Financing Basics

Understanding the pros and cons of the various types of loans available will help in finding the mortgage that is right for you.

Not all lenders offer the same financing programs. Different lenders (banks, mortgage brokers, credit unions and mortgage companies) offer different types of products. Learn more about the different types of mortgages HERE or HERE.
Your lender will require a certified appraisal to determine the mortgage amount. Currently, appraisers are selected at random by an automated system; the lender cannot choose or express a preference for a particular appraiser for you. It is important to note that the REALTORS® involved in the transaction may provide the appraiser with comparables and a list of extraordinary features or repairs that distinguish the property prior to or at the time of the actual visit by the appraiser. Once the appraisal is completed, it is hard to appeal.
In today’s market, a down payment of 10 – 20% will make it easier to qualify for a mortgage. If you haven’t saved that amount of cash, you may still find loan programs that don’t require as much money down. But keep in mind that the less you put down, the higher your interest rate is likely to be. Regardless of the loan program you choose, however, you must have good credit, and you must be able to document your income and assets to qualify for a mortgage.
Buyers with less than a 20% down payment are normally required to pay for private mortgage insurance (PMI). PMI plays an important role in the mortgage industry by protecting a lender against loss if a borrower defaults on a loan. This provides a level of extra security allowing lenders to offer mortgages to borrowers with less cash. PMI makes it possible for you to buy a home with as little as a 3 – 5 % down payment. Borrowers typically pay a monthly PMI premium included in the mortgage payment.
Mortgage interest rates are still at historically low levels; however, the lowest rates will go to those borrowers with FICO credit scores above 760.
Use a standardized mortgage calculator online to determine your estimated monthly payments. To find mortgage calculators and other tools go to: