Mortgage Resources
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"I P.I.T.I. the fool who doesn't read this."
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P
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Principal
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(the part you are paying to yourself)
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I
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Interest
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(the part you are paying to the lender)
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T
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Taxes
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(the part you are paying to the city/county)
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I
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Insurance
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(the part you are paying to sleep peacefully at night)
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. this comprises your monthly payment.
Talk to a Lender:
Before looking at any homes, you must know what kind of a loan you will qualify for. It may be a whole lot less or even a whole lot more that you thought. We know several reputable lenders would can perform a quick, simple verbal pre-qualification in about 20 minutes.
Even in a buyer's market, your offer will be stronger and you will have more leverage and negotiating room with a pre-qualification letter. It allows the seller to see that you are in a realistic financial position to buy their property.
The Down Payment:
Believe it or not, you do not need a 5, 10 or 20% down payment to purchase a property. Sure, with more money down you will get a better interest rate. However, with a strong credit score, a good income, and low monthly debt, you're sure to qualify for at at least a few of the many loan programs available today without a down payment.
Closing Costs:
In addition to your down payment, you will also be paying title, lender and escrow fees. Other items paid through closing include, but are not limited to, prorated property taxes & homeowner's dues, insurance premiums and prepaid interest on your loan. You may also negotiate for the seller to pay for some of your closing costs.
As a rule of thumb and depending on many factors such as loan points, closing costs generally will range between 1 and 2% of the purchase price. You will receive a Good Faith Estimate of closing costs during escrow so you can know what to expect.
"Points" are one time charges equal to one percent of your loan amount. A seller is sometimes able to pay points on your loan to "buy down" your interest rate. Be sure to ask your lender if your loan has points, a pre-payment penalty or an interest rate expiration. The good news is that as a buyer, you pay no fee to your buyer's agent!
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