2007 August 18 | DROdio Real Estate: Ask The Agent Q&A Blog

Archive for August 18th, 2007

What is “Private Mortgage Insurance (PMI)”?

Saturday, August 18th, 2007

This information kindly provided by Richa Badami of Countrywide:

Do you know what mortgage insurance is? Many people confuse mortgage insurance with mortgage life insurance, mortgage disability insurance, or even homeowners insurance. These are all very different types of insurance - no wonder there is such confusion! Mortgage insurance is generally required when the down payment on a home is less than 20%, and it is designed to protect the lender in the event of loan default. The lower the down payment, the higher the risk for the lender, and this can mean a higher monthly mortgage insurance premium. Depending on the specifics of your information, there are ways in which mortgage insurance can sometimes be avoided at the time of purchase, or dropped altogether at some point in the future.
Richa Badami, CMPS Creating Wealth with Mortgage Planning.
Certified Mortgage Planner
The Badami Empower Mortgage Group
703-928-3030 Mobile
703-779-7042 Direct Office
866-409-3141 e-Fax

www.RichaBadami.com

What is the “APR”?

Saturday, August 18th, 2007

This information kindly provided by Richa Badami of Countrywide:

Do you know why there is a difference between the interest rate and the APR? The interest rate is, simply, the actual rate of interest that is charged on the principle balance of your loan. The APR is a complex calculation that was originally designed to help consumers understand the cost of the loan, inclusive of interest and certain costs associated with closing. The problem lies in the fact that the APR is easily manipulated by inexperienced or unethical lenders, and can be easily misunderstood by consumers. Many items are included in the calculation of the APR such as interim interest and mortgage insurance, which have nothing to do with the interest rates and closing costs charged by the lender. Due to some of these defects in the calculation, using only the APR to compare lenders is not always reliable.Richa Badami, CMPS Creating Wealth with Mortgage Planning.Certified Mortgage PlannerThe Badami Empower Mortgage Group703-928-3030 Mobile703-779-7042 Direct Office866-409-3141 e-Faxwww.RichaBadami.com

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