Twenty Terms You Must Know and Understand Before You Sign Off On Your Mortgage!

Buying a home is a major achievement in most everyone’s life. Pride of ownership, tax breaks and equity are just a few of the many benefits you’ll enjoy with your new home. Your home purchase may also be one of the largest you will ever make.

During the emotional excitement of buying a home, you may encounter terms with which you are unfamiliar. For some, it can be bit embarrassing to ask what they consider too many questions. Others may make a note of their questions but simply forget to revisit those points. To ensure that you have complete confidence during your home loan process, invest a moment to read this report and become familiar with the concepts and terms you’ll encounter. Knowledge is power and the more you know the more successful will be your decisions and the more soundly will you sleep at night having made them.

Adjustable Rate Mortgage (ARM)
Also referred to as a Variable Rate Mortgage. A mortgage in which the interest rate is adjusted periodically based on a pre-selected index.

Annual Percentage Rate (APR)
An interest rate that reflects the cost of a mortgage as a yearly rate. This rate takes into account any points and fees and is based on the loan going to it’s full-term.

Assumption
An agreement between buyer and seller in which the buyer assumes responsibility for the seller’s existing mortgage. This agreement usually saves the buyer money because closing costs and the current interest rate, possibly higher, do not apply.

Buy-down
A method of lowering the buyer’s monthly payment for a short period of time. The lender or homebuilder subsidizes the mortgage by lowering the interest rate for the first few years of a loan.

Caps
A limit in the amount the interest rate or monthly payments for an adjustable rate mortgage that may change.

Closing
Also referred to as settlement. The meeting at the conclusion of a real estate sale in which the property and funds are exchanged between the two parties involved.

Debt-to-Income Ratio
The ratio, expressed as a percentage, which results from dividing a borrower’s monthly payment obligation on long-term debts by the borrower’s gross monthly income.

Discount Points
Prepaid interest assessed at closing by the lender. A point is equal to 1 percent of the loan amount.

Down Payment
Cash paid by the buyer at closing that makes up the difference between purchase price and the mortgage amount.

Earnest Money
Money given by a buyer to a seller as a deposit to commit the buyer to the future transaction. Earnest money is subtracted from closing costs.

Equity
The value an owner has in real estate over and above the obligation against the property. Equity is fair market value minus the current indebtedness.

Escrow
Funds given to a third party which will be held to cover payments such as tax or insurance payments and earnest money deposits.

Fixed Rate Mortgage
A mortgage in which the interest rate remains constant throughout the life of the loan.

Loan-to-Value Ratio
The ratio between the amount of the mortgage loan and the appraised value of the property.

Market Value
The price that a property could possibly bring in the marketplace.

Mortgage Insurance
Insurance that protects lenders against loss if a borrower defaults. This is required when the loan-to-value ratio is greater than 80 percent.

Origination Fee
A fee charged by a lender for processing a loan application; usually computed as a percentage of the loan.

PITI
Refers to Principal, Interest, Taxes, and Insurance.

Underwriting
The decision-making process of granting a loan to a potential homebuyer.

Variable Rate Mortgage
Also referred to as Adjustable Rate Mortgage. A mortgage in which the interest rate is adjusted periodically based on a pre-selected index.


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Secrets Lenders Don’t Want You to Know!

The right or wrong decision when signing your home mortgage can mean thousands of dollars difference in interest paid. There are very important considerations to evaluate before you commit to a 15 or 30 year note. For many of us our mortgage payment is the most important financial decision we’ll ever make. Doesn’t it make sense to know as much as possible about the financing of our home? Take the time to thoroughly investigate all of your options!

Unbelievably, many of us sign the first mortgage placed in front of us. Typically the excitement of the new home purchase reduces the mortgage to not much more than an afterthought. What you read here could save you hundreds or even thousands of dollars. Your real estate professional has established relationships with the top lenders in your area. By aligning yourself with a professional agent you ensure that all the financial steps are taken care of properly and economically.

1. Utilize a Lender With Established Ties to an Agent - Lenders are much more flexible with the real estate agents who have done business with them previously. This relationship then establishes them as a team. The lender and agent work effectively together, referring each other business. That’s why a good agent can make substantial difference in setting up the most economical financing. And the right financing can, literally, save you tens of thousands of dollars over the life of your loan!
   
