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RSSAlameda County Mortgage Rates
When you are mortgage shopping, there is a lot of talk about points and how much you have to pay for them. Most average consumers have no idea what points actually are and whether or not they need them to secure a mortgage. To put it simply, a point is a fee that is equal to one percent of the total loan amount. There are two types of points that are common on a mortgage. Origination points are used to cover the cost of obtaining the loan. These can be tax-deductible, so ask your lender what they are being used for. If they are used to cover closing costs, they are not deductible.
Discount points are paid to lower the interest rate on a mortgage. These serve as prepaid interest to lower the note rate on your mortgage. The more points you pay, the lower your interest rate. These points are entirely tax deductible. Deciding whether or not to pay points is a relatively simple decision. If you plan on staying in your home for a long time and you have the cash to pay the points up front, you should do so. If you are short on cash at closing time and only plan on staying in the home for a handful of years, then it is not necessary to pay any discount points on your loan.
FHA Mortgage Loans in Alameda County
The Federal Housing Administration was started in 1934 during the Great Depression. The goal was to help out struggling Americans by helping them to purchase homes. That is still the goal of the FHA today. The FHA is not a lending institution or a bank. The FHA encourages lenders to approve loans for less-than-desirable candidates by offering them insurance. If an FHA loan should default or go into foreclosure, the FHA pays the bank a premium. This insurance serves as an incentive for the banks to participate in this federal housing initiative. The FHA also offers a number of other programs such as down payment assistance. The FHA has helped 34 million people afford homes since its inception and is an excellent program if you are a first time homebuyer.
Alameda County Loan Modifications
The government and mortgage industry have been buzzing lately about loan modifications and whether or not they can help with the mortgage crisis. A loan modification is any change in the original loan agreement between a lender and a borrower. This could include anything from a change of term, rate, principle amount, and loan type. Loan modifications were designed to help homeowners that are in danger of falling behind in their mortgage payments, or maybe already have. The government has offered financial incentives to banks that seek out borrowers that are in danger of foreclosure and work through a modification. A modification is an easier alternative to going through the lengthy and damaging process of a foreclosure.