Monday, February 14, 2005

 Posted by Hello

Important Mortgage Loan Elements to Consider

Obtaining a mortgage loan is one of the biggest decisions you will make in your lifetime. You must make sure you make an educated and informed decision. It is important that you determine how much of a down payment you can afford, and find out all the costs involved in the loan. Knowing just the amount of the monthly payment or the interest rate is not enough. Ask for information about the loan amount, loan term, and type of loan so that you can make an informed decision.

The first major component of the loan is the Rate:

Ask your lender or broker for a list of its current mortgage interest rates and whether the rates being quoted are the lowest for that day or week. Ask whether the rate is fixed or adjustable. Keep in mind that when interest rates for adjustable, rate loans will generally go up over time,... so does the monthly payment. If the rate quoted is for an adjustable-rate loan, ask how and when your rate and loan payment can change, including whether your loan payment will be reduced when rates go down. Ask about the loan's annual percentage rate (APR). The APRtakes into account not only the interest rate but also points, broker fees, and certain other credit charges that you may be required to pay, expressed as a yearly rate.

More on Points and Fees in upcoming posts.......


Don Bethune


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