There's A Lot More To A Mortgage Than Just Your Interest Rate
North American Precis Syndicate
When you buy a house, it's a good idea to make sure you understand all the costs involved. (NAPS)
(NAPSI)—A home mortgage is one of the biggest expenses a consumer
will undertake. That’s why it’s important to look beyond interest
rates to help get the lowest possible costs.
“When homebuyers look purely at interest rates, they don’t get
a complete picture of what they’re paying for a mortgage,” says
Glenn Brunker, mortgage executive for Ally Home,
the direct-to-consumer mortgage unit of Ally Bank. “Ignoring other
aspects may mean you’re not getting the mortgage that’s right for
your specific financial situation or leaving you without extra cash for home
improvements or emergency funds.”
To find a mortgage that’s right for your budget, evaluate such
factors as points, loan closing fees and other funds that may be required
upfront at closing.
You might have heard someone mention “points” when talking
about a mortgage.
Discount points, commonly known as points, are fees borrowers pay directly
to a lender at closing to get a lower interest rate. One point is equal to
one percentage point of your mortgage. For example, if you have a 30-year,
$275,000 mortgage and your lender charges you one point, you’ll have an
upfront charge of $2,750.
Points can be your friend to help lower the rate—but only when you
understand how points work and the right strategies to use them.
When purchasing a home, most consumers are focused on the amount of
interest on their mortgage and rightly so. But you also need to prepare for
expenses associated with closing, such as appraisal fees, escrow payments and
deed preparation fees.
The real estate site Zillow reports closing
costs typically run around 2 to 5 percent of a home’s purchase price.
But closing costs can differ from lender to lender by hundreds or even
thousands of dollars—so be sure to compare fees to help keep some cash in
Buying a home comes with a variety of ongoing expenses. Repairs and
potential renovations are obvious costs, but don’t forget about
expenses such as homeowner’s insurance premiums and property tax.
Homeowners are often required to pay these charges up front as part of
their monthly mortgage payment. Lenders hold the funds in what’s called
an escrow account and then make the insurance and tax payments on your
behalf. This ensures these expenses are paid on time and protects the lender
from tax liens and other financial losses.
To understand more about the mortgage process, you can download the free
Mortgage Playbook at www.ally.com/playbook.
Getting the house of your dreams at a price you can afford is the smart way
to truly call it “Home Sweet Home.”
Mortgage Products are offered by
Ally Bank, Member FDIC, Equal Housing Lender.
““When homebuyers look
purely at interest rates, they don’t get a complete picture of what
they’re paying for a mortgage,” says Glenn Brunker,
mortgage executive for Ally Home, the direct-to-consumer mortgage unit of
Ally Bank. http://bit.ly/2D2nGja”
On the Net:North American Precis Syndicate, Inc.(NAPSI)