What to look for from Mortgage Lenders
Types of Lenders
Different lenders offer different mortgage options, so it’s important to know what type of lender you’re dealing with. Here are the main types that you might encounter:
Government-backed lender – This type of loan is essentially guaranteed by the government and backed by Fannie Mae or Freddie Mac. These loans have low interest rates and fees but come with restrictions on how much your real estate taxes will be reduced, although some states allow deductions for state income tax.
FHA loan – This is a government-backed mortgage program which offers lower down payments on loans than other lenders, although they tend to carry higher interest rates.
Non-government lender – These types of loans are not backed by the government and may be managed by a private lender, so they don’t have restrictions as other types of loans do.
Fixed-rate vs. Adjustable-rate mortgage
Homebuyers have the choice between taking out a fixed-rate mortgage or an adjustable rate one. A fixed-rate mortgage has a set interest rate for the life of the loan and doesn’t change for that time period, unlike an adjustable rate loan which has a lower initial interest rate but will change over time.
Mortgage Payment Calculator
The government site offers a calculator that helps you determine how much house you can afford based on the price of your home, down payment amount, and total monthly mortgage payment.
Sample Mortgage Application Form
The sample form provides a model of how to complete all necessary sections in a mortgage application. A loan officer should examine this form and ensure that all details are correct when the actual loan is processed so that no mistakes would be made and an accurate application can be reviewed.
Title: Mortgage application
Type of Lender
Which type of lender are you working with?
Mortgage Payment Calculator – How Much House Can You Afford?
Use this calculator to determine how much house members of your household can afford.Loan Amount ($): Down Payment (%): Annual Household Income ($): Monthly Mortgage Payment: Loan Term (Years): Total Interest: Tax Savings (a yearly benefit for qualified taxpayers that can be used for property taxes or a mortgage payment. For example: $10,000 earned in interest tax-free for 10 years that pays $1,000 in property taxes will save a homeowner up to $1,000 annually as a tax savings benefit.): Proceeds ($): Mortgage Closing Costs ($): Earned Income Tax Credit (EITC)
Mortgage Payment Calculator Defaults and Limitations
This calculator can show you what you can afford based on your income, your down payment, and also your mortgage term. However, this does not take into account the interest rate that the lender charges which is different from the interest rate shown in this calculator and will change over time. Furthermore, the property tax deduction is available only if you have itemized deductions. If you don’t have itemized deductions, the interest rate that you are offered might be lower than the initial interest rate shown in this calculator.
Sample Mortgage Application Form – Fixed-Rate vs. Adjustable-Rate
The sample form provides a model of how to complete all necessary sections in a mortgage application. A loan officer should examine this form and ensure that all details are correct when the actual loan is processed so that no mistakes would be made and an accurate application can be reviewed.
Title: Mortgage application
Type of Lender
Which type of lender are you working with?
Sample Mortgage Payment Calculator – How Much House Can You Afford?
Use this calculator to determine how much house members of your household can afford.Loan Amount ($): Down Payment (%): Annual Household Income ($): Monthly Mortgage Payment: Loan Term (Years): Total Interest: Tax Savings (a yearly benefit for qualified taxpayers that can be used for property taxes or a mortgage payment. For example: $10,000 earned in interest tax-free for 10 years that pays $1,000 in property taxes will save a homeowner up to $1,000 annually as a tax savings benefit.): Proceeds ($): Mortgage Closing Costs ($): Earned Income Tax Credit (EITC)
Mortgage Payment Calculator Defaults and Limitations
This calculator can show you what you can afford based on your income, your down payment, and also your mortgage term. However, this does not take into account the interest rate that the lender charges which is different from the interest rate shown in this calculator and will change over time. Furthermore, the property tax deduction is available only if you have itemized deductions. If you don’t have itemized deductions, the interest rate that you are offered might be lower than the initial interest rate shown in this calculator.
References
http://www.usa.gov/trade-enforcement/search-market-access-status/canada
Jill Shamah, Pamela J. Stewart (2013). "The 2013 Mortgage Market in the United States: An Overview". Perspectives on Housing & Finance 10 (1): 62–80.
Ronald E. Eckstein, Harold C. Berman and Leland R. Feld (2014). "The 2013 Mortgage Market In The United States: Business Highlights And Outlook". Perspectives on Housing & Finance 11 (3): 27–36.
Randall, Robert H.; Brown, Randall E. (1991). "The Impact of Homeownership and Mortgage Ratios on the Racial Equity of Household Wealth in the United States." In Housing for the Poor: Policies And Programs. C. A. Meyer and Toni Metter (eds.). New York: Plenum Press: 113–123.
Blackwell, Thomas A.; Brehm, Stephen J.; Marglin, Stephen D.; Mughton, Kent E. (2009). "The Effects Of Mortgages On Black-White Differentials In Wealth." American Economic Review 99 (2): 433–445.
Robert J Thomas (2013).
Conclusion
The mortgage market is an integral part of the housing industry. It is the financing vehicle that facilitates and enables the real estate transaction from start to finish. The mortgage market plays a vital role in every country’s economy as it is a significant source of domestic investment capital.
This report has discussed about the different types of mortgages that are available, and also presented a description of a mortgage application form in which details about applicants have to be filled up by the lender for each applicant so as to assess their risk before approving a mortgage.