The Prime Lending Rate – sometimes just called “Prime” – is the interest rate that banks charge each other for overnight loans. Some consumer rates – like ARMs – are set in relation to Prime. In the US, Prime is affected by the Federal...
As we show you in this video, an escrow account is an account, established by your lender, to set aside a portion of your monthly mortgage payment to cover annual charges for homeowner’s insurance mortgage insurance (if applicable), and property taxes....
Discount points allow you to lower your interest rate. While this video simplifies things to help you remember, “points” are essentially prepaid interest with each point equaling 1% of the total loan amount. Generally, for each point paid on a 30-year mortgage...
You’ll see some pictures in this video to help you remember later, but the first step in securing a loan is to complete a loan application. To do so, you’ll need the following information. Pay stubs for the past 2-3 months. W-2 forms for the past 2 years....
The original phrase “mort gage” translates as “death pledge”! But as this video explains, a mortgage is a loan obtained to purchase real estate. The “mortgage” itself is a lien – a legal claim on the home or property that secures the promise...
While this video simplifies things to help you remember, the loan to value ratio is the amount of money you borrow compared with the price or appraised value of the home you are purchasing. Each loan has a specific LTV limit. For example: With a 75% LTV loan on...
This video tells you about the most common types: Fixed Rate, ARM, Balloon and 2-Step. First, Fixed Rate Mortgages: Payments remain the same for the life of the loan generally 15 years or 30 years. Interest rates remain the same, so payments are predictable. A...
For both, as we show you in this video, compared with other options, with fixed rates, housing costs won’t be affected by interest rate changes and inflation. With A 30-Year Term: In the first 23 years of the loan more interest is paid off than principal...
The monthly mortgage payment mainly pays off principal and interest. But most lenders also include local real estate taxes homeowner’s insurance, and mortgage insurance, if applicable. If you are refinancing compare what is and isn’t included in your...
As you’ll see in the video, a lower interest rate allows you to borrow more money than a high rate with the some monthly payment. Interest rates can fluctuate as you shop for a loan so ask lenders if they offer a rate “lock-in” which guarantees a...
