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ADJUSTABLE RATE MORTGAGES - THE BASICS

Posted by Christopher Maxner on April 29, 2019 in  Mortgage Info  Resources
An adjustable rate mortgage (ARM) has an interest rate that fluctuates periodically. This is in contrast to a fixed rate mortgage, which always has the same interest rate. Every ARM has basic components: An index A margin Adjustment Period An interest rate cap An initial interest rate THE INDEX An ARM’s interest rate is tied to one of many economic indices, some examples of which are the 1-year constant maturity Treasury security, the Cost of Funds Index, or the London Interbank Offered Rate. Different indi... read more
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ADJUSTABLE RATE MORTGAGES - THE PROS & CONS

Posted by Christopher Maxner on April 29, 2019 in  Mortgage Info  Resources
Now that you know what an ARM is and how it works, you may be wondering what the advantages and disadvantages are. So let’s explore that issue. Offering adjustable rates allows lenders to transfer part of the interest rate risk from themselves to the borrower. If you get a fixed rate mortgage and the interest rate then goes up, it costs the lender money. However, if you have an adjustable rate mortgage, as the interest rate goes up, so does your payment, thus compensating the lender. Adjustable rate mortgages... read more
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CLOSING COSTS WHEN BUYING OR REFINANCING A HOME

Posted by Christopher Maxner on April 29, 2019 in  Mortgage Info  Resources
This is a detailed summary of costs you may have to pay when you buy or refinance your home. They are listed in the order that they should appear on a Good Faith Estimate you obtain from a mortgage lender. There are two broad categories of closing costs. Non-recurring closing costs are items that are paid once and you never pay again. Recurring closing costs are items you pay time and again over the course of home ownership, such as property taxes and homeowner’s insurance. Some of the items that appear here ... read more
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DOCUMENTING YOUR ASSETS - VERIFYING YOUR DOWN PAYMENT

Posted by Christopher Maxner on April 29, 2019 in  Mortgage Info  Resources
When buying a home, it is not enough to just come up with the money. With the exception of no asset verification loans, lenders want to verify where the money for your new home will be coming from. If you can document that the funds are coming from your personal savings, the lender is more confident of your strength as a borrower. In addition, if you can verify that you have additional assets that are not needed for the down payment, it is important to document those, too. Additional assets are reserves you can dra... read more
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FICO® SCORE - A BRIEF EXPLANATION

Posted by Christopher Maxner on April 29, 2019 in  Mortgage Info  Resources
When you apply for a mortgage loan, you expect your lender to pull a credit report and look at whether you’ve made your payments on time. What you may not expect is that they seem to be more interested in your FICO® score. “What’s a FICO® score?” is a common reaction. Each time your credit report is pulled, it is run through a computer program with a built-in scorecard. Points are awarded or deducted based on certain items such as how long you have had credit cards, whether you make ... read more
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