Welcome!




Expand Your Education with These Courses from
Bundle 3: CIPS Institute (US Version).
Accredited Buyer’s Representative.
BPOs: The Agent’s Role in the Valuation Process.
A Consumer Advocate Approach to Real Estate: Course 1.
Expand your education through NAR’s REALTOR® University: A Consumer Advocate Approach to Mortgages: Course 2.

Consumer News and Advice Archive


Is private mortgage insurance always required on low-down payment loans?

Lenders require private mortgage insurance (PMI) on most loans with less than a 20 percent down payment. They believe there is a correlation between borrower equity and default. They have found that the less money borrowers put down, the more likely they are to default on a loan. PMI guarantees ...


Do builders provide financing?

Many builders offer financing incentives to help move more buyers into a project. In fact, major building companies often have their own mortgage brokerage subsidiaries, while many other builders routinely refer buyers to "preferred" local lenders. If it is a buyer's market in your area, you can be sure developers ...


What about Freddie Mac?

Freddie Mac, Fannie Mae's counterpart, also offers low or no-down-payment home loans through partnerships it forms with various state governments to expand homeownership opportunities across the country, particularly for those persons with low or moderate incomes. ...


How can Fannie Mae help homebuyers?

The Fannie Mae Community Home Buyers Program lets first-time buyers with little cash obtain 95 percent financing. Borrowers may put down as little as 3 percent of their own money, with a 2 percent gift from family, a government program, or nonprofit agency, and obtain private mortgage insurance to protect ...


What are mortgage credit certificates?

A mortgage credit certificate, or MCC, makes it easier for eligible buyers to qualify for a mortgage loan. Offered by many city and county governments, they allow first-time buyers to take advantage of a special federal income tax write-off. ...


Can you tell me more about FHA and VA?

The Federal Housing Administration (FHA) is an agency within the Department of Housing and Urban Development (HUD). Its main goal is to help provide housing opportunities for low- to moderate-income families. FHA has single-family and multi-family mortgage programs but does not generally provide mortgage funds. Instead, it insures home loans ...


Do government programs exist that can help me finance a home?

Yes, although many are designed to assist first-time homebuyers, generally defined by lenders as people who have not owed a home in three years. ...


Is a home equity line of credit similar to a second mortgage?

A home equity loan, like a second mortgage, lets you tap up to about 80 percent of the appraised value of your home, minus your current mortgage balance. But because it is set up as a line of credit, you will not be charged interest until you actually make a ...


What is a second mortgage?

It is a loan against the equity in your home. Financial institutions will generally let you borrow up to 80 percent of the appraised value of your home, minus the balance of your original mortgage. ...


What is amortization and negative amortization?

When you amortize a loan you basically pay off the principal by making regular installment payments. This typically takes place gradually over several years. ...


What are subprime loans?

Subprime mortgages are made to borrowers, usually at a higher interest rate, who do not meet traditional credit criteria or who have unconventional borrowing needs. ...


What is a prepayment penalty?

Some mortgages have prepayment penalties written into them. This means you will have to pay the lender a percentage of the principal, or some other stated amount, if you decide to repay the loan early. ...


What is private mortgage insurance?

Also referred to as PMI, it is insurance you pay to protect the lender in case you default on the home loan. It is required when borrowers put down less than 20 percent of the purchase price. ...


What about equity?

It is the cash value of your property over and above what is owed on it, including mortgages, liens, and judgements. ...


What is a loan-to-value ratio?

The loan-to-value ratio, or LTV, is the loan amount expressed as a percent of either the purchase price or the appraised value of the property. It is an important factor considered by lenders before approving a mortgage. ...