Loans, Lenders, Mortgages, Oh My! - WCAX.COM Local Vermont News, Weather and Sports-

Loans, Lenders, Mortgages, Oh My!

 How do I know if I can get a loan?

Answer: Use our simple mortgage calculators to see how much mortgage you could pay - that's a good start. If the amount you can afford is significantly less than the cost of homes that interest you, then you might want to wait awhile longer. But before you give up, you could contact a real estate broker to help you evaluate your loan potential. A broker will know what kinds of mortgages the lenders are offering and can help you choose a lender with a program that might be right for you. Another good idea is to get pre-qualified for a loan. That means you go to a lender and apply for a mortgage before you actually start looking for a home. Then you'll know exactly how much you can afford to spend, and it will speed the process once you do find the home of your dreams.

How do I find a lender?

Answer: You can finance a home with a loan from a bank, a savings and loan, a credit union, a private mortgage company, or various state government lenders. Shopping for a loan is like shopping for any other large purchase: you can save money if you take some time to look around for the best prices. Different lenders can offer quite different interest rates and loan fees; and as you know, a lower interest rate can make a big difference in how much home you can afford. Talk with several lenders before you decide. Most lenders need 3-6 weeks for the whole loan approval process. Your real estate broker will be familiar with lenders in the area and what they're offering. Or you can look in your local newspaper's real estate section - most papers list interest rates being offered by local lenders. You can find FHA-approved lenders in the Yellow Pages of your phone book.

In addition to the mortgage payment, what other costs do I need to consider?

Answer: Well, of course you'll have your monthly utilities. If your utilities have been covered in your rent, this may be new for you. Your real estate broker will be able to help you get information from the seller on how much utilities normally cost. In addition, you might have homeowner association or condo association dues. You'll definitely have property taxes, and you also may have city or county taxes. Taxes normally are rolled into your mortgage payment. Again, your broker will be able to help you anticipate these costs.

So what will my mortgage cover?

Answer: Most loans have 4 parts: principal: the repayment of the amount you actually borrowed; interest: payment to the lender for the money you've borrowed; homeowners insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders; and property taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year. Most loans are for 30 years, although 15 year loans are available, too. During the life of the loan, you'll pay far more in interest than you will in principal - sometimes two or three times more! Because of the way loans are structured, in the first years you'll be paying mostly interest in your monthly payments. In the final years, you'll be paying mostly principal.

What do I need to take with me when I apply for a mortgage?

Answer: Good question! If you have everything with you when you visit your lender, you'll save a good deal of time. You should have: 1) social security numbers for both your and your spouse, if both of you are applying for the loan; 2) copies of your checking and savings account statements for the past 6 months; 3) evidence of any other assets like bonds or stocks; 4) a recent paycheck stub detailing your earnings; 5) a list of all credit card accounts and the approximate monthly amounts owed on each; 6) a list of account numbers and balances due on outstanding loans, such as car loans; 7) copies of your last 2 years' income tax statements; and 8) the name and address of someone who can verify your employment. Depending on your lender, you may be asked for other information.

I know there are lots of types of mortgages - how do I know which one is best for me?

Answer: You're right - there are many types of mortgages, and the more you know about them before you start, the better. Most people use a fixed-rate mortgage. In a fixed rate mortgage, your interest rate stays the same for the term of the mortgage, which normally is 30 years. The advantage of a fixed-rate mortgage is that you always know exactly how much your mortgage payment will be, and you can plan for it. Another kind of mortgage is an Adjustable Rate Mortgage (ARM). With this kind of mortgage, your interest rate and monthly payments usually start lower than a fixed rate mortgage. But your rate and payment can change either up or down, as often as once or twice a year. The adjustment is tied to a financial index, such as the U.S. Treasury Securities index. The advantage of an ARM is that you may be able to afford a more expensive home because your initial interest rate will be lower. There are several government mortgage programs that might interest you, too. Most people have heard of FHA mortgages. FHA doesn't actually make loans. Instead, it insures loans so that if buyers default for some reason, the lenders will get their money. This encourages lenders to give mortgages to people who might not otherwise qualify for a loan. Talk to your real estate broker about the various kinds of loans, before you begin shopping for a mortgage.

Copyright U.S. Department of Housing and Urban Development

  • Local NewsMore>>

  • Hinesburg man in custody after alleged shooting

    Hinesburg man in custody after alleged shooting

    Friday, April 25 2014 4:04 AM EDT2014-04-25 08:04:41 GMT
    Police say a 71-year-old man is in custody accused of shooting a female relative in the hand and chest around 8:30 Thursday evening.The incident happened on Richmond Road. The Hinesburg police chief says the man was arrested without incident. He and the victim are long time residents of Hinesburg. Detectives are still investigating what sparked the shooting. But the chief says neither the victim nor the shooter have had any interactions with police before this. The woman was taken to Fletche...More >>
    Police say a 71-year-old man is in custody accused of shooting a female relative in the hand and chest around 8:30 Thursday evening.The incident happened on Richmond Road. The Hinesburg police chief says the man was arrested without incident. He and the victim are long time residents of Hinesburg. Detectives are still investigating what sparked the shooting. But the chief says neither the victim nor the shooter have had any interactions with police before this. The woman was taken to Fletche...More >>
  • Springfield police search for armed robber

