Real Estate Daily Blog

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• Credit unions, banks and mortgage companies offer mortgages. It is wise to know the terms offered by at least 5 lenders within your vicinity and include in your computation all other fees like closing costs to get the best terms.
• The interest paid in advance to lower the rate on a loan is called points. One point is equal to 1% of the mortgage amount.
• Typically, one point is 1/8 of 1% off the rate on a loan. Paying points to lower the rate on a loan rests on what the buyer considers important: lower monthly amortizations or higher closing costs; the planned length of stay in the property and how many points the buyer wants to shoulder. Points are usually tax deductible.
• A balloon is a type of mortgage that involves payment of the loan after a specific period. For loans with a term of 3-15 years, payments are the same. For loans longer than this term, the outstanding principal balance could be due in full or subject to refinancing. Usually,balloon mortgage rates are less 1/4% - 3/4% when you have anywhere between a 16 to 30-year fixed mortgages.