How Mortgages Work - MoneyTips

Home Buying, Simplified: 5 Steps with Helpful Resources

Nathan Grant — Tue, 01 Aug 2023 13:51:31 +0000

Buying a home can be overwhelming, especially for first-time buyers. That’s where we come in. We’ve broken down the process into five straightforward steps, including resources to help you complete each one. As the adage goes, “How do you climb Mt. Everest? One step at a time.” 1. Organize Your Finances Your first order of...

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Closing Costs: Breaking Down Who Pays for What

MoneyTips Writer — Thu, 20 Apr 2023 13:10:40 +0000

Purchasing a home can be an intense process, and one of the biggest hurdles comes at the end: closing on the home. From title searches to inspections and appraisals, a lot needs to happen before you get the keys. But who pays for closing costs, the buyer or seller? The short answer is it’s negotiable,...

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What Is a Fixed-Rate Mortgage and How Does It Work?

Andrew Paniello — Tue, 20 Dec 2022 15:12:24 +0000

Unless you have the resources to buy a home with cash, applying for a mortgage is the usual way most aspiring buyers purchase homes that would otherwise be out of reach. For most home buyers, taking out a mortgage is a clear path to homeownership. But what may not be so clear is the type...

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5 Most Common Mortgage Scams & How To Avoid Them

Jonathan Pressman — Tue, 08 Nov 2022 17:45:35 +0000

As a consumer in the real estate industry, an awareness of mortgage scams is crucial to protect yourself from falling victim to them. A mortgage scam is when someone intentionally misrepresents information for their own profit or benefit. There are dozens of different mortgage scams, which can be perpetrated by mortgage lenders, real estate agents,...

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Fannie Mae vs. Freddie Mac: What’s the Difference?

Amanda Petersen — Tue, 08 Nov 2022 15:37:01 +0000

If you’re in the middle of shopping for a mortgage (or will be soon), you’ll probably come across two companies: Fannie Mae and Freddie Mac. Ring any bells? Fannie Mae and Freddie Mac are home mortgage companies created by Congress that play an important role in the U.S. mortgage industry. The two federally backed institutions...

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What Is the Federal Funds Rate and How Does It Affect Your Mortgage?

Amanda Petersen — Mon, 31 Oct 2022 19:47:03 +0000

For many of us, the American economy has felt like a rollercoaster lately. Interest rate hikes have become the new normal, and you can’t seem to escape inflation in stores or on the news. If you’re trying to buy a house, you’re probably wondering how interest rates and inflation will affect your home buying aspirations....

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The Secondary Mortgage Market and How It Affects You

Jonathan Pressman — Mon, 31 Oct 2022 17:12:34 +0000

If you take out a mortgage on a home, you might be surprised to receive your first bill from a bank you’ve never worked with before. You can thank the secondary mortgage market for that. When you take out a home loan, your lender can sell the loan – and the rights to collect payments...

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What Is Loss Mitigation and How Does It Work?

Jonathan Pressman — Mon, 01 Aug 2022 16:03:06 +0000

Sometimes, life brings unexpected surprises that make it difficult or impossible to keep up with your mortgage payments. If that happens, a lender can foreclose on your property. Foreclosures are rarely the desired outcome for borrowers or lenders; they usually end up being costly and inconvenient for everyone involved. That’s exactly why loss mitigation exists....

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11 Common Types of Home Loans for Buyers and Owners

Jonathan Pressman — Thu, 28 Jul 2022 16:10:00 +0000

Like snowflakes, no two home buyers are alike. And there are different types of mortgage loans to accommodate different types of buyers and home refinances. But every mortgage option has its benefits and drawbacks. That’s why it’s important to find the best home loan for your unique situation. To begin our journey through mortgage options,...

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Mortgage Subordination, Explained

Josh Richner — Wed, 20 Jul 2022 15:10:37 +0000

If tapping into your home’s equity is in your future, so is a whole lot of paperwork. And whether you’re taking out a home equity loan or a home equity line of credit (HELOC) (both are types of second mortgages or junior liens), you may be presented with a subordination agreement to sign at closing....

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What Are Prepaid Costs When Buying a Home?

Josh Richner — Fri, 15 Jul 2022 15:32:41 +0000

We’d be surprised if you never heard anyone say that a home is the biggest investment you may ever make. It would be surprising given the validity of this widespread notion. Most home buyers begin their real estate journey parting with a sizable chunk of their savings and then taking out a mortgage to pay...

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Lien vs. Encumbrance: What’s the Difference?

MoneyTips Writer — Thu, 07 Jul 2022 20:14:18 +0000

Oddly enough, owning a home does not give you complete control over it. There may be a variety of limits or claims on your property rights, including liens and encumbrances. Liens and encumbrances are different – and understanding these differences will help shed light on the broader topic of titles and other legal matters around...

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