    Springfield police search for armed robber

    Friday, April 25 2014 12:00 AM EDT2014-04-25 04:00:49 GMT
    Springfield Police need your help to find an armed robber. They say yesterday a white man carrying a semi-automatic handgun held-up the Jenny Wren Café on Main Street. The suspect is described as 19-29 with a slight build and no taller than 5-foot-9.Police say he had a dark buzz cut, acne, and was wearing a red Ecko hooded sweatshirt.If you have any information on the robbery call Springfield Police.More >>
    Springfield Police need your help to find an armed robber. They say yesterday a white man carrying a semi-automatic handgun held-up the Jenny Wren Café on Main Street. The suspect is described as 19-29 with a slight build and no taller than 5-foot-9.Police say he had a dark buzz cut, acne, and was wearing a red Ecko hooded sweatshirt.If you have any information on the robbery call Springfield Police.More >>
  • Arlington man facing an animal cruelty

    Arlington man facing an animal cruelty

    Friday, April 25 2014 12:03 AM EDT2014-04-25 04:03:45 GMT
    An Arlington man is facing an animal cruelty charge after police say they found a dead dog on this property.It happened at 2760 VT Route 313. Troopers were at Rick Thompson's home investigating a burglary involving a wood burning stove when they discovered the dog. Thompson told police the dog died from kennel cough but a vet later determined the dog had been starved to death. The 47-year-old is due in court next month.More >>
    An Arlington man is facing an animal cruelty charge after police say they found a dead dog on this property.It happened at 2760 VT Route 313. Troopers were at Rick Thompson's home investigating a burglary involving a wood burning stove when they discovered the dog. Thompson told police the dog died from kennel cough but a vet later determined the dog had been starved to death. The 47-year-old is due in court next month.More >>
  • Senator Sanders pushes for better access to primary care

    Senator Sanders pushes for better access to primary care

    Friday, April 25 2014 12:06 AM EDT2014-04-25 04:06:48 GMT
    Senator Bernie Sanders is pushing for better access to primary care for patients in Vermont and across the country.More >>
    Senator Bernie Sanders is pushing for better access to primary care for patients in Vermont and across the country. More >>
  • Burlington School budget one step closer to re-vote

    Burlington School budget one step closer to re-vote

    Friday, April 25 2014 12:09 AM EDT2014-04-25 04:09:20 GMT
    A new Burlington School Budget is one step closer to a re-vote in the Community.The Burlington School board voted in favor of a 67.4 million dollar budget. Dozens of parents and voters turned out Thursday night for public testimony on their thoughts and concerns on the new more expensive budget. A recent audit uncovered a 2.5 million dollar deficit forcing the board to slash about 2.5 million dollars in programming and staff. This new budget is 600-thousand dollars MORE than what was voted do...More >>
    A new Burlington School Budget is one step closer to a re-vote in the Community.The Burlington School board voted in favor of a 67.4 million dollar budget. Dozens of parents and voters turned out Thursday night for public testimony on their thoughts and concerns on the new more expensive budget. A recent audit uncovered a 2.5 million dollar deficit forcing the board to slash about 2.5 million dollars in programming and staff. This new budget is 600-thousand dollars MORE than what was voted do...More >>
  • Robber hits the same bank twice?

    Robber hits the same bank twice?

    Thursday, April 24 2014 7:01 PM EDT2014-04-24 23:01:18 GMT
    A security guard and bank manager at the People's United in St. Albans held a would-be robber until police arrived. And investigators think he is the same man who robbed the bank Monday.More >>
    A security guard and bank manager at the People's United in St. Albans held a would-be robber until police arrived. And investigators think he is the same man who robbed the bank Monday.More >>
  • Man shot by Vt. cop faces charges

    Man shot by Vt. cop faces charges

    Thursday, April 24 2014 7:31 PM EDT2014-04-24 23:31:24 GMT
    A man shot by an officer inside the Bennington police station faces charges of aggravated assault with a deadly weapon.More >>
    A man shot by an officer inside the Bennington police station faces charges of aggravated assault with a deadly weapon.More >>
  • Man charged in Vt. teacher killing wants confession tossed

    Man charged in Vt. teacher killing wants confession tossed

    Thursday, April 24 2014 2:29 PM EDT2014-04-24 18:29:39 GMT
    A Vermont man charged with killing a popular St. Johnsbury teacher is asking a judge to exclude from his upcoming trial a detailed confession he gave to police investigators.More >>
    A Vermont man charged with killing a popular St. Johnsbury teacher is asking a judge to exclude from his upcoming trial a detailed confession he gave to police investigators.More >>
Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and WCAX. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service.