Oro Valley and Tucson Real Estate-How to get a Home Loan

Oro Valley and Tucson Real Estate-How to get a Home Loan

GET PRE-APPROVED FOR A HOME LOAN-Suggested Lenders

Ed Arriola

Mortgage Loan Officer

Mobile: 520-419-9111 
Email: EdArriola@longmortgage.com 
NMLS: 168646

CURRENT RATES APPLY TODAY

Gwen Musselman

Mortgage Loan Officer

Mobile: 844-889-4429 
Email: GwenMusselman@longmortgage.com 
NMLS: 905071

CURRENT RATES APPLY TODAY

 

 

Home Loan Dictionary

A mortgage is a loan that is secured by the value of your home or other real estate. Mortgages may be offered at a fixed interest rate for the life of the loan, or at a rate that may change over the life of the loan. Repayment terms range from 15 to 30 years, depending on the type of loan.

Some terms that you might hear in discussing mortgages include:

  • Amortization: The process of paying the principal and interest on a loan through regularly scheduled installments.

  • Annual Percentage Rate (APR): The cost of the loan expressed as a yearly rate on the balance of the loan.

  • Application fee: The fee that a lender charges to process a loan application

  • Balloon loan: A mortgage in which monthly installments are not large enough to repay the loan by the end of the term. As a result, the final payment due is the lump sum of the remaining principle.

  • Closing costs: Expenses incidental to the sale of real estate, including loan, title and appraisal fees

  • Convertible adjustable-rate mortgage: A mortgage that starts as an adjustable-rate loan but allows the borrower to change it to a fixed-rate mortgage during a specified period of time Equal Credit Opportunity Act: A federal law that prohibits a lender or other creditor from refusing to grant credit based on the applicant’s sex, marital status, race, religion, national origin or age.

  • Fannie Mae: The Federal National Mortgage Association (FNMA)

  • Federal Housing Administration (FHA): This government agency operates a variety of home-loan programs.

  • Fixed-rate mortgage: A home loan with an interest rate that will remain constant for the term of the loan.

  • Freddie Mac: The Federal Home Loan Mortgage Corporation

  • Housing expense ratio: The percentage of gross monthly income devoted to housing costs

  • Index: Financial tables used by lenders to calculate interest rates on adjustable mortgages and on Treasury bills

  • Interest rate: The sum, expressed as a percentage, charged for a loan.

  • Interest rate caps: A limit on the amount that can be charged to the monthly payment of an adjustable-rate mortgage during an adjustment period.

  • Interest rate ceiling: The highest interest a lender can charge for an adjustable-rate mortgage

  • Interest-only loan: A mortgage on which the borrow pays only the interest that accrues on the loan balance each month, and so the outstanding balance does not decline with each payment

  • Late charge: A fee imposed on a borrower when the borrower does not make a payment on time

  • Mortgage acceleration clause: A clause that allows the lender to demand that the entire balance of the loan be repaid in a lump sum, usually if the house is sold or refinancing, the title changes hands or the borrower defaults

  • Origination fee: A fee charged for processing a loan; also called “points” PITI (Principal, Interest, Taxes and Insurance): The figure is designed to represent the borrows actual monthly mortgage-related expenses

  • PMI (Private Mortgage Insurance): A special type of loan insurance that is often required if the borrower’s down payment is less than 20 percent of the home’s purchase price

  • Qualifying ratios: The formulas that lenders use to determine how much a potential buyer can borrow

  • Rate lock: An option to set an interest rate during the loan application process

  • Total expense ratio: The percentage of monthly debt obligations relative to gross monthly income

  • Treasury Index: An index used to determine interest rate changes for adjustable rate mortgages

Let us help you understand your home financing options

Talk to your lender about all the loan options that are available to you. We’ll guide you through the features, benefits and considerations so you can make an informed loan decision.

Homebuying loans

Get the loan information you need, whether you’re buying:

  • Your first home

  • Your next home

  • A vacation or second home

  • A foreclosure property

  • An investment property

Fixed and Adjustable Rate Mortgages

Fixed- and adjustable-rate mortgages are two of the most popular loan types for buying or refinancing a home. Both options are available for conventional conforming loan amounts, non-conforming loan amounts ("jumbo"), and FHA or VA programs.

Fixed-rate mortgage

Features

  • Your interest rate and monthly principal and interest (P&I) payments remain the same for the life of your loan

  • Available in a variety of loan term options

Benefits

  • Predictable monthly P&I payments allow you to budget more easily

  • Protection from rising interest rates for the life of the loan, no matter how high interest rates go

  • May be a good choice if you plan to stay in your home for a long time

Considerations

  • The overall interest you pay is higher on a longer-term loan than on a shorter-term loan

  • On a shorter-term loan, the monthly P&I payment is typically higher than on a longer-term loan

 Adjustable-rate mortgage

Features

  • Your interest rate and monthly principal and interest (P&I) payments remain the same for an initial period of 3, 5, 7, or 10 years, then adjust annually

  • Includes an interest rate cap that limits how high your interest rate can go

Benefits

  • Typically ARMs have a lower initial interest rate than on a fixed-rate mortgage

  • The interest rate cap limits the maximum amount your P&I payment may increase at each interest rate adjustment and over the life of the loan

  • May provide flexibility if you expect future income growth or if you plan to move or refinance within a few years

Considerations

  • Monthly principal and interest payments may increase when the interest rate adjusts

  • Your monthly principal and interest payments may change every year after the initial fixed period is over

Whether you are buying your first property or your fourth, we understand it can be a big and often daunting decision. That's why we want to make applying for your home loan quick and easy.

Please Have These Items Ready

Current and Previous Addresses (2 years)

Property Information (if applicable)

Current and Previous Employment Information and dates including monthly salary

Bank Account Statements

Current monthly housing expenses such as rent and mortgage payments

Address and Market Value information for properties you own, including taxes & insurance

Sources and Income Amounts for all Borrowers. If a W-2 employee, pay stubs for the last 30 days

Please Visit My Websites http://www.orovalleyrealestateandhomes.com/ and http://www.tucsonrealestateandhomes.com/ for some beautiful Oro Valley and Tucson Real Estate and Homes.

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