Real Estate Article:  Mortgage Facts

When  you are buying a home and need to get a loan, you needs to know some basic facts about mortgages.  Without this information you may not get the exact loan you are looking for.

#1.  If your credit is good you should go with a fixed rate loan with some amount of down payment.  Sure you can get an adjustable rate loan.  Sure you can get a no down payment loan...or even one that is for more than your purchase price.  But if you stick with a traditional loan you will avoid the problems (escalating interest rates, balloon loans and owing more than the home is worth) than many homeowners are currently experiencing.

#2.  You need to understand what a "point" is.  Lenders will talk about how many points there are on a loan with a certain interest rate.  That sounds like "greek" to many buyers and they don't ask the right questions.  Then they wonder why the closing costs are so high!!!   When the closing costs are added on the their loan, they may not notice it at all.

A "point" is really a form of pre-paid interest.  The higher the points that are quoted, the lower the interest rate.  The lower the points that are quoted, the higher the interest rate.  But the points are paid at closing or rolled into the mortgage on some loans.  You have to make the proper comparisons in order to make informed decisions.

#3.  Don't be upset if I lender asks you for what seems like personal information (all sources of income, all of your debts and your social security number).  They need this basic information to make a decision on whether they make a loan on the home you want to buy.  They need the social security number so they can get a copy of your credit report to know if you are a good risk.  After the lender has looked over the information, they may ask you for other information.  All of this is very standard.  If anything seems unusual to you, please ask me about it.  

#4.  Self-employed buyers can get a loan, but it will most likely require more information from you.

Linda Grissette, GRI, e-PRO Certified

The Best Seller GMAC Real Estate, 3829 Veterans Memorial, St. Peters, MO 63376 

Licensed in the state of Missouri.

All content of this web site is copyright protected.  Our copyright will be legally defended.  Linking to our content is always acceptable.  Besides the copyright issues, if you copy this content to your website, it will hurt BOTH of our websites!  Don't do it! 

NOTICE:  E-mail addresses on this site are provided for the use of our clients and potential clients.  Because of this notice, the harvesting and transfer of these e-mail addresses is a violation of the Federal CAN-SPAM Act.  Violators will be reported.

Privacy Statement   Linda Grissette's policy is to never give out consumer information.  If you give her your contact information, it will not be given to anyone without your permission.

All information provided on properties is deemed to be reliable, but is not guaranteed.  Information on properties should be independently verified.