Low Rate Mortgages - Mobile Alabama, Low Rate Home Loans, Mobile Alabama

Locking your rate means committing to a specific loan program and structure at a specific interest rate for a specific period of time. As long as you close your loan before the expiration of that lock, we are committed to honoring the terms of that loan regardless of market activity. Rates can generally be locked anytime after the loan application has been made but no later than five business days before the scheduled closing date of your loan. Rates can be locked for varying periods of time.

Typical lock periods are 15, 30, 60, 90, 120, 150, and 180 days. As a general rule, the longer period of time you are locking in the loan for, the more expensive the loan will be either in terms of higher fees and/or a higher interest rate. Extended locks, typically used for new construction, often have some type of up front lock fee attached to them.

Rates are subject to change at anytime without notice and do tend to move up and down from day to day based on market activity so the big question everyone asks is "When is the best time to lock?"

The best time for you to lock depends on a couple of different variables including when you are scheduled to close on your loan, the affect a changing interest rate could have on your approval, and your tolerance for risk.

It is important to lock your loan for a period of time long enough to safely cover your closing date. In fact, we encourage you to lock for a period of time longer than your closing date in the event it is delayed for any reason. This is especially true with new construction. We typically recommend a lock that exceeds your expected closing date by 7-10 days.

We recommend that you think about and discuss with your loan officer what your lock strategy is going to be. Because an increase in rates will result in an increase in payment, you have to decide if the risk of waiting for a lower rate and having the rates go up is worth the reward of a lower payment if rates go down or ask your lender do they offer a float down on your lock. Most experts will tell you it is virtually impossible to time the market.

Because a shorter lock generally means a lower costs in a typical market where rates are not moving up or down significantly, a minor increase in rates will likely be offset by a shorter lock period. If rates stay the same or go down the shorter lock will also work in your favor, so the only risk in waiting to lock in for a shorter period of time is in an environment where rates go up dramatically. That is the environment where a bail out strategy makes sense.

Lenders are happy to share with you some historical data on rate movement and the rates and costs on various lock options so you can make a locking decision with confidence. Once your loan is locked the lender will send you a lock confirmation for your signature. That lock confirmation, signed by both parties, is their commitment to you to honor the lock and terms of the loan you locked and for the period of that lock.

The latest Senate proposal would drop the requirement that the credit be available only to first-time buyers, broadening the reach of the program but also adding to its cost, estimated by congressional analysts at $16.7 billion.

The backers of that idea, Sens. Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn., chairman of the Senate's banking committee, have suggested that their measure be attached to another pending bill aimed at throwing a lifeline to people hit by the recession, an extension of federal assistance to the millions in danger of exhausting unemployment insurance benefits.

The stimulus-package credit allows first-time homebuyers to reduce their federal income taxes by 10 percent of the price of a home, up to a maximum of $8,000 is set to expire Dec. 1.

The Isakson-Dodd proposal would extend the credit to June 30, 2010. It would also remove the first-time homebuyer requirement and raise the eligibility income limit to $150,000, or $300,000 for a couple. That's double the current phase-out limits.

Brookings Institution economist Ted Gayer wrote in a recent report that the tax credit is "very poorly targeted." He calculated that of the 2 million or more people who would make use of the credit if it were extended for a year and expanded to cover all buyers, only about 383,000 would be additional sales motivated by the credit. He estimated that the real cost of the credit would thus be more than $40,000, rather than $8,000, per buyer.

"Homebuyers for the past two years have been sitting on the fence and we needed something to move them into the market," said Lucien Salvant, managing director for public affairs at the National Association of Realtors. With more foreclosures coming next year, "to knock the props out of the housing market at this point would not be a wise move."

The NAR, together with the NAHB and the Mortgage Bankers Association, have been running ads in the Washington area urging Congress to extend the homebuyer tax credit.

Closing Costs are the fees incurred when you close on your transaction. A
good way to look at them is as the cost of borrowing money. Generally they are fees paid to different people for something they provided that was a requirement for the loan's approval or set up.

Here is a list of common closing costs and a brief description of what they represent:


Loan Origination Fee
The loan origination fee is the fee the lender charges to originate the loan, generally 1% of the loan amount. In some markets it is customary to not charge a loan origination fee. That generally means that the rate the lender is charging has been adjusted so they can generate the same income on the loan. Just as additional income can be paid to reduce the rate on the loan (see discount points below), a slightly higher rate will yield a premium the lender can use to cover the origination fee without charging the borrower out of pocket for it.

Discount Points
Mortgage loans when they are pooled into mortgage backed securities require specific yields or rates of return. If you want a rate lower than the prevailing rate you can obtain it by paying additional money up front to have the lender discount the note rate. Discount points, expressed as a percentage of the loan amount, are delivered with the loan to the investor as prepaid interest to offset the lower note rate on the loan and give them the same yield on the loan. Discount points are not a requirement and you are encouraged to talk to your loan officer about whether or not it makes sense to pay them to lower the rate on a loan.

Appraisal
The appraisal is an independent opinion of the value of the property by a licensed professional and is used to help determine the property's suitability as collateral for the loan.

Credit Report
A credit report is a detailed history of how all borrowers have handled their credit obligations including type, amount, payment, and payment history from all three major credit repositories. The credit report is used to make a lending decision.

Administrative Fee
This fee represents miscellaneous charges (like overnight delivery) the lender might incur while processing your loan.

Final Inspection
In new construction, the property is often appraised before construction has been completed. A final inspection is done by an independent third party to ensure that the property has in fact been completed to the plans and specifications for construction.

Attorney Fee
The attorney fee is the cost charged for the review of your closing documents by a licensed attorney.

Title Insurance
Title insurance is an insurance policy that protects the title of ownership on the property once you've bought it. In other words, it guarantees that subject only to your mortgage, there are no other claims against the property.

Settlement Fee
A settlement fee is the charge a title company or a settlement attorney would charge for presiding over a closing; making sure all the documents are signed correctly, all closing conditions of the loan are met, and the loan is appropriately recorded.

Recording Fees
Recording fees are the charge by the government recording entity for recording the change in ownership and the encumbrance of a mortgage on the property you purchase to make it of record.

Survey
The survey determines the physical boundaries of your property as well as identifies any encumbrances or easements that may create title issues.

Flood Certification
The flood certification is the certification by an independent third party that your property has been checked against the current federal flood zone maps and whether or not it is located in a flood zone.

The annual percentage rate (APR) is an interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account points and other credit costs. The APR allows homebuyers to compare different types of mortgages based on the annual cost for each loan. The APR is designed to measure the "true cost of a loan." It creates a level playing field for lenders. It prevents lenders from advertising a low rate and hiding fees.

The APR does not affect your monthly payments. Your monthly payments are strictly a function of the interest rate and the length of the loan.

Because different lenders calculate APRs differently, a loan with a lower APR is not necessarily a better rate. The best way to compare loans is to ask lenders to provide you with a good-faith estimate of their costs on the same type of program (e.g. 30-year fixed) at the same interest rate. You can then delete the fees that are independent of the loan such as homeowners insurance, title fees, escrow fees, attorney fees, etc. Now add up all the loan fees. The lender that has lower loan fees has a cheaper loan than the lender with higher loan fees.

The following fees are generally included in the APR:

• Points - both discount points and origination points
• Pre-paid interest. The interest paid from the date the loan closes to the end of the month.
• Loan-processing fee
• Underwriting fee
• Document-preparation fee
• Private mortgage-insurance

The following fees are sometimes included in the APR:

• Loan-application fee
• Credit life insurance (insurance that