Mortgage Basics

If you are a new borrower or if you have owned many homes, the wealth of information - and misinformation - about mortgages in today's market can feel overwhelming. Knowing where to start and how to find accurate information can make or break your home buying experience.
Learn all you can about current mortgage financing before you apply with a lender to avoid unpleasant and potentially costly surprises. Be well informed about things like:

Appraisals
Recent legislation called the Appraisal Independence Rules (AIR) has changed the appraisal process. Lenders are prevented from influencing appraisers as to the value of a property and appraisers are usually conservative in their estimates. With declining home values, many homes are not worth what you might expect.

Credit Scores
Requirements for a good credit "FICO" score have gotten much tighter. Many loans require a 660 score or higher, although some programs are available for borrowers with lower scores. Check your credit before you apply for a loan, and talk with your lender about programs that might work for you if your credit is less than ideal.

Interest Rates
Interest rates can change quickly. We've enjoyed recent times of record low rates, allowing many people to refinance or buy a home and save thousands. Nevertheless, the financial markets are still somewhat uncertain and unexpected financial news may trigger a major swing in the markets.