A mortgage is far more than a simple loan to purchase a home; it is a decades-long financial partnership that requires thoughtful, proactive managemen...
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The decision between a 15-year and a 30-year mortgage is one of the most significant financial choices a homebuyer can make, setting the trajectory fo...
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The choice between a 15-year and a 30-year mortgage is one of the most significant financial decisions a homebuyer or refinancer will make. This decis...
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The journey to homeownership is often symbolized by the quest for the perfect mortgage rate, but the financial responsibility extends far beyond that ...
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In the ever-evolving landscape of real estate financing, an often-overlooked option presents a unique opportunity for both buyers and sellers: the ass...
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A balloon mortgage can appear as an attractive, low-cost entry into homeownership, but it carries a unique set of financial risks that borrowers must ...
Read MoreAn appraiser will assess the property’s overall condition, size (square footage), number of bedrooms and bathrooms, layout, and any upgrades or renovations. They also note any health or safety issues, as well as the quality of construction. They will photograph the interior and exterior and sketch the floor plan.
A significantly better interest rate or lower fees becomes available.
Your current lender is unresponsive, slow, or provides poor customer service.
Your loan application is denied by your initial lender.
You find a loan product that better suits your financial needs (e.g., switching from an FHA to a Conventional loan to remove PMI).
Your loan officer leaves the company, and you lose confidence.
Automatic termination only happens when you reach the 78% LTV milestone based on your original amortization schedule. It will not happen automatically if you reach 80% LTV early through extra payments or if your home’s value increases; you must proactively request cancellation in these scenarios.
Pros:
Massive savings on total interest paid.
Build equity very rapidly.
Loan is paid off in half the time.
Typically comes with a lower interest rate.
Cons:
Much higher monthly payment.
Less flexibility in your monthly budget.
Ties up more cash that could potentially be invested for a higher return.
Lenders often set up an escrow account to hold funds for future property-related expenses. At closing, you may need to prepay several months of property taxes and homeowners insurance into this account to ensure there is a cushion to pay these bills when they come due.
