Sample ARM Mortgage Comparison

Let’s say you are comparing two adjustable rate mortgages on a $200,000 loan. One is an ARM where the interest rate is fixed for 1 year and may change every year after that, and the other loan is an ARM which is fixed for 5 years (often written as 5/1). Let’s say you think you’ll live in […]

Private Mortgage Insurance (PMI)

For decades, standard practice had bankers requiring a 20% downpayment for mortgage loans. Private Mortgage Insurance (PMI) was created as a form of insurance for those borrowers who could not come up with the 20% down. PMI usually allows a borrower to borrow up to 90% of the loan but take out an insurance policy […]

Piggyback Loans vs Private Mortgage Insurance PMI

For decades, standard practice had bankers requiring a 20% downpayment for mortgage loans. Private Mortgage Insurance (PMI) was then created as a form of insurance for those borrowers who could not come up with the 20% down. PMI usually allows a borrower to borrow up to 90% of the loan but take out an insurance […]

What is a Neg Am Loan? Amortization vs. Negative Amorization

In the past, home buyers scrambled to get into as much home as they could afford in some of the hot real estate areas, just to participate in the heady 20-30% gains. To maximize their investment dollars, they took on negative amortization loans and kept buying. Now that the real estate market has, ‘ahem’, softened, […]

Mortgage Insurance Back in Vogue

If you have less than a 20% downpayment to put on a loan, mortgage loan officers have been quick to suggest the 2-loan approach: An 80% loan at standard rates and a piggyback loan for the remaining amount. The second loan is usually a home equity loan, but with today’s rising rates, can easily reach […]

Jumbo Loans: Big Price Tag? Time for Jumbo Loans

If you are fortunate to have a well paying job or business, your income will open you up to a large loan on a property. Jumbo loans are loans that Fannie Mae (the largest loan purchaser in the U.S.) does not buy because the loan value exceeds the conforming loan limit set by the government […]

First Home Buyer Tax Credit

If you haven’t owned a home in the last three years, then the IRS considers you a first time home buyer. If you are in this category and are considering a property purchase, then get moving! You have until April 30 to have an accepted purchase contract to receive the $8000 (or if your home […]

Fixed Rate Mortgages

A Fixed Rate mortgage is a great choice when you plan to own a home for more than 5 years. A fixed rate mortgage means that your interest rate and your monthly payment is the same every month for the life of the loan. If interest rates are low and you plan on owning the […]

FHA Loans: Need a Lower Down Payment? Check out FHA Loans

If you don’t have a 20% down payment for a loan, an FHA loan may be for you. FHA stands for “Federal Housing Administration.” If you’ve guessed that the government is involved in an FHA loan, you are right. The federal government pays the lender if a homeowner using an FHA loan goes to foreclosure. […]

Who is Fannie Mae and Why Should I care?

Many Americans had little idea who Fannie Mae (Federal National Mortgage Association) was prior to 2006, except that they had fairly good bond rates that were considered “safe” investments. Now that the Credit Crisis has uncovered all sorts of facts on how the mortgage market works, most of us should be at least a little […]