizing things like mortgage insurance, title insurance, recording fees, the finance charge, annual percentage rate (APR), number of payments you will make and an estimate of what your monthly payment will look like. These numbers are not final. Official and final figures will be collected and adjusted, then sent to you again before closing day.

FIXED-RATE MORTGAGES have an interest rate that never changes over the term of the loan. With a fixed-rate loan, the principal and interest portion of your monthly mortgage payment stay the same. Although, real estate taxes and homeowners insurance costs can rise from year to year, they would be the only variable that could change your monthly payment. ADJUSTABLE RATE MORTGAGES typically have a lower interest rate during the initial introductory period (commonly 5 or 7 years) than a fixed-rate mortgage would (depending on current market conditions). After the introductory period of an adjustable rate mortgage is over, the interest rate is allowed to rise annually every year after that, determined by the climate of the market.