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					Mortgage Basics

If you are looking for the mortgage that best suits your needs, consider yourself not alone. There are millions of others just like you
searching for the best mortgage rates every year. Many people dream of owning a home but due to high costs, a mortgage is usually
required to make that dream a reality. It is important to learn mortgage basics and not only know, but also understand your options.
Surprisingly, not everyone puts forth the time and effort necessary in researching these options. This is important since mortgage rates vary
from company to company. It is in your best interest to get as many quotes as possible so you can make a qualified decision. You can find
home loans through banks, credit unions, savings and loan, insurance companies and mortgage bankers.

A mortgage is basically using your property as collateral and giving it to a lender to hold as security for your payment towards the debt. If
you don’t make your payments, the lender can take your home from you to cover them. The loan principal is the actual amount you borrow
to purchase a home. The bank charges you an amount, this is the interest. They base their interest rate on recent economic indicators. If
you do a good amount of research and educate yourself on the different types of loans available, this will be very helpful in the decision
making process. Be aware of certain lenders, who will try to take advantage of innocent and unprepared consumers.

With an adjustable-rate mortgage (ARM) you will receive a low interest rate early on and pay less for short-term ownership of your property.
Your other option is a fixed-rate mortgage (FRM) that maintains a constant higher rate. If you think you will stay in your home for over five
years then the predictable loan, a fixed-rate mortgage, might be your best choice. As opposed to going with the ARM and paying a lower
interest rate initially, then having it adjust to something much higher. Since loans are usually for high amounts, they can be anywhere from
fifteen to thirty years. The amount of time for the loan is called the term. Finally, your loan goes through the process of amortization. This is
when your total is divided equally into payments over the life of your loan. Your payments will typically go toward paying the interest in the
loan early on, and towards principal later in the term of the loan.

The Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA) are set in place to protect against any discrimination towards
consumers. This applies to mortgages for refinancing, purchases or home improvements. Under the ECOA you have many rights. You will
not be denied a credit transaction based upon your race, ethnicity, religion, national origin, sex, marital status, age or income received from
any type of public assistance program. Under the FHA you will not be discriminated during any residential real-estate transaction. This
applies to loans for purchasing or repairing property. Selling, brokering or the appraisal toward residential real estate discrimination is
prohibited, also transactions for selling or renting property. It also prohibits any discrimination towards race, color, national origin, sex,
religion, household status or handicaps.


Knowing the basics of mortgage means understanding certain lenders and their “dos and don’ts.” Lenders need to consider public
assistance the same as they would any other source of income. Also, taking into consideration the income received from Social Security,
part-time employment, pensions and annuities. Alimony and child support also need to be counted as income. In the event of a co-signer, it
is a good idea to accept someone besides your spouse. If you own the property together, he or she might be asked to sign documentation
allowing the property to be mortgaged.


Lenders cannot use your race, national origin or sex against you while considering your application. They cannot impose different terms or
conditions, like a higher interest rate or larger down payment based up them either. Yes it is voluntary when filling out the application to
disclose this information, but this helps federal agencies to better enforce their anti-discrimination laws. You cannot be discouraged from
applying for a mortgage based upon those factors. Lenders do not have the right to ask you about any future plans of a family, but can
question any expenses regarding current dependents.


After you have figured out what mortgage is right for you, make the comparison between lenders. Get a sense of the market through the
real estate sections of newspapers and use the Internet to search mortgage websites. Keep in mind private sources for your mortgage.
Parents, relatives, friends, possibly the seller of the house you are interested in. This is the most cost effective mortgage, borrowing from
others. This is becoming quite popular with investors who turn their real estate into high-appreciation places to put their money.

				
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Description: This is an example of best mortgage rates. This document is useful for studying best mortgage rates.