There are a few factors that are taken into consideration:
What is a Loan Estimate?
It's a mandated disclosure listing the estimated settlement costs associated with the loan. The lender is required to provide it within three business days after the application is received. The typical loan estimate includes appraisal fees, credit report fees, any lender fees, your attorney’s fees, tax and insurance escrow fees, mortgage insurance premium and interest paid in advance.
What are points?
Points are upfront loan fees that are paid to lenders and mortgage brokers to reduce your monthly interest rate and total interest due over the life of a loan. Here's how it works: 1 point equals 1% of the total loan amount. Paying points for a lower interest rate is a matter of paying money now versus paying money later. Normally clients do a zero point loan, we will help you decide what is best for you.
What is Private Mortgage Insurance (PMI)?
If the down payment is less than 20%, It is insurance that acts as protection for the lender in the event of a default. Ask us about NO PMI loans, we have plenty with only 5% down!
Why is the Annual Percentage Rate (APR) different from the interest rate applied for?
APR is computed from the amount financed and is based on what your proposed payments will be on the actual loan amount credited to you in the settlement.
Why do I have to wait three days to receive my money when I refinance or to close a purchase? Because it is a rescindable transaction under federal law. This means that the actual proceeds of the finances are not disbursed for a period of three full banking days after the settlement. During this period, you have the right to rescind (cancel) the transaction.
What tax advantages do you have for buying a home?
After buying a new home, you can take advantage of substantial tax savings available only to homeowners. Could include: