Components of Adjustable Rate Mortgages
To understand an ARM, you must have a working knowledge of its components. Those components are: Index: A financial indicator that rises and falls, based primarily on economic fluctuations. It is usually an indicator and is therefore the basis of all future interest adjustments on the loan. Mortgage lenders currently use a variety of indexes. Margin: A […]
Balloon Mortgages
A balloon mortgage has an interest rate that is fixed for an initial amount of time. At the end of the term, the remaining principal balance is due. At this time, the borrower has a choice to either refinance or pay off the remaining balance. There are no penalties to paying off a balloon mortgage […]
HARP 2.0 Refinance
HARP 2.0 is a refinance option for homeowners that are “underwater,” meaning they owe more on their home than their home is worth. In order to be eligible for the HARP 2.0 refinance program, you must meet certain criteria. Firstly, you must not have refinanced through the original HARP program. You need to be current […]
Hybrid ARMs (3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM)
Hybrid ARM mortgages, also called fixed-period ARMs, combine features of both fixed-rate and adjustable-rate mortgages. A hybrid loan starts out with an interest rate that is fixed for a period of years (usually 3, 5, 7 or 10). Then, the loan converts to an ARM for a set number of years. An example would be […]
Loan Programs FHA Loans
MORTGAGE BASICS FHA Loans FHA home loans are mortgage loans that are insured against default by the Federal Housing Administration (FHA). FHA loans are available for single family and multifamily homes. These home loans allow banks to continuously issue loans without much risk or capital requirements. The FHA doesn’t issue loans or set interest rates, […]
Could Obtaining Private Mortgage Insurance (PMI) Help Me Qualify for a Larger Loan?
Yes, it will help you obtain a larger loan, here’s why. Let’s say that you are a family with $42,000 Annual Gross Income and monthly revolving debts of $800 for car payment and credit cards, and you have $10,000 for your down payment and closing costs on a 7%-interest mortgage. Without PMI the maximum price […]
Cancellation of Private Mortgage Insurance (PMI)
The Homeowners Protection Act of 1998 established rules for automatic termination and borrower cancellation of Private Mortgage Insurance (PMI) for home mortgages. These protections apply to certain home mortgages signed on or after July 29, 1999 for the home purchase, initial construction, or refinance of a single-family home. It does not apply to government-insured FHA […]
PMI Companies
Amerin Guaranty Corporation303 East Wacker Drive, Suite 900Chicago, IL 60601Tel: 800-257-7643Fax: 312-540-0564 PMI Mortgage Insurance Company601 Mongomery StreetSan Francisco, CA 94111Tel: 800-288-1970Fax: 415-291-6175 Commonwealth Mortgage Assurance Company1601 Market StreetPhiladelphia, PA 19103-2197Tel: 800-523-1988Fax: 215-496-0346 Republic Mortgage Insurance Co.P.O. Box 2514Winston-Salem, NC 27102-9954Tel: 800-999-7642Fax: 919-661-0049 G.E. Capital Mortgage Insurance CorporationP.O. Box 177800Raleigh, NC 27615Tel: 800-334-9270Fax: 919-846-4260 Triad […]
How Does Private Mortgage Insurance (PMI) Work?
PMI companies write insurance policies to protect approximately the top 20% of the mortgage against default. This depends on the lender’s and investor’s requirements, the loan-to-value ratio, and the type of loan program involved. Should a default occur the lender will sell the property to liquidate the debt, and is reimbursed by the PMI company […]
What is Private Mortgage Insurance (PMI)?
On a conventional mortgage, when your down payment is less than 20% of the purchase price of the home mortgage lenders usually require you get Private Mortgage Insurance (PMI) to protect them in case you default on your mortgage. Sometimes you may need to pay up to 1-year’s worth of PMI premiums at closing which […]