   
2. Don’t Attempt Paperwork Alone - All the paperwork required to complete the purchase of a home can be quite intimidating and frustrating for a home buyer. Make sure you have your lenders help you with all the paperwork. Get help from your team, your lender and agent. Their expertise will help alleviate the stress and it will prove to be invaluable before you sign your mortgage.
   
   
3. Look at All Your Options - Make sure you see at least 5 loan programs for your mortgage. Lenders have at least 10 programs and should work with you and your agent on deciding what is best for your circumstances. Evaluate all your options. After all it’s your money you’re spending - not theirs!
   
   
4. Demand Service - There is little difference between a bank, savings and loan, or a mortgage broker when it comes to the competitiveness of their loan rates. The difference is in the service they provide. It is their job to serve you! You want to get the loan approved and move into your new home as quickly as possible, but don’t overlook the fact that you are the one spending the money and they are the ones who should cater to your needs. Don’t let the process become so intimidating that you lose that understanding.
   
   
5. Stay in Complete Touch - You should receive a written report from your lender about every step. This will ensure that no details are overlooked and there will be no surprises.
   
   
6. Negotiate a Flexible Loan - Don’t just accept the terms they lay down in front of you. Lenders are in the business of loaning money and they want your business. Make sure you examine every option available to you. If you negotiate a variable rate loan, many lenders have the ability to move you into a fixed loan if rates start going up. Make sure that you understand whether or not that is an option in the package you are looking at.
   
   
7. Don’t Give Up on the First No - Initial decisions are not always final decisions. Going to a higher authority can sometimes get you the loan, but do so with the assistance and compliance of your lender and agent. Many times special circumstances when explained properly to the person in charge, will win you the loan.
   
   
8. Don’t Wait for the Bottom of the Market - The odds of you hitting the bottom of your market are about like the odds of you hitting your state lotto! You will almost never hit the bottom of a market. And trying to time it exactly right is often costly. It usually causes a person or family to miss out on the opportunity to purchase a very nice property. You’re better off simply negotiating the best rate and terms you can at the time you find a property. If interest rates go down, you can refinance. This is a much better approach because you won’t miss out on the property you’ve spent so much time locating.
   
   
9. Be Honest With Your Lender - Your lender wants to help you with your loan. The only time they get paid is when you get approved. The more information (good or bad) you provide your lender, the easier it will be for them to get an approval. It helps them present the loan in the best light. This in turn helps the loan get the highest approval rating.
   
   
10. Become Completely Educated - Pick your lender’s brain. Lenders will teach you all about your various options, even if you haven’t found the right property yet. They will be very patient with you while you are looking, especially if you have aligned yourself with the right agent. They understand all the up-front work will pay off in future business. Your agent will then continue to refer people to the courteous and service-minded lender on down the line.
    
    
11. Get Prequalified - Lenders will provide you with a certificate of pre-qualification. By getting prequalified you know exactly what financial parameters to stay within. Your agent and lender will consult with you and help you get qualified for the loan that best fits your needs. Many times they are able to get you a larger loan than you may have thought possible.
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The Nine Most Common Mistakes to Avoid When Obtaining a Home Mortgage!

You are about to make what will most likely be the largest transaction of your life: your home mortgage. Unfortunately, many homebuyers do not take the time to research some of the little but weighty intricacies of mortgages. Researching the mortgage process takes little time compared to the tens of thousands of dollars it could save you.

Doesn’t it make sense to become as completely informed as possible before you buy your next home? This special report is designed to help you avoid nine common mistakes. Remember that the right lender can help you make good, sound business decisions based on your personal financial situation.

1. Find a Reputable Lender - This is the most important choice you can make when starting the mortgage process. If you don’t trust your lender, you are in for a long and stressful home-buying experience.
   
   
2. Pricing - Don’t be lured into a mortgage company strictly by promises of low rates. Find out how long the advertised rate is guaranteed for. Make sure there is enough time to close on your loan. Some companies may make these "promises" but will try changing the rate prior to closing. They may claim that your "lock-in" rate has expired so make sure you have the expiration date in writing. In some cases, the lender may even try to delay your closing to break the "lock-in" rate. In other cases the delay may be beyond the lender’s control. Make sure to allow yourself plenty of time for closing. Delays in the process are common and everyone (builders, title companies, even yourself) is responsible.
   
   
3. Programs - You will see several programs that offer special low-interest rates. Keep in mind that they may not be the best program for your situation. Make your lender explain what programs they feel best serve your needs and more importantly, why.
   
   
4. Fixed or Adjustable Rate Mortgage (ARM) - Conventional thinking is that fixed is always better and while this is sometimes true, it is not always the case. The key here is to ask, "How long am I going to live at this property?" An ARM can actually be a better choice if you are going to be in the home for a short time. The average for how long a first time homebuyer keeps their mortgage is less than four years. In general, the longer you plan on staying in your home, the better a fixed rate mortgage will suit your needs.
   
   
5. Don’t try to bottom out the market - Deciding when to lock in to a mortgage rate can be difficult. Many people will float, trying to guess when rates have hit bottom. Unfortunately, a lot of times they will wait too long and end up with a much higher interest rate. There is nothing wrong with floating but keep a close eye on economic indicators. Your daily newspaper or even the nightly news can be an excellent source of information on the latest interest rate activity. As closing nears, it might be worth locking in.
   
   
6. Negotiate problems prior to closing – Its common for a problem to arise before closing. Waiting until closing will rarely be in your best interest. For instance, if you accept $400 at closing in lieu of the seller making a repair and after closing you find that the repair will actually cost $600, you’ve obviously made a poor decision. Whether the builder agreed to add an item and has not or the seller has made a repair that is not acceptable to you, discussing a solution prior to closing will give both parties time to analyze and determine options.
   
   
7. Be prepared for closing costs – In addition to the down payment, you will be required to pay fees and other closing costs at the time of the final transaction. Closing costs typically range from 2 percent to 6 percent but will be dependent upon your situation. Lenders must provide you with a "Good Faith Estimate." The "Good Faith Estimate" will breakdown all costs so that you may know what to expect at closing.
   
   
8. Close at the end of the month – When making a mortgage payment, you will be paying interest that has accrued from the previous month. Upon closing however, your lender will charge you prepaid interest for the date the loan is recorded through the end of that month. Therefore, one way to lower your closing costs is to close in the latter part of the month. This will lower the amount of prepaid interest that you must pay.
   
   
9. Look out for hidden fees -- Check for certain miscellaneous fees such as inspection, notary, and document preparation. These types of fees can mean hundreds of dollars in closing costs. Remember that this is your money at stake. Never should you be afraid to ask for explanations of fees you are being charged.

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Louisiana Home Loans

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Whether you're building a house or buying a vacation home in this beautiful state, Quicken Loans provides innovative Louisiana home loan products suitable for a variety of goals.

Our Most Popular Home Loans

• Fixed-Rate Mortgages - Fixed rate and payment make budgeting easier.
• Smart30 Loan - Interest-only payments with the security of a fixed rate.
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Loans for First-Time Home Buyers

• Flex100 - Buy a home with no down payment.
• Power Buyer^® - More than pre-approved, shop with a full approval.

Home Loans for Special Situations

• Jumbo Loans - Borrowing more than $417,000 to buy a home.
• Advantage1st - A no-documentation (no doc) loan with low rates.

Still not sure which of our home loans in Louisiana is right for you? Make use of our convenient online home loan calculators, which can provide you with a monthly mortgage payment quote. These calculators can also estimate how much you can afford to pay for your home, compare the costs of renting versus buying and determine the tax advantages of owning a home in Louisiana.

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Quicken Loans takes great pride in meeting the needs of our valued customers. That is why we match all of our customers with a specific Quicken Loans mortgage banker. In addition to being a valuable resource for information, guidance and advice, your mortgage expert will review your options with you and ultimately find the right home loan in Louisiana for your needs.

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Florida Home Loans

Purchase the Florida home of your dreams with Quicken Loans. We are America's #1 online mortgage lender because of our innovative products, simple process and quality service. All you need to do is fill out a short application, and a Quicken Loans Florida mortgage banker will guide you the rest of the way. Apply online for a Florida home loan or call 800-414-3811 today to speak with a Quicken Loans mortgage expert.

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Quicken Loans offers diverse Florida home loan products for a variety of needs. Whether you're buying your first house or purchasing a vacation home in sunny Florida, our innovative home loan programs give you lots of options.

