Mortgage Center FAQ

Q: What are Points and will I have to pay them when buying a house?

Points are up-front interest charges paid to the lender that allow you to lower your interest rate. They are essentially prepaid interest, with each point equaling one percent of the total loan amount. Paying points makes sense if you plan to stay in your home for several years, because the amount you save with a reduced interest rate increases every year you hold the mortgage. Points paid on a mortgage loan for the purchase or improvement of a home and secured by a personal residence are deductible in the year paid.

Q: What is included in my monthly mortgage payment?

The two primary components of your mortgage payment are principal and interest, but most lenders include real estate taxes and homeowner’s insurance as well. If your down payment is less than 20 percent, you may also be required to pay private mortgage insurance that protects the lender against default.

Q: Can I qualify for a home if I have bad credit and don’t have much money for a down payment?

You may be a great candidate for one of the federal mortgage programs that are available. Because Steve is well-versed in all different types of mortgages available, he will be able to help you understand the mortgage options that are available to you, and will walk you through the lending process.