Foreclosure
Refinancing Costs
Costs Involved
Why would your bank allow you to refinance if it means lost interest payments to them? Usually they understand that some homeowners need to refinance or they won't be able to afford their mortgage at all. Also, part of the costs of refinancing include penalties and fees for setting aside the original mortgage.
It's very important to understand the costs involved with refinancing because these costs must be offset by the money you would conceivably save, otherwise refinancing is not ... Read More »
Interest Rates
Initial interest rate.
Adjustable rate mortgages often have an initial interest rate which is the rate at the time of closing the mortgage. Very often these rates are called "starter rates" or "teaser rates" because they are often very low during this initial time period for the very sake of luring in borrowers. Unfortunately these initial interest rates are often so very low that borrowers are taken in by the low monthly payments these would offer and sign on for mortgages ... Read More »
Principal, Interest, Taxes, and Insurance
A mortgage means much more than the purchase price of the home. This loan includes the principal but also interest on that loan, property taxes on the home, and homeowner's insurance. These costs are referred to as PITI and they are typically nonnegotiable. Lenders insist that property taxes and homeowner's insurance be part of the mortgage payment and paid every month as unpaid property taxes can result in a lien on the property and homeowner's insurance is meant to insure ... Read More »
Mortgage Broker
Mortgage lien priority.
When someone loans you the sum of money you need to purchase your home, they have a lien on your property meaning they can seize it if you violate the terms of that mortgage. This of course is as a protection for the banks and lenders so that they can take the property and sell it if the borrower defaults on that loan so they recoup at least some of their costs.
Usually if you default on other loans ... Read More »
Mortgage Terms
To better understand how your mortgage works and how refinancing a mortgage works, you might want to consider some common terms that are associated with mortgages and refinancing.
Mortgage lender.
This is the person or company that provides the loan to borrower so that they can purchase the home. Because of the large amount of money involved in a home loan, the mortgage lender of course would want some type of security for that loan and this is where the mortgage comes ... Read More »
Definition of a Mortgage
Notice how the term mortgage is defined:
"A mortgage is the transfer of an interest in property (or the equivalent in law - a charge) to a lender as a security for a debt - usually a loan of money. While a mortgage in itself is not a debt, it is the lender's security for a debt. It is a transfer of an interest in land (or the equivalent) from the owner to the mortgage lender, on the condition that this ... Read More »