Zillow Mortgage Calculator, All You Need To Know
So, you’re ready to buy a house. You prepared your finances, and you’ve saved up for a down payment. you’ve budgeted the cost and curveballs of homeownership. Now you’re on Zillow night and day searching for the right home for you. And maybe even starting to tour a few finalists. This is so exciting. All that’s left is getting a mortgage. Or where do you start? If this intimidates you, you’re not alone. Luckily, you’re here with Me today for Ask Zillow, anything presented by Betterment so that you can learn how to approach this very important and often confusing step toward homeownership.
How Home Loans Work And How To Get One Using Zillow Mortgage Calculator
If you’re confused about mortgages, or where to start with the lender, you’re not alone. As I said, it can feel pretty daunting to many of us. And that feeling is no surprise for Zillow, Premier agent partners, who often find themselves juggling the complexities of mortgages along with their clients.
I Have Some One How Is A Mortgage Agent lool At What He Is Saying
My name is Micah Harper. I’m the broker for exquisite properties in San Antonio. So I had a client who forgot to mention that they already owned the house to their lender. And so we found that out just before closing and the lender had to of course adjust their debt-to-income ratios and their expenses to make sure they can still afford both houses. And they had to rush and get the house at least that 24 hours to get at least or we weren’t going to close and they weren’t going to be able to close but they did it and say we were able to get it closed.
That’s a hard story to listen to. But it’s a good lesson to learn. It seems like there’s a tonne to learn on this topic. Luckily, we’ve got a great expert on hand from Zillow Home Loans Zelos affiliate mortgage lender.
What is a mortgage?
A Mortgage is a specific type of loan related to a purchase of the real estate. When you look at the purchase home, and you don’t have the cash to purchase it outright, you’re going to want to talk to a lender in order to get a mortgage to cover the difference in what you pay upfront, which is your down payment and the total sales price of the home. This mortgage loan will be secured by the property you’re looking to purchase.
What is a conventional loan?
So first off, you’ll hear about a lot of different types of mortgages out there, the first one will be conventional. So it comes in two types conforming and non-conforming. conforming, which has a maximum loan amount that’s set forth by Fannie Mae and Freddie Mac, which are the entities that provide the backing for these conforming loans. Another type you’ll hear will be nonconforming loans. They’re less standardized and vary widely from lender to lender.
What is an FHA loan?
The other type here will be FHA loans, which allow for low down payment options as low as 3.5% lower credit score options than conventional loans. And they also have a maximum loan amount limit that varies from county to county.
What is A VA loan,
VA loans is insured by the Veterans Affair. They’re there for service members who are eligible for the options of 0% down other types you hear as well, too. From these types of loans, you’ll also have different types of loan terms, you’ll have a fixed rate option, or you’ll have an adjustable rate mortgage option. A fixed-rate option just means that the rate is fixed for the life of the loan.
Meaning Of Arm in Zillow
An adjustable-rate mortgage is a mortgage where you have an initial number of years that are fixed on that interest rate and followed by a frequency of the interest rate that can adjust after that fixed period. The first number that it shows will let you know how long that fixed period will be. And then the second number afterward will let you know how often it’s meant to adjust.
For example, if you have a five-six arm, this means that for five years your initial interest rate will be fixed. After that, the interest rate will adjust every six months. The most common fixed periods you’ll see are 357 and 10 years and six months is the most common adjustment period.
Okay, wow. Lots of options. I’m going to need a little refresher on that. And I bet many of you are to Zillow has a couple of great resources to go deeper on mortgages.
The first is our home buying guide, which I’ve talked about in previous episodes. Seriously, guys, it has so much great info, so you definitely have to check it out.
The second is ILS mortgage Learning Centre. This resource covers all of the types of mortgages He mentioned with more information, plus a handy glossary for all of these terms. You only see when it comes time to get a loan. If you fill in over your head a little, that’s okay. That’s why we have professionals to help guide us. Another confusing layer to mortgages is all the acronyms. It’s like alphabet soup, an RM, P and I, APR, LTV, CC,
some of the common acronyms buyers will hear when they’re preparing to get a mortgage?
you’re absolutely right. There is a tonne of acronyms out there, it almost is its own language. So the first one you’ll hear that is super common will be principal and interest. So principal is the amount of the mortgage that you’ll have to pay back, your monthly payment will include a portion of that principal, and every little bit as you’re making those payments will help pay down the balance, then there’s also interest, interest is also included that payment, and it starts to pay the bank their fees, their costs for what you’ve marked, and principal and interest when we talk about it together, it makes up your total loan payment, you might see this as P.I.T.I which stands for principal, interest, taxes, and insurance. These are the four main parts of a mortgage payment every month.
What APR Mean?
APR, that’s another thing, you’ll hear quite a bit that pairs a lot with the interest rates. So the APR is going to take into the calculation of the interest rate, and the lender fees that are associated with it. And any points that you have to pay for the rate that you choose. The biggest thing to keep in mind when you’re out there shopping for rates or shopping who you want to go with your mortgage is to consider what the interest rate is, and what the APR is. A good rule of thumb is further they are apart, the more you’ll know, there might be some more lending fees and points.
What Is All About The Acronym Tip?
Total interest percentage, this is something that comes up not as often, but it’s still very, very good to know. But basically what it means is that it takes into account the interest that you’ve been paying over the life of the loan. So for example, if you had a 30-year loan, the interest rate at 5%, will take into account the total amount that you’ll pay over the life of those 30 years.
What is LTV,
what loan to value is also known as LTV, this will be the loan amount that you choose to borrow versus the value of the home. That’s what will make up your loan to value percentage. So for example, if you are looking to put 3% down on your new home, your loan to the value of the home will be 97%
What is PMI?
So private mortgage insurance that’s available for you. So the great news about private mortgage insurance that allows for people to buy a home without having to put 20% down. So private mortgage insurance is available to you. If you’re looking to put less than that, whether you’re putting 15,10,5 even 3% down, private mortgage insurance will be included, whether you’re paying it monthly or upfront, depending on the loan that you choose to get.
What Should They Look for In A Lender And How Can You Compare Them
When you are out there looking for your mortgage, you will end up running into two different types of lenders you’ll If you’re a mortgage lender, or you’ll have a
• Mortgage broker,
• Mortgage lender
Mortgage Lender
Is someone who works for a bank, or a financial institution. And they’ll be originating a loan for you from beginning to finish.
Mortgage Brokers
Mortgage brokers are going to be people who have access to multiple lenders. And in a way, they’ll be acting as the middle person as they find you the best spray with the best program, you mean, you’re not going to be working directly with them, but they’ll be finding you the best option possible. A really great place to start is with a personal referral, someone that you trust, it really all depends on what’s most important to you, what you want to look for because the mortgage process or just buying a home is so complex, you want to find someone who’s going to be an educator, and advisor and an advocate for you
What Are the Major Differences Between A National And A Local Lender?
National Lender
The differences between a national and a local lender really will be national lenders will have the ability to go across the US and know all types of markets. And so their knowledge between a competitive market and a slower market, they’ll have an expansion of the knowledge in different areas.
Local Lender
A local lender will be more specific to your hometown. And there’ll be more specialized in what’s in your backyard.
What are some good questions to ask lenders?
Some great questions to start with is what type of programs do you have available for me? Do I have to put 3% down or are there options for low down or no down payments? And also, it’s really important just to let that person know that this is the first time you are a first-time homebuyer and that is there any other questions you should ask
You See that’s some really great info. Finding the right lender for you is so important. And just to call out, you can actually search for lenders through Zillow as a lender directory, just go to zillow.com/mortgages and select lender directory. We talked about most of what you need to prepare for a conversation with the lender in our very first episode of this series. As a reminder, here are some of the things you’ll want to be sure to have on hand or at least be ready to gather when kicking off those conversations. But there are actually even more steps you can take beyond pre-approval, including being pre-qualified and pre-underwritten. Let’s see, see explain
when looking to get pre-qualified this is sometimes the first step you can take this is the first question that you have how much can I afford? You’ll give some information about how much you make maybe some of the debts that you have out there and then there’ll be able to let you know what you could or can buy the next stage from there would be getting pre-approved. So pre-approve really means that you are getting in material verifying income assets and your credit. The steps in the process would be taking an application, verifying your income qualifying, or verifying your downpayment with bank statements. From there, your lender will take it back, do a file review and let you know what you can buy, and deliver you a pre-approval letter. Zillow Find a Local Mortgage Lender for a Home Loan or Refinance Zillow
Looking for a local mortgage lender? You can find a local lender in minutes who can help you get a mortgage for your new home or look for lower refinancing rates.