From: "Jorge Roque, ABR, ePRO, GRI" 
Newsgroups: alt.realestate.fsob
Subject: The Cost of Your Mortgage Loan
Date: Thu, 16 Dec 2004 08:18:45 -0500

The Cost of Your Mortgage Loan

            Money Isn't Everything

            When considering lenders, factor in the level of service they 
will provide throughout the loan process. I'll be glad to provide a list of 
lenders who have successfully helped clients in the past. I also suggest 
that you ask friends and family in the area for their recommendations.



The same care and consideration you give to finding the right house should 
be applied to your search for the right mortgage lender. For most 
home-buyers a major determining factor in selecting a lender is the cost of 
the mortgage loan. But how do you determine the cost of a mortgage loan?

Shopping for a Mortgage Loan

While most buyers concentrate on interest rates, it is best to look at all 
the costs associated with a mortgage loan. Mortgage loans include the quoted 
interest rate, points and closing costs.

More than Just Interest

A number of fees are associated with the mortgage loan, including:

  a.. Appraisal - A carefully documented opinion of value by a licensed, 
professional appraiser.

  b.. Credit Report - A detailed report of your credit, employment and 
residence history prepared by a credit bureau.

  c.. Principal - The amount owed on a mortgage which does not include 
interest or other fees.

  d.. Document Fees, Loan Fees and Processing Fees - Miscellaneous fees 
charged by the lender.

  e.. Discount Points - Points paid in addition to the loan origination fee 
to get a lower interest rate. (1 point = 1 percent of loan amount)

  f.. Origination Points - the total number of points paid by the borrower 
at closing. (1 point = 1 percent of loan amount)

  g.. Interest Rate - A percentage of a loan or mortgage value that is paid 
to the lender as compensation for loaning funds.

            Prepayment Penalty Mortgages (PPMs)

            These loans restrict your right to prepay part or all of the 
principal in the loans early years. A prepayment fee is charged by the 
lender to the borrower who wishes to pay part or all of the loan ahead of 
the regular schedule. The advantage of a PPM is that they often have a lower 
interest rate than other mortgages.



Using the Annual Percentage Rate (APR) to Compare Mortgage Loans

The APR was designed to help borrowers understand the relative costs of a 
mortgage loan. The APR takes into account the various fees associated with 
the loan, which is why it is often higher than the interest rate. Understand 
that not all lenders calculate a loan's APR in the same way. That is why 
this should be only one of the factors used in selecting the best mortgage 
for you.

Locking-in Interest Rates

Another factor to consider when selecting a lender is whether the lender 
will lock-in the mortgage's interest rate and points. Click here to learn 
more about lock-in options.



For More go to http://www.houseandbusiness.com

Jorge Roque, ABR, ePRO, GRI

Lic. Real Estate & Mortgage Broker (Miami, Florida)

(786) 487-2487