If you’re like most buyers, a home is the most expensive purchase you’ll ever make, and you’ll probably need some form of financing.
There are many lending institutions that offer a variety of mortgage products. Financing options and rates can vary widely, so it is important to do your research and shop around to ensure you get the mortgage that best meets your needs at the best price.
I would be happy to refer you to some very good mortgage contacts I have in Rosemont, or to help you in any other way I can to secure the best possible rate for your home purchase.
Use the mortgage calculator below to assist you in making some decisions around financing your new home. Below that, you’ll find some common mortgage vocab/definitions.
Mortgage Payment Calculator
This calculator will help you determine what your mortgage payments will be based on purchase price, interest rate and mortgage term, as well as other factors. The amortization table shows what the interest and principal payments will be over the term of the mortgage.
Mortgage Qualification Calculator
This calculator will help you determine how much money you qualify to borrow. The results are informal. You will be subject to a credit approval from your financial institution taking into consideration existing debt load, amount of down payment, income and other variables.
Mortgage Qualification CalculatorAffordability Calculator
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A mortgage is a loan that is secured by the value of your home or other real estate. Mortgages may be offered at a fixed interest rate for the life of the loan, or at a rate that may change over the life of the loan. Repayment terms range from 15 to 30 years, depending on the type of loan.
Some terms that you might hear in discussing mortgages include:
Amortization: The process of paying the principal and interest on a loan through regularly scheduled installments.
Annual Percentage Rate (APR): The cost of the loan expressed as a yearly rate on the balance of the loan.
Application fee: The fee that a lender charges to process a loan application
Balloon loan: A mortgage in which monthly installments are not large enough to repay the loan by the end of the term. As a result, the final payment due is the lump sum of the remaining principle.
Closing costs: Expenses incidental to the sale of real estate, including loan, title and appraisal fees
Convertible adjustable-rate mortgage: A mortgage that starts as an adjustable-rate loan but allows the borrower to change it to a fixed-rate mortgage during a specified period of time Equal Credit Opportunity Act: A federal law that prohibits a lender or other creditor from refusing to grant credit based on the applicant’s sex, marital status, race, religion, national origin or age.
Fannie Mae: The Federal National Mortgage Association (FNMA)
Federal Housing Administration (FHA): This government agency operates a variety of home-loan programs.
Fixed-rate mortgage: A home loan with an interest rate that will remain constant for the term of the loan.
Freddie Mac: The Federal Home Loan Mortgage Corporation
Housing expense ratio: The percentage of gross monthly income devoted to housing costs
Index: Financial tables used by lenders to calculate interest rates on adjustable mortgages and on Treasury bills
Interest rate: The sum, expressed as a percentage, charged for a loan.
Interest rate caps: A limit on the amount that can be charged to the monthly payment of an adjustable-rate mortgage during an adjustment period.
Interest rate ceiling: The highest interest a lender can charge for an adjustable-rate mortgage
Interest-only loan: A mortgage on which the borrow pays only the interest that accrues on the loan balance each month, and so the outstanding balance does not decline with each payment
Late charge: A fee imposed on a borrower when the borrower does not make a payment on time
Mortgage acceleration clause: A clause that allows the lender to demand that the entire balance of the loan be repaid in a lump sum, usually if the house is sold or refinancing, the title changes hands or the borrower defaults
Origination fee: A fee charged for processing a loan; also called “points” PITI (Principal, Interest, Taxes and Insurance): The figure is designed to represent the borrows actual monthly mortgage-related expenses
PMI (Private Mortgage Insurance): A special type of loan insurance that is often required if the borrower’s down payment is less than 20 percent of the home’s purchase price
Qualifying ratios: The formulas that lenders use to determine how much a potential buyer can borrow
Rate lock: An option to set an interest rate during the loan application process
Total expense ratio: The percentage of monthly debt obligations relative to gross monthly income
Treasury Index: An index used to determine interest rate changes for adjustable rate mortgages