Home Mortgage





Information on home mortgage loans, for prime and sub-prime borrowers.

To qualify as prime borrower:

Credit score of 680 or higher, some lenders will go down to 620.

No bankrupt or foreclosure in the last 24 months, some lenders will go up to 36 months.

To qualify as sub-prime borrower:

Credit score of 585 and up, some lenders will go down to 530.

Bankrupt is OK, however it must be closed.

No foreclosure in the last 12 months

That’s the difference between prime and sub-prime, go to What most Mortgage Lenders look for in a loan request for other requirements.

Loan Programs: Below are the most common programs available.

Fixed Rate:

Is where the interest and principal never change for the life of the loan. The loan payment is structured to payoff the loan at the end of the term.

Fixed rate are available 30 years, 20 years, 15 years and 10 years terms.

For the best, safe and stable mortgage program the Fixed rate is what you want.

Adjustable Rate (AKA ARM):

In general the starter rate is lower then a fix rate however, the interest rate changes at a specified intervals depending on changing market conditions. Rate can go up or down in turn making your payment go up or down.

Some people make a mistake by getting an Adjustable ARM , just to be able to buy a more expensive home, then when the rate goes up they have a hard time making their payments some lose their homes.

Common ARM programs:

2/28 ARM - 2 year Fix / 28 year adjustable loan rate can go up or down.

3/27 Arm - 3 year Fix / 27 year adjustable loan rate can go up or down.

Balloon:

The payment is bast on 30 year loan However, there will be remainder principal loan balance that would have to be paid off or refinance.

Interest Only:

Best way to put it is "paying rent on your home" none of the principal is paid.

Most people should go with the Fix Rate loan;

Unless you plan on selling your home within 5 years or less, know that you will be earning more money or you just want to gamble with your home.

Prepay Penalty:

Paying off or refinancing your loan early. Make sure you know how many years, there is a prepay penalty if any on your mortgage loan.

Don't fall in Pre-approved credit line trap, Understanding your credit report and Build your credit for more useful information.


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