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Consumer News and Advice Archive


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. ...


What is APR?

The annual percentage rate, or APR, is an interest rate that differs from the loan rate. It is the actual yearly interest rate paid by the borrower, including the points charged to initiate the loan and other costs. ...


Is it possible to refinance following a bankruptcy?

It can be difficult to do after a bankruptcy, unless you are willing to pay very high interest rates and fees. However, if you are contemplating bankruptcy, first talk with your lender and explain your situation. If your mortgage payments are current, the lender may be accommodating and refinance your ...


Can I refinance a home loan more than once?

You most certainly can. During the most recent refinancing boom, for example, many homeowners refinanced their home loans two or three times within relatively short periods of time because interest rates kept treading downward, making it extremely attractive to trade in one loan for another. ...


When is the best time to refinance?

Many people flock to refinance while mortgage interest rates are low, particularly when rates are about two percentage points below their existing home loans. ...


How does refinancing work?

With a refinancing, you pay off an old loan on your home and take out a new one, usually at a lower mortgage interest rate. To refinance, you will generally need to have equity in your home, a good credit rating, and steady income. You can borrow a percentage of ...


In seller financing, how does the seller determine what rate to provide?

The interest rate on a purchase money note is negotiable, as are the other terms in a seller-financed transaction. To get an idea about what to charge, sellers can check with a lender or mortgage broker to determine current mortgage rates on loans, including second mortgages. Most interest rates, however, ...


Are 40-year mortgages a good idea?

The main reason buyers sign on for these type of loans, which add 10 years to the traditional 30-year mortgage, is to take advantage of smaller monthly payments. ...


Remodeling Activity Rises Slightly In Third Quarter

RISMEDIA, Dec. 7, 2007-Remodeling activity held up well during the third quarter of 2007, according to the National Association of Home Builder's (NAHB) Remodeling Market Index (RMI). The current market conditions indicator increased slightly to 46.2 from 44.8 in the second quarter. And the future expectations measure comes in at ...


Which is better, a 15-year or 30-year loan?

The 15-year mortgage offers you a chance to save a lot of money over the life of the loan. This is because the amortization is half that of the 30-year loan, which means that the total interest paid on the 15-year note, as compared to a 30-year note, is significantly ...


What determines how adjustable-rate loans change?

They go up and down with interest rates, based on several esoteric money market indices that cause the cost of funds for lenders to vary. The most popular indices include Treasury Securities (T-Bills), Cost of Funds (COFI), Certificates of Deposit (CDs), and the Libor, which is the London inter-bank offering ...


Should I avoid an adjustable rate mortgage?

Because adjustable rate mortgages, or ARMs, fluctuate with the market, they offer less stability than fixed-rate loans. If an ARM is adjusted upward, monthly payments will increase, and for a lot of people that can be too big a risk to take. On the other hand, should rates drop dramatically, ...


Why do most homebuyers prefer a fixed-rate mortgage?

Long-term, fixed-rate mortgages are preferred by most homebuyers because they offer security and stability. The interest rate does not fluctuate over the life of the loan, so the total amount of principal and interest always remains the same. The monthly payment can change, however, if local property taxes, which are ...


Are interest rates negotiable?

It depends who you negotiate with. Some lenders are willing to haggle on both the loan rate and the number of points, but this is not typical among more established lenders. ...