When purchasing a home, most people will pay a cash downpayment, and finance the remainder of the home purchase price with a home purchase loan.
What types of fees are associated with a home purchase loan?
When you get a home purchase loan, you will have to pay fees to the lender. Such fees could include an application fee, origination fee, underwriting fee, processing fee, brokerage fee, courier fee. Fees for home purchase loans can vary widely by company, so it pays to shop around.
-- Credit Tip by FindLocalBanks.com
The finance charge is the total dollar amount you pay to use credit. It includes interest costs and other costs, such as service charges and some credit-related insurance premiums. For example: Suppose you borrow $1000 for one year, and the interest is $100. If there is a service charge of $10, the finance charge will be $110.
How much of a home purchase loan can I afford?
When determining how much of a home purchase loan you can afford, a lender will take the following things into consideration: current interest rate levels, your income, current monthly debt load and your history of handing credit obligations. Every lender may establish their own guidelines regarding these factors, so if one lender turns you down, you can always apply for a home purchase loan with a different lender.
Where can you get a home purchase loan?
There are many services on the Internet that can help you obtain a home purchase loan. You can also get a home purchase loan from a local mortgage company and many banks and credit unions.
-- Credit Tip by FindLocalBanks.com
Federal law requires that all creditors must state the cost of their credit in terms of an Annual Percentage Rate (APR). This rate takes into account how the loan is repaid on a yearly basis, and allows you to accurately compare the cost of credit among lenders. For example: You borrow $1000 for one year and pay a finance charge of $100. If you can keep the entire $1000 for the whole year and then repay $1100 at year’s end, you are paying an APR of 10 percent. But if you repay the $1000 and finance charge (a total of $1100) in twelve equal monthly installments, you don’t really get to use $1000 for the whole year. In fact, you get to use less and less of that $1000 each month. In this case, the $100 finance charge amounts to an APR of 18 percent.
What is the interest rate charged on a home purchase loan?
The common types of home purchase loans offer the home buyer either a fixed interest rate (which will remain the same each year until the loan is paid off) or an adjustable rate (which is subject to change every year). The adjustable rate home purchase loans have the advantage of a low introductory rate, which can increase a buyer's purchasing power (allow the buyer to afford more loan).
Mortgage rates charged by lenders for home purchase loans are subject to change on a daily basis. Weekly averages for popular loan products are reported in the
