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Basic
Loan Types for Home Purchases or Refinances Basic
Loan Types for Home Purchases or Refinances. Although
there are many different types of loans out there in the market, there are
some basic issues you need to be aware of and be certain to get all the
information prior to the closing if at all possible. Interest
rates, points, and fee- The interest rate and its terms are either fixed or
adjustable. You will need to know the terms of the loan, including whether
there are points (normally a percentage of the loan amount, payable to
the lender) to be paid and a schedule of other fee, if any, payable to the
lender. Having this information in advance will assist you in determining how
much up front fees to expect, plus the monthly payment over the life of the
loan. Be aware that you will also have real estate taxes and homeowners
insurance, also normally due on a monthly basis. When your anticipated
monthly payment is given to you by your loan officer be sure that the taxes
and insurance are added in to that figure so you will have a true picture of
you obligation. If
the rate of interest is adjustable there will be a rate adjustment or a
“balloon payment” on a set date. With an adjustable rate the interest rate
may be fixed for a certain period of time, then it will adjust, either up or
down, depending on the market at the time. In the event that the interest
rate adjusts up and you are not able to make the payment at the higher rate,
you may need another loan, or refinance, which means more fees, points,
closing costs, etc. Be
aware of the potential of a prepayment issue in the loan documents, if there
is one and you decide to pay off the loan ahead of time you may be
responsible for additional fees at that time. This is an item you should
discuss with your lender before you proceed with the loan in the event you
should move before the loan is fully paid through monthly payments. Some of
these can be rather costly, however, a reputable lender will discuss all of
this with you and answer any questions you may have. Ask your Realtor,
Attorney, or your local Title Company for a recommendation to a reputable
lender if you are not sure who to call. Any
questions can be directed to Benchmark Title at 618-239-3750. Please feel
free to call or email:
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Dates to Remember Be the first in your
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clients a free CD at closing containing copies of their closing documents. Give me my policy! Did you know that
lenders and home buyers now receive their title policies at the closing
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Contact us today for a quote! Why wait? You can place your
next title order now by clicking here. |
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