Blog Archives

What is a FICO score?


FICO® Score – a Brief Explanation 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 … Continue reading

What do banks research when investigating my finances?


Documenting Your Assets – Verifying Your Down Payment 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 … Continue reading

What are the closing costs going to be?


Closing Costs When Buying or Refinancing a Home 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 … Continue reading

What are the basics about adjustable rate mortgages?


Adjustable Rate Mortgages – The Basics 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 … Continue reading

Should I consider an adjustable rate mortgage?


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 … Continue reading

Are there “tricks” to make financing easier or more affordable?


Creative financing: You’ve heard of it, and, as a seller, the idea sounds pretty attractive. But, do you know everything you need to know about carrying back a second; essentially, about becoming a lender? You better know the same things that financial institutions know – you better know about lender’s title insurance. It’s time to sell your $150,000 home, a home that you have owned for fifteen years, a home in which you have substantial equity. The loan terms call … Continue reading