The Real Estate Team of Sandee Abern and Clint Wolf
Helping Lake and Cook County Illinois home buyers and sellers for over 20 years!
Frequently Asked Questions About Mortgages
Q: What is normally included in each mortgage payment?
A: Normally a monthly mortgage payment mainly pays off your loan's principal and
interest. However, many lenders also include local real estate taxes, homeowner's
insurance payments and, if applicable, mortgage insurance.
Q: What factors affect mortgage payments?
A: The interest rate on your loan, the size of your loan, the length of your loan (normally
15 or 30 years), the taxes on your home, whether or not you have
mortgage insurance, etc.
Q: How does the interest rate factor in securing a mortgage loan?
A: A lower interest rate allows you to qualify for a larger mortgage, and therefore
a larger or nicer home. On the other hand, if you buy a less expensive home, with
a lower interest rate, your monthly payments will be more reasonable.
Q: What happens if interest rates drop and I have a fixed rate loan?
A: If rates drop substantially, you may want to investigate refinancing. Before
you do, we recommend that you talk to your accountant and a qualified,
experienced lender to see how much you will save on your monthly
mortgage payments.
Q: What are discount points?
A: Discount points allow you to lower your interest rates. They are essentially
prepaid interest, with each point representing 1% of the total loan amount.
Generally, for each point paid on a 30 year mortgage, the interest rate
on the loan is reduced by 1/8th of a percentage point.
Q: What is an escrow account?
A: An escrow account is usually set up by your lender when you take out a mortgage.
It is a place to set aside a portion of each monthly payment to cover charges
for homeowner's insurance, property taxes, mortgage insurance, etc.
Q: Can I pay off my mortgage loan ahead of schedule?
A: Usually you can. By sending in extra money with your payments, or making extra
payments, you can accelerate the process of paying off your loan. When you send
in extra money, you should indicate that you want the money applied towards
the principal. Keep in mind, however, that some lenders do not allow
pre-payments, and even if they do, they may charge a
pre-payment penalty.
Q: Are there special mortgages available for first time home buyers?
A: Yes. Good lenders will offer affordable mortgage plans that are specifically
aimed at helping first time home buyers buy their first home. Many lenders
also have special mortgage plans that help people who have some blemishes
on their credit, have been on their job a short time, have a small
down payment, etc.
If you need the name of an excellent lender, please click here.
Get in touch with Sandee and Clint by clicking here.
*Please note: the information on this page is believed correct, but the information's accuracy
is NOT guaranteed. We strongly recommend that you consult with a mortgage professional
and your accountant before you make any home financing decisions!