CENTURY 21 SCVA Country Club 1323 Jacklin Road Milpitas CA. 95035

Direct: 408 262 4848 Ext: 359

Mobile: 408 757 8909

MORTGAGES

A mortgage is a financial claim against your real estate. You give a mortgage to a lending institution along with a bond or note, which is a personal promise to repay. In return the lender gives you money.

Price of a Mortgage

In addition to the quoted interest rate, lenders may change a variety of upfront fees, such as:

Discount Points

Origination fees

Inspection fees

Underwriting fees

Documment preparation Fees

Discount points are the largest fees that a lender may charge, discount points changes the interest rates that you pay. The real rate that you pay is called the effective interest rate.

The Annual Percentage Rate(APR) is the effective interest rate for the loan that is repaid over the full term. After you apply for a loan, " The Truth Of Lending Law" requires that the lender tell you the APR within three(3) business days.

Your Monthly Mortgage includes:

Principal

Interest

Home Owners Insurance

Mortgage Insurance

Getting a Mortgage Involves:

You(The Borrower)

Realtor(Broker)

Mortgage Broker

Lender

Credit Bureau

Borrower Employers

Creditors

Title Insurance

Appraiser

After you obtain a mortgage

Some of the items at Settlememt Closing

You obtain a deed for your purchase

Deed-of-Trust or Mortgage

Mortgage Insurance Certificate

Title Insurnace Policy

Homeowners Insurnace

Affidavits of Agreements

Getting the right loan can determine whether or not you can afford to purchase the property you desire. The first step in getting a loan is to find out what is available in the market.

Sources are:

Mutual Savings and Savings and Loan Association

Mortgage Companies

Government Agencies(FHA and VA) loans

Those are few welknown sources

Loan Types

Fixed Rate Morgage

The standard loan covers 80% of the property cost, or the appraised value, whichever is lower. Some lenders charge discount points as a condition for making the loan, each point charged requires the buyer to pay the amount equal to 1% of the loan amount in cash at closing Each monthly payment of fixed rate loan includes interest on the outstanding principal plus repayment of part of the principal borrowed, this results in that the loan will be paid off at the end of the mortgage term. The gradual reduction in the principal after each monthly payment is called the amortization, each payment of pricipal and interest payment is equal over the life of the loan. It is possible to get mortgage loan for more than 80% of cost if the loan is insured. The FHA insure loans for up to 95% of value. There are limits on the dollar amounts you can borrow. VA loans are guaranteed by the government are available as a benefit to qualified veterans Loans that are not insured by FHA or not guaranteed by VA are called Conventional Loans. Private Mortgage Insurance(PMI) companies can insure these loans. PMI loans are not restrictive in amounts as FHA. Insurance, either FHA or PMI requires additional premium payments at closing, and may also require an annual fee. Adjustable Rate Mortgage(ARMs). Lenders like the protection that ARMs gives from effects of rising interest rates, also ARMs starts out with lower interest rates than comparable fixed rate mortgages. Some buyers find that they can borrow more with ARM than a fixed-rate mortgage. Primary difference between ARM and Fixed-Rate mortgages is that the interest rate with ARM varies periodically. Some loans has CAPS on periodical adjustments and a cap on overall changes in the interest rate over the life of the loan. Graduate Payment Mortgages. The FHA also insures loan in which the interest rate is fixed, but the payment rises according to a pre-set schedule. These are called Grauduate Payment Mortgages(GPM) because the payments ae increased each year during the life of the loan. The effect is to reduce the payment level in the first few years and to increase it somewhat in the middle and later years.

OPTIONS

Need Low Downpayment choose a Conventional Loan

Need Low Payments in Early Years to help qualify choose ARM(Ajustable Rate Mortgage) with low initial interest rate or GPM(Graduate Paymnet Mortgage)

Desire to Reduce Interest Paid over the loan term choose a Loan with 15 years term growing equity mortgage.

Office Location CENTURY 21 SCVA Country Club 1323 Jacklin Road Milpitas, CA. 95035