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Mabel Said:

In general (not at the moment!) why are mortgage interest rates so low?

We Answered:

A mortgage is supposedly a secured debt. The bank can theoretically get their money back even if the borrower fails to pay their debt. Credit cards are unsecured debt and banks frequently get stuck holding the bag. So they charge much more. Clearly there's a big penalty for not keeping up one's payments.

Mathew Said:

what are 2 advantages and disadvantages of option A mortgage compare to option B mortgage?

We Answered:

google mortgage ammortization schedule
Start your answer with an example like a $200,000 house.
You will probably come out even in costs at the end of those two mortages.

But, please add to your answer at the bottom that if you get option B with the lower interest rate, you can always pay off the house early and come out ahead.
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Sarah Said:

What are 2 disadvantages of option A mortgage compare with option B mortgage?

We Answered:

Using the basis for this comparison, I am using $100,000 as the home price
Option A, borrowing $80k, @ 5.4% for 20 y, monthly payment $543.12
TTL payments $130,347.34
TTL interest $50,347.34

Option B Borrowing $75k, @ 4.8% for 25 y, monthly payments are $427.70
ttl payments are $128,312.49
TTL interest is 53,312.49

With option A yes you pay higher monthly, but THREE good things are less down payment, you pay less in interest ($2965.15), and you are out of the mortgage 5 years earlier.

This will be the same type of savings for any amount of mortgage, just the numbers will change proportionally. Do you also know you can put more to the principle at any time and save a great deal more of time and interest?

Joyce Said:

how do i compare mortgage companies rate without each of them pulling my credit?

We Answered:

depends on your down payment and if it's 30yr fixed.
banks have huge overheads they need to pay....their loans may be slightly higher than a mortgage company.

if you have a loan over 200k...and putting at least 5% down...you should get 6.375 with 1 origination fee.

Cynthia Said:

Best Mortgage Company for a first time home owner with fair credit.?

We Answered:

Paul - making a decision on lenders is tough - there's so many that seem to have enticing offers. What is most important to realize is that you need to be working with a large national lender right now. With the recent credit crunch and all the changes in the market, lots of companies are showing they do not have what it takes to stick around. If buying a home is important, make sure you're working with a company that has shown their stability and resilience.

You'll also want to get an approval going before you start house hunting. A good lender will ask you a lot questions about your income, assets, credit and the types of properties you are interested in. Make sure you tell them what kind of payment you're comfortable with and they should be able to put together a couple options and get you the seal of approval you need to start shopping for your dream home!

For first time home buyers with fair credit, you might want to look at FHA programs. The guidelines with regards to income and credit are a bit more flexible than traditional programs. They also only require a 3% down payment.

I included a couple links to help get you started. You can contact me directly if you have any more questions!!

Felix Said:

What are the pros and cons of a fixed rate mortgage vs. an adjustable rate?

We Answered:

A fixed rate mortgage is a mortgage in which the monthly principal and interest payments remain the same throughout the life of the loan. The most common mortgage terms are 30 and 15 years. With a 30-year fixed rate mortgage your monthly payments are lower than they would be on a 15 year fixed rate, but the 15 year loan allows you to repay your loan twice as fast and save more than half the total interest costs

While an adjustable rate mortgage or ARM is a loan in which the interest rate is periodically adjusted, moving higher or lower in the same ratio as a pre-selected index such as Treasury bill rates. ARM loans may include caps on interest rate increases in a given time period, and over the life of the loan, and may include limits on the frequency of interest rate adjustments. ARM loans generally have initial below market interest rates in return for the borrower sharing the risk that interest rates may rise during the life of the loan.