Is it a good idea to pay points for a lower rate?

If you are refinancing mortgage, paying points is not always your best option. Points paid for refinancing can be deducted only in small amounts from your taxes, so it could take couple of years before you benefit from a lower rate.

What is the best way to find mortage lenders?

It is a good idea to contact at least three to five lenders for input on mortgage programs and rates. You can do all of your shopping on-line or by phone. If there are any usual twists to your mortage scenario, it is best to disclose as much information up front as possible to be certain you are making a proper mortage comparison amongst lenders. When making morgage comparisons you must be sure to compare mortgages of similar terms.

How much money can I borrow with home equity line of credit?

Depending on your your income,credit history, and the amount of your debt, home equity lenders could lend you up to 80% of value of your home less the amount owed on your mortgages.

How much Homeowner's insurance coverage do I need to get new mortgage?

A safe bet is to buy a guaranteed-replacement-cost policy that will generally pay out 20-50% more than the face value of the policy to rebuild your home (this is also the preferred policy of mortgage lenders). A replacement-cost policy typically adjusts the amount of insurance each year to keep pace with rising construction costs in your area. It is important to note that local building codes require structures to be built to specific standards which could vary over time, if your home is severely damaged, you may be required to rebuild it to current codes. Even guaranteed-replacement-cost polices do not always cover this expense. However, many insurers offer an endorsement that will pay for the upgrading cost, it is a good idea to consider adding such an endorsement to your replacement-cost policy.

What is the difference between 0 point and no cost mortgage?

With no cost mortgage, a borrower has accepted a higher interest rates, with the trade off that the lender or broker will pay for all their non-recurring closing costs. With 0 point mortgage, a borrower has opted not to pay points to buy their interest rates down but will still be paying for their base closing costs.

What is a mortgage prepayment penalty and is it generally advisable to get a mortgage that has one?

A prepayment penalty allows the lender to charge a borrower additional interest, typically six months worth, when a morgage is repaid during the penalty period, which is usually somewhere in the first three to five years of the mortgage. If a mortgage does have a prepayment penalty, this is clearly stated within the mortgage disclosures, mortgage note or prepayment penalty rider to the note. The advantage of taking a mortgage with a prepayment penalty is that it could carry a lower rate of interest or you may be permitted to take a it without paying for non-recurring closing costs.

Is it possible to reduce my closing costs?

If you are refinancing, you could reduce some costs by asking your lender about them. Example: your lender could use your last home appraisal or your other credit reports or even recertify old documents for cheaper then getting new documents.

What should I get in writing when getting a loan?

If your loan is primarily for personal or family needs, the lender is required to give you a disclosure form before you sign the documents.This disclosure form should tell you the actual cost of the loan. It should include the finance charge, the annual percentage rate and the all the other fees included.

How long will I have to repay the second mortgage?

Some second mortgage loans could go for 20 years and some could require repayment in same year. You should discuss the repayment terms with lenders and pick one who offers the best terms for your needs.

What is APR?

APR is annual percentage rate and its purpose is to give borrowers a truer representation of the effective interest rate on their mortgage. APR factors in certain closing costs and fees and spreads these costs over the life of the mortgage, along with the note rate, to arrive at a more accurate annualized percentage rate than the note rate alone represents.

What paperwork will the lender need to process my mortgage?

The answer depends upon the quality of your credit and the amount of equity you have in your property. On a typical fully documented house mortgage application (where an applicant is seeking to qualify based on an employee's salary), the mortgage lender will require: one month's current pay stubs, W-2's for the prior two years and bank and investment account statements for the prior 2-3 months. If an applicant is self-employed then additional documentation could be required

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