Articles From Experts
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Express Newsline Articles From Experts |
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Okay, you found the home of your dreams. Now, how are you going to finance it? Are all mortgages the same? Where do you shop for them? What's an ARM? What's a "conventional" loan? What are HUD and FHA? Can you get a "HUD Home"? What are the basic components of loan? This article gives insight into all such questions. How are you going to finance it? You can save yourself a lot of wheel spinning if you take a minute to figure out how much mortgage you can afford. The Department of Housing and Urban Development (HUD) suggests that a lender will want your monthly mortgage payment to total no more than 29% of your monthly gross income. But mortgage and payment terms must fit your budget. Where you shop and what you look for are critical issues not only for staying within your budget, but getting the most "brick for the buck". Where to shop You might start by looking for a mortgage at the bank where you have your checking or savings account. But don't limit yourself. A wide variety of institutions make home mortgage loans, including savings and loan associations, commercial banks, mutual savings banks, and mortgage companies. One-way to find the creditor with the most attractively priced loan is to look in your local newspaper; check to see if it publishes a shoppers guide to mortgage credit. These shoppers’ guides are available in many localities and can be used to identify the lenders with low rates. But, basically, the way to find the loan with the most attractive terms is to shop around. And like car financing, mortgage financing on the Internet has become a viable alternative. HSH Associates is the nation's largest publisher of mortgage and consumer loan information. They are an objective, independent source of information offering daily mortgage statistics, weekly reports, market trend reports for commentary, news, and forecasts.Lenders and brokers may offer different prices for the same loan to different consumers, even if consumers have the same loan qualifications. These different prices may result because loan officers and brokers often are allowed to keep some or all of the difference between the lowest available price and any higher price that the consumer agrees to pay. This compensation arrangement helps explain why it is important for consumers to ask questions about costs and negotiate for the best deal.
Components of the Loan You should have in mind some of the mortgage loan components or, in other words, things to look for in a mortgage loan. For example, what types of loans are available from a given institution? What interest rate is offered? Are their points involved and how many? What is the length of the loan? Does the lender make privately or federally insured or guaranteed loans? Federal or Conventional-- Some lenders offer mortgage loans backed by a federal agency such as the Federal Housing Administration (FHA loans) or the Department of Veterans Affairs (VA loans). Loans that are not government-insured are called "conventional" mortgages. Insured mortgages may be more attractive than conventional mortgages in some ways-- such as lower down payment requirements. But they may be more restrictive in other ways; for example, they may be available only for certain kinds of homes, or for properties whose value is below a specified price.
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