mortgage info - Rockland Real Estate Mortgage Info

CHOOSING THE RIGHT MORTGAGE. Terrific Information.

Mortgage Qualification Calculator
Get Pre-Qualified in the comfort of your own

Calculators

Payments

Mortgage Payment Calculator
Displays your mortgage payment and amortization schedule for the term of your loan.
Monthly Mortgage Payment Calculator
Calculates how much interest you save by prepaying the principal on your loan.
Interest Only Payment Calculator
Computes the monthly savings for an Interest Only payment loan. What is an Interest Only Loan?
Payment Option ARM Calculator
Shows you the monthly payments for an Option ARM, also called a Negative Amortized ARM loan. What is an Option ARM Loan?

Purchase

Rent Vs. Buy Calculator
Allows you to compare the costs of renting a residence versus buying a home.
Mortgage Qualification Calculator
Calculates the maximum purchase price.

Refinance

Refinance Calculator
Helps you determine if you will benefit by refinancing.
Debt Consolidation Calculator
Shows you how a refinance can reduce your monthly payments.

Other

Credit Grade Calculator
Helps you determine your credit rating.

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Which loan is right for me?

Years you plan to stay in the home	Recommended program
1-3 years	3/1 ARM, 1 year ARM or 6 month ARM
3-5 years	5/1 ARM
5-7 years	7/1 ARM
7-10 years	10/1 ARM, 30 year fixed or 15 year fixed
10+ years	30 year fixed or 15 year fixed

Loan Program	Advantages	Disadvantages
Fixed Rate Mortgages 30 year fixed 15 year fixed	Monthly payments are fixed over the life of the loan Interest rate does not change Protected if rates go up Can refinance if rates go down	Higher interest rate Higher mortgage payments Rate does not drop if interest rates improve

Loan Program	Advantages	Disadvantages
Adjustable Rate Mortgages (ARM) 10/1 ARM 7/1 ARM 5/1 ARM 3/1 ARM 1 year ARM 6 month ARM 1 month ARM	Lower initial monthly payment Rates and payments may go down if rates improve May qualify for higher loan amounts 30 year term, no balloon payment	More risk Payments may change over time Potential for higher payments if rates increase

Loan Program	Advantages	Disadvantages
Balloon Mortgages 7 year 5 year	Lower initial monthly payment Lower payment for a predetermined period of time Many balloon mortgages offer the option to convert to a new loan after the initial term	Risk of rates being higher at the end of the initial fixed period Risk of foreclosure if you cannot make balloon payment, refinance, or exercise the conversion option Balloon payment requires you to sell or refinance after the term, as opposed to a 7/1 or 5/1 program with a 30 year term

Loan Program	Advantages	Disadvantages
First Time Buyer Programs	Lower down payment Easier to qualify Lower rates may be available	May be subject to income and property value limitations Some government subsidized programs may generate a recapture tax if you sell the house too soon Education courses may be required to qualify for these loans

Loan Program	Advantages	Disadvantages
Stated Income Programs	Don't need to verify income Faster approval Good for borrowers who may not qualify with a full income documentation program	Higher rates Higher down payment

Loan Program	Advantages	Disadvantages
Interest Only Programs	You have several payment options Lower monthly payments Qualify for a higher loan amount Qualify at the interest only payment Option to pay the full normal payment Interest only payments for up to ten years	Higher rates Principal loan balance will not decrease during the interest only payment period Payment will be higher for the remaining term

Loan Program	Advantages	Disadvantages
No point, No fee Programs	No out-of-pocket loan costs at closing Closing costs are paid from the lender rebate Less money required to close Refinance without increasing your loan amount	Higher rates Higher payments Some lenders may have a short payoff penalty which is usually charged to the loan broker, but may be passed on to you Some require a prepayment penalty for the first one to five years

Loan Program	Advantages	Disadvantages
Imperfect Credit Programs	Potential for reestablishing credit if you pay your mortgage on time When used for debt consolidation, you may be able to reduce your monthly debt payment	Higher rates Terms may not be as favorable Harder to get long-term fixed loans Loans may have prepayment penalties

Loan Program	Advantages	Disadvantages
Home Equity Line of Credit	You only borrow what you need Pay interest only on what you borrow Flexible access to funds Interest may be tax deductible May be free of closing costs A good source for an emergency fund, if set up in advance Can be used for debt consolidation and lower payments Rates are usually lower than consumer loan or credit card rates	Rates can change. The maximum interest rate can be relatively high Payments can change Harder to refinance your first mortgage

Loan Program	Advantages	Disadvantages
Home Equity Fixed Loan	Fixed payments Interest may be tax deductible Get cash out for any purpose	Higher interest rates compared to first mortgage Harder to refinance your first mortgage Interest is paid on the entire loan amount, compared to an equity line of credit

FICO Scores vs. Credit Scores

fico scores vs credit scores

When you apply for a loan, the interest rate that the lender charges you
on that loan is determined by something known as a fico score.

Per Suze Orman: Every single person alive (once they have a credit card or apply for any type of credit) has a credit report AND a FICO score. You should be aware that there are three credit reporting bureaus. They are:

EQUIFAX
EXPERIAN
TRANSUNION

Each one of these bueaus has a FICO score attached to it. Therefore you can have as many as 3 FICO scores.

EVERY MOVE YOU MAKE when you pay a creditor, gets reported to one of this bureaus. It's up to the creditor which bureau they report to. Therefore, its possible that your credit card payment history would be on one bureau, your car loan on another and your mortgage on still another (or any combination of the above).

Remember: (excerpted from: myFico.com) Lenders use a number of facts to make credit decisions, including your FICO® score. Lenders look at information such as the amount of debt you can reasonably handle given your income, your employment history, and your credit history. Based on their perception of this information, as well as their specific underwriting policies, lenders may extend credit to you although your score is low, or decline your request for credit although your score is high.

Here's what you need to know: Since rate follows risk, if your FICO score is high the interest rate charged on the loan is lower - if you FICO score is low the interest rate the lender charges you is higher.

WHAT IS THE DIFFERENCE, therefore, BETWEEN A FICO SCORE AND A CREDIT SCORE? Fico scores are created by FICo and Credit Scores are created by the credit bureaus. The credit reporting bureaus have to send the credit scores to FICO so FICO can look at the reports to give you a score. Understand that because there are three different credit reporting bureaus, you can have three different FICO scores.

FICO HISTORY: Years ago the people whe were creating these fico scores (from information compiled from the credit bureaus) decided to get into this business themselves and create a credit score based on the information they already have on you. So they did, and "FICO" (which stands for Fair Isaac Corporation) for formed. (by the way ... the HIGHEST the score can go is 850)

HERE'S THE PROBLEM: 90% OF major lenders today only look at a FICO scoreS in determining the intereSt rate that you will be charged.

HERE'S THE SOLUTION: Now that you know you can have as many as 3 FICO scores, you should contact the creditor you want a loan from and ask them which fico scores they check and that's the one you should purchase and see how you are doing.

WHAT IS A FICO SCORE! (3:18 length)