Loan Information

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So far this page contains miscellaneous information as I come across it. As this body of information progresses, I may organize and section it but so far it's just a list of loan/money miscellany.

Here is the topics list. Click the topic to go to the article:

Principle & interest payments for a few different interest rates;
30 yr. fixed, fully amortized mortgages.

As an example:
You decide to buy that $450,000, 2,200 sq. ft. home with 5 bedrooms, 3 baths, a pool, 2 car garage plus RV parking on the side.
You put 10%, or $45,000, down and get a mortgage of $405,000 at 4.00% to pay the rest.

(Remember that these figures are based on a 30 year, fixed rate, fully amortized mortgage. These figures won't work for any other type of loan)

Then add your monthly property tax and home insurance(plus monthly HOA fees and/or Mello-Roos fees depending on where you're buying): $1,931.85/loan, $450/taxes, $70/insurance = $2,451.85 total monthly house payment. Pretty good for that big house, thanks to these low interest rates.

Advisory: depending on your loan type there can also be Private Mortgage Insurance or other monthly add-ons, such as for FHA loans. Talk with your mortgage advisor for exact details and estimates of your mortgage.

Of course talk with your mortgage broker for more exact, up-to-date figures and to decide which type of loan best suits your needs, qualifications, and goals.

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Qualifying for a FHA loan

With a low, 3 1/2% down payment requirements, competitive rates, and less stringent credit score requirements, more home buyers are choosing mortgages insured by the Federal Housing Administration, or ''FHA''. Mortgages insured by the FHA now account for 20% of the total dollar volume in home loans, up from just 3% in 2006.
Some benefits to FHA loans include: a better loan modification program, ability to easily and often less expensively refinance, low rates, an acceptance of borrowers with credit scores as low as 620.
FHA loans are targeted to low and moderate income borrowers, but there are not any income restrictions. However, these loans do restrict the amount that can be borrowed. In high cost areas such as California, the maximim amount that a mortgage applicant can borrow is $729,750.
Additionally, borrowers must pay an Up-front Mortgage Insurance Premium of 1% of the loan and (currently) an Annual Mortgage Insurance Premium varying from .85-.9%, which goes into the FHA's fund for repaying lenders if borrowers default. This is in addition to other usual closing costs.

for more information see HUD/FHA loans or talk with your mortgage representative.

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Closing costs

Basically, closing costs are the costs for the various services rendered to complete the sale. For more info about closing costs or to get an estimated closing costs statement for your planned purchase or sale, you can contact me, talk with an escrow company, or talk with your lender. When you start a loan your lender is required to give you an estimate of your eventual closing costs. It's only an estimate, though it will be maybe 95% accurate. When you settle up/sign loan documents right at the end of escrow you'll be given another list of your actual closing costs. This is sometimes known as the ''HUD1'' and it will be your actual costs.

ESCROW is just one of the many closing costs involved in buying or selling a home. To figure escrow costs from West Coast Escrow, they're $1.75 for each $1,000 of home price, then add $200.

RESERVES is the amount of money your lender wants you to still have sitting in your bank after all the final settlement is done. This is so that if something goes wrong for you that you'll still have some back-up. They want:
TAXES: on an average; 6 months taxes (1 month equals the purchase price times 1.2%, divided by 12)
HOME INSURANCE: on an average; $60-80/mo., homes over $400K more like $100/mo.

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