Luxe Austin Homes - finance

"APR vs. Interest Rate: What’s the Difference Between These 2 Mortgage Terms?"

Realtor.com shares "APR vs. interest rate: What’s the difference? If you’re applying for a mortgage, these are two financial terms you need to understand. APR stands for “annual percentage rate,” or the amount of interest on your total loan that you’ll pay annually over the life of the loan. It’s slightly different from the interest rate, which is the cost you’ll pay each day based on your mortgage balance.

These terms might be foreign to you, especially if this is your first time buying a home. But don’t worry—we’ll break down what each one is so that you’re ready to be a savvy mortgage shopper. Let’s first start by discussing the mortgage interest rate.

What is a mortgage interest rate?

Simply put, the interest rate is the cost you will pay…

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"Is a Mortgage Pre-Approval Letter Necessary to Make an Offer on a House?"

Realtor.com explains, "the short answer is no. However, if you want your offer to be taken seriously and to stand out from any competing bids, this little piece of paperwork can really give you the edge.

“While you do not ‘need’ a pre-approval letter from your lender in order for your offer to be accepted, I highly recommend all of my buyers present it,” says Denise Shur, a Realtor® with 1:1 Realty in San Jose, CA. In fact, “I do not look for homes with my buyers until they have a pre-approval letter from their lender. To me, it’s that important.”

What is mortgage pre-approval?

Basically, a mortgage pre-approval letter is a guarantee from a lender that it’s willing to finance your home purchase up to a certain dollar amount, based on…

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"How To Buy a Home Without a 20% Down Payment"

Realtor.com writes, "one of the first things you’ll hear when you start considering homeownership is that even with a mortgage, you’ll need a hefty chunk of change upfront. Most financial planners recommend putting down a 20% down payment.

On the current national median home price of $420,000, that comes to $84,000. And that’s serious money.

But if you don’t happen to have that kind of cash on hand, you’re not alone. Mortgage expert Bill Banfield notes that the most common barrier to homeownership isn’t being able to afford the monthly mortgage payment—it’s being able to save the down payment.

Thankfully, there are other ways to go about buying a home that doesn’t require you to put 20% down. Here’s a list of where you can find…

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"How to Get Rid of PMI: Tips to Ditch Private Mortgage Insurance Fast"

Realtor.com shares, "most people with private mortgage insurance want to know how to get rid of it. And for good reason: PMI tacks on a substantial extra fee to your already massive mortgage payments. Lenders traditionally require PMI for borrowers who put down less than 20% on a house. Of course, it’s a godsend if you couldn’t afford a home otherwise. But once you have PMI, is there any way to let it go?

For starters, let’s get one thing straight: “Mortgage insurance is neither good nor bad,” says Michael Brown, branch manager for Churchill Mortgage in Nashville, TN. “It can help people become homeowners who would not otherwise qualify because they don’t have 20% to put down. But in the long run, the removal of mortgage insurance could save home…

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"What Is an Origination Fee, and How Much Does It Cost?"

Realtor.com writes, "in the seemingly never-ending mortgage lexicon of home buying and selling, one term in particular stands out as a source of confusion: the origination fee. What is an origination fee? It’s something every homeowner needs to understand. And the good news is that it’s not actually that complicated.

In basic terms, an origination fee—sometimes referred to as a discount fee—is money that a lender or bank charges a client to complete a loan transaction. An origination fee can encompass a variety of different fees added together, says Mark Ventrone, owner and broker with ABLEnding, based in California and Arizona. It can include underwriting fees, administrative fees, processing fees, discount fees (also known as points), and any…

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"What Is an Assumable Mortgage? Major Savings If Your Loan Makes the Cut"

Realtor.co shares, "true to its name, an assumable mortgage a type of home loan where the buyer takes over the seller’s mortgage, rather than applying for a new loan. Assumable mortgages offer an array of advantages over traditional loans, but not all mortgages can be passed along in this manner. Here’s how to tell if an assumable mortgage is something you should consider, as a homebuyer or seller.

What to know about an assumable mortgage

Conventional loans are not eligible for assumption; they require the loan be paid in full—and a new one issued—whenever a property is sold or transferred to a new owner.

The three types of loans that are assumable include the following:

• FHA loans: These loans are backed by the Federal Housing…

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