Our Most Popular Home Loans

• Smart Choice Interest-Only Loan - Low monthly mortgage payments.
• Fixed-Rate Mortgages - Fixed rate and payment make budgeting easier.
• Smart30 Loan - Interest-only payments with the security of a fixed rate.

Loans for First-Time Home Buyers

• Flex100 - Buy a home with no down payment.
• Power Buyer^® - More than pre-approved, shop with a full approval.

Home Loans for Special Situations

• Advantage1st - A no-documentation (no doc) loan with low rates.
• Jumbo Loans - Borrowing more than $417,000 to buy a home.

You can use of our convenient online home loan calculators to help find the Florida home loan that is right for your needs. In addition to providing a monthly mortgage payment quote, these calculators can help you figure out how much you can afford to pay for a home, compute the costs of renting versus buying, and learn the tax advantages of owning a home.

Personalized Service, Convenient Process

Come see why 9 out of 10 clients say they would recommend Quicken Loans to friends and family. With Quicken Loans, you will be assigned to your own personal mortgage banker, who will research all of your home loan options and help find the best product for your needs. Quicken Loans can then close your Florida home loan in just a few weeks. We'll even bring the final paperwork to you.

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California Home Loans

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Choose the California Home Loan That is Right for You

Quicken Loans offers diverse California home loan products for a variety of needs. Whether you're buying your first house or purchasing a vacation home in California, our innovative home loan programs give you many options.

Our Most Popular Home Loans

• Smart Choice Interest-Only Loan - Low monthly mortgage payments.
• Fixed-Rate Mortgages - Fixed rate and payment make budgeting easier.
• Smart30 Loan - Interest-only payments with the security of a fixed rate.

Loans for First-Time Home Buyers

• Flex100 - Buy a home with no down payment.
• Power Buyer^® - More than pre-approved, shop with a full approval.

Home Loans for Special Situations

• Advantage1st - A no-documentation (no doc) loan with low rates.
• Jumbo Loans - Borrowing more than $417,000 to buy a home.

When considering a specific California home loan, make use of our convenient online home loan calculators. In addition to providing a monthly mortgage payment quote, these calculators can estimate how much home you can afford, compute the costs of renting versus buying, and illustrate the tax advantages of owning a home.

Fast, Simple, and Personalized Process

After applying online or over the telephone, you will receive your own personal Quicken Loans mortgage banker, who will research your options and find the best California home loan for your financial needs. Quicken Loans can then close your loan in just a few weeks. We'll even bring the final paperwork to you.

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West Virginia Home Loans

As America's top online mortgage lender, Quicken Loans is a trusted source for a West Virginia home loan. Our diverse products can meet a variety of needs, from buying your first home to building a new house in West Virginia. Our process is fast, easy and convenient. Simply fill out our short form and let a Quicken Loans mortgage expert guide you the rest of the way. Or, call 800-414-3811 to speak with a West Virginia mortgage banker.
Personalized Service, Convenient Process

See why 9 out of 10 clients would recommend Quicken Loans to friends and family. When seeking a home loan in West Virginia with Quicken Loans, you will be assigned to your very own mortgage banker, who will research all of your options. After providing some valuable advice, your personal mortgage expert will help you find the best West Virginia home loan for your financial needs. Quicken Loans can then close your loan in just a few weeks.
Home Loans for All Types of Goals

Quicken Loans offers diverse West Virginia home loan products for a wide variety of needs. Use our mortgage payment calculator to help determine which Virginia home loan is right for you.

Our Most Popular Home Loans

* Fixed-Rate Mortgages - Fixed rate and payment make budgeting easier.
* Smart30 Loan - Interest-only payments with the security of a fixed rate.
* Smart Choice Interest-Only Loan - Low monthly mortgage payments.

Loans for First-Time Home Buyers

* Flex100 - Buy a home with no down payment.
* Power Buyer® - More than pre-approved, shop with a full approval.

Home Loans for Special Situations

* Jumbo Loans - Borrowing more than $417,000 to buy a home.
* Advantage1st - A no-documentation (no doc) loan with low rates.

Our online payment calculators can compare the costs of renting versus buying, determine the tax advantages of owning a home, and estimate how much you can afford for a West Virginia home loan. For more online assistance, visit our Home Purchase Center to read the latest articles on home mortgages.


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