All Articles (page 9)
Frequently Asked Questions
Straight answers to the questions we hear most.
Lenders typically require an escrow account to protect their financial interest in your property. By ensuring that property taxes and insurance are paid on time, the lender prevents situations like tax liens (which take priority over the mortgage) or uninsured damage from a fire or storm, both of which could jeopardize the value of the property that secures the loan.
When inflation rises, central banks often raise interest rates to combat it. If you have a fixed-rate mortgage, your rate and payment are locked in and will not increase, even if new mortgage rates soar. You are effectively shielded from the impact of rising interest rates in the broader economy.
An escrow account is a holding account managed by your mortgage lender.
You pay a portion of your annual property taxes and homeowner’s insurance into this account with each monthly mortgage payment.
The lender then pays these large bills on your behalf when they come due.
This helps you budget for these expenses in smaller, monthly increments rather than facing one large annual bill.
You pay a portion of your annual property taxes and homeowner’s insurance into this account with each monthly mortgage payment.
The lender then pays these large bills on your behalf when they come due.
This helps you budget for these expenses in smaller, monthly increments rather than facing one large annual bill.
The Closing Disclosure (CD) is a five-page form that provides the final details of your mortgage loan. It includes the loan terms, your projected monthly payments, and a comprehensive list of all closing costs and fees. By law, you must receive this document at least three business days before your loan closing to give you time to review it.
The appraisal protects the lender by ensuring the property is worth the amount they are lending. If the appraised value comes in lower than the purchase price, the loan-to-value (LTV) ratio becomes riskier for the lender. This can lead to a renegotiation of the sale price, the borrower needing to bring more cash to close, or the loan being denied.
Get weekly rate updates and mortgage tips
Are you interested in learning more about mortgage brokers in your area? Tell us a bit about yourself and we'll point you in the right direction — no spam, unsubscribe anytime.