Buying Real Estate Prepare Determining needs Gameplan "The Players" Agents Sellers Lenders Attorneys and Closing Agents Mortgaging Preparing Types Applying Negotiating Offers Contracts Inspecting Professional Personal Closing Insurances  Contact Us	Find and Compare Mortgages at Quicken Loans Buying Real Estate: Mortgages Probably one of the reasons that buying a home is such an emotional experience is because not only do you have the actual house buying to deal with, but for most home buyers you also have the mortgage process to encounter. This can be a smooth and almost uneventful process, or an unnerving one. A great deal depends on the preparation of the buyer as well as the selection of an efficient mortgage company. If you are comfortable and ready to search for a Mortgage, Click here. Need more information? Read on... Prequalification, Preapproval, and Commitment Many real estate buyers are cloudy on the distinctions between what constitutes prequalification, preapproval, and final approval or commitment. Prequalification uses only the information that you supply regarding income and debts, as well as a basic credit report, to give an opinion on your suitability for a mortgage. It commits no one, but it does eliminate some potential questions and strengthens your bargaining position. Preapproval is a true loan approval, usually subject only to an acceptable appraisal of the property you are buying. All income and debts have been verified and a full credit report has been obtained. This gives you the strongest bargaining position, since the only remaining question is the verification of the value of the home that you are buying. Final Approval and Commitment is the final step. All "i's" have been dotted and "t's" crossed. Although it may be subject to some final documentation (for example, the original copy instead of a fax of an IRS return), all of the necessary verifications, as well as an acceptable appraisal of the property, have been completed. The Commitment Letter informs the Closing Agent that the mortgage process is complete. How much down payment? One of the first questions that home buyers ask is "how much down payment are we going to need?" Unfortunately, there is no standard answer. Down payments will vary from 0% (with a VA--Veteran's Administration loan) to upwards of 25% (with certain "non-conforming" loans). As an average, most home buyers make down payments in the 5%-15% range, although your own personal situation may dictate more or less down payment. What a Mortgage Payment Consists of 1) Principal: The repayment of the original amount borrowed on a monthly basis. 2) Interest: The cost of borrowing the principal amount, repaid on a monthly basis. 3) Taxes: Real Estate taxes paid to a local government agency. 4) Insurance: Homeowners insurance on the home. Also any mortgage insurance, which is paid to protect the mortgage company. The total of these items is known as the PITI (Principal/Interest/Taxes/Insurance) payment. Comparing Terms Always make a comparison between a 15 year term payment and a 30 year term payment. The difference is often surprisingly smaller than anticipated. The savings over the term of the loan, however, can be substantial. For example, comparing a 15 year term to a 30 year term, $100,000 mortgage at an 8 1/2% fixed rate yields the following results.   15 Year 30 Year Principal and Interest Payment (per month) $985 $769 Total paid over term in P&I $177,300 $276,840 Total interest over term $77,300 $176,840 To calculate your payment, use our payment calculator What About "Points?" Points are prepaid interest that the lender charges at the time of the mortgage origination (when you close). One point is equal to one percent of the mortgage amount. Since points are interest, you can get a lower mortgage rate by paying more points (which makes sense if you are planning to stay in the house a long time) or pay less points by taking a higher interest rate (if you do not plan to own the house for a long period or are short on the cash needed for closing). Finding a Mortgage Get Pre-Approved before you look for a home and shop with the power of a cash buyer. Quicken Loans is one of the nation's largest home mortgage lenders and was named "Best of the Web" by Forbes, Money and PC magazines. Quicken Loans offers over 100 loan programs and can tailor a program to fit your exact needs. Their process is quick and easy. You can apply online in minutes. You can even sign your application and track the process of your loan online. Over 20 years experience Direct lender in 50 states Great rates Fast, easy, minimal paperwork Find out that "The Easiest Way To Get A Home Loan" is with Quicken Loans, a name you trust.
	Back to Top