This Mortgage and Finance guide was developed by National Mortgage from our broad range of experience in the mortgage industry. This unique guide will provide you with detailed information to help you understand mortgage concepts. This mortgage guide is broken down into smaller topics including mortgage principles, Frequently Asked Questions (FAQ) and a detailed glossary of terms to make it easier for you to understand the mortgage industry from soup to nuts. We call it Mortgage Answers Primer (MAP) -- MAP to your new home.
Historically, mortgage information could be found in libraries in enormous books and publications written in sophisticated professional languages. As you can imagine these were difficult to read and understand so people were forced to rely on what "experts" would say or what their friends or colleagues would tell them. With the arrival of the Internet this information became available 24x7. Many websites have this information converted to an easily understood language. National Mortgage has done an excellent job in developing mortgage MAP to be user-friendly. It is a professional tool written in a simple language for all audiences.
Today it is as important to know the procedures and steps needed to obtain a mortgage as it is to understand how to buy a new home. You need to understand who you will need to work with and what their role and responsibilities are. You will also need to understand what documents are needed for the transaction. A good resource worth looking in to for information and even referrals is family, friends or colleagues. Remember those people who have been through the process of obtaining a national mortgage may have invaluable information and advice. This guide will help prepare you in applying for a mortgage and provides useful information to help you decide which mortgage works best for you.
Knowledge is Power! Go through each of the topics in this guide and try to get a good understanding of what you will need to do -- who to contact, what papers to obtain and what procedures to follow. Our MAP will guide and help you gain this power. When you are finished, you will be ready to apply for a mortgage for your dream home. You will feel as comfortable and confident as we do here at National Mortgage.
Mortgage Calculators
Mortgage Payment Calculator (PITI)This calculator will compute your Total Monthly Mortgage Payment, which consists of Payment, Interest, Taxes and Insurance (a.k.a. PITI), and Loan to Value Ratio (LTV) based on the property value, loan amount borrowed, loan term and annual interest rate. You can also specify to calculate annual property taxes and insurance.
Mortgage Payment AmortizationThis calculator will compute your Monthly Payment, the Total Interest you will pay over the term of the loan plus the total amount you will actually pay for borrowing the money. Simply input your information in to the required field. You can check "Show Amortization Schedule" box to see a breakdown of payments.
How Much Can I Borrow?You can use this calculator as a guide to determine what the mortgage companies will allow you to borrow and how much will you save on taxes. There are a lot of factors, of course, which will ultimately determine what your bank or mortgage company will allow you to borrow, but gross income and current debt payments are the most heavily weighted qualifiers.
How Much Income Do I Need?You can use this calculator as a guide to determine what the mortgage companies will allow you to borrow and how much will you save on taxes. There are a lot of factors, of course, which will ultimately determine what your bank or mortgage company will allow you to borrow, but gross income and current debt payments are the most heavily weighted qualifiers.
Bi-Weekly Mortgage PaymentUse this calculator to compute how much you will save by making 1/2 of your normal monthly payment every two weeks (bi-weekly) instead of making a full mortgage payment once a month. Bi-weekly payments accelerate your mortgage payoff by adding an extra 13th payment to your annual number of payments and splitting it up between 26 bi-weekly payments. This simple technique can cut years off your mortgage and save you thousands of dollars in interest.
Refinance CalculatorThis calculator will show the Monthly Payment and Total Interest and Refinancing Savings when you refinance your current mortgage at a lower interest rate. You can also request to finance Closing Costs to see how many months it will take to break even.
Should I Buy or Rent?This calculator computes the costs of renting versus the costs of buying a home. There are many things included in the calculation such as interest, property taxes, tax savings, appreciation, closing costs, etc. But comparing the cost of renting to the cost of buying is a lot more complicated. This calculator attempts to forecast the effects of all the hidden components so you can make an informed decision.
Mortgage Payoff GoalThis calculator will show how the additional monthly payment will help you to pay off your current mortgage within a specified number of years. It will also show your interest savings if you make an additional payment each month from now and until your mortgage is paid off.
Payment Breakdown Calculator
This calculator will help you to determine the principal and interest breakdown on any given payment number. Just enter the loan's original terms (principal, interest rate, number of payments and monthly payment amount) and the desired payment number to calculate principal and interest breakdown.
Missing Loan-Term CalculatorThe 4 loan terms are Principal, Interest Rate, Number of Payments Remaining and Monthly Payment. If you leave one of these terms empty (missing), this calculator will compute this 4th missing term. For instance, if you would like to find out the 'Number of Payments Remaining', just enter 'Principal', 'Interest Rate' and 'Monthly Payment' fields and click compute.
Mortgage Glossary - A - Accrued Interest
Interest earned but not yet paid.
Additional Principal Payment
A payment by a borrower of more than the scheduled principal amount due in order to reduce the remaining balance on the loan.
Adjusted Gross Income
A person's total income, as reported on his or her IRS 1040 tax return form, after allowable contributions, deductions and expenses.
Ad Valorem Tax
A tax based according to item value only, usually property tax based on the just or fair market value of the property.
Addendum
A change made to a contract.
Adjustable Rate Mortgage Loans (ARM)
Loans with interest rates that are adjusted periodically based on changes in a pre-selected index. These mortgage loans must specify how their interest rate changes, usually in terms of a relation to a national index such as Treasury bill rates. An interest rate cap limits the amount by which the interest rate can change.
Adjustment Period
On an ARM loan, the time between changes in the interest rate or monthly payment.
Agreement of Sale
Contract signed by buyer and seller stating the terms and conditions under which a property will be sold.
Amortization
Repayment of a debt with periodic payments of both principal and interest calculated to payoff the loan at the end of a fixed period of time.
Amortization Schedule
A timetable for payment of a mortgage showing the amount of each payment applied to interest and principal and the remaining balance.
Annual Percentage Rate (APR)
The cost of credit expressed as a yearly rate. The annual percentage rate is often not the same as the interest rate. It will be higher than the interest rate stated in the note because it includes in addition to the interest rate, loan discount points, fees and mortgage insurance.
Application
An initial statement of personal and financial information required to apply for a loan.
Application Fee
Fee charged by a lender to cover the initial costs of processing a loan application. The fee may include the cost of obtaining a property appraisal, a credit report and a lock-in fee or other closing costs incurred during the process or the fee may be in addition to these charges.
Application Fee
A sum of money paid towards estimated initial mortgage processing expenses such as appraisal and credit report.
Appraisal
A written estimate of a property's current market value completed by an impartial party with knowledge of real estate markets.
Appraisal Fee
A fee charged by a licensed, certified appraiser to render an opinion of market value as of a specific date.
