About Mortgage Loan
“Qualifying” for a mortgage is the first step in the loan approval process. Qualifying means just how much money you may finance in order to purchase your new home.
Real estate loans are generally available from 15 to 30 year periods, the interest rate, the principal amount of the mortgage and the length of the loan will determine the amount of your monthly payments.
A variety of loan programs
- VA & veterans & active military 100% financing
- FHA & low down payment loans
- FHA/203k & for rehab property
- VHDA & 1st time home buyers
- CONVENTIONAL & minimum is 5% down for qualified buyers
- INVESTOR LOANS & 10% down payment
- No income verification & no ratio loans & 20% or more down payment
Interest Rate, ‘Points’ & other Fees
Often the price of a home mortgage loan is stated in terms of an interest rate, points, and or other fees. A points is a fee that equals 1% of the loan amount. Points are usually paid to the lender at settlement, often you can pay fewer points in exchange for a higher interest rate or more points for a lower rate. Points can be negotiated in the contract for the seller to pay as part of your closing cost.
Closing costs include expenses such as the loan origination fee, loan discount points, advance payment of interest, credit report fee, appraisal fee, title search and title insurance fee, document preparation fees, recording and transfer fees, survey, flood certification fee, underwriting fee.
You may wish to ask for an estimate of fees and closing costs from your lender so you know up front how much of these costs shall be paid by seller in negotiating your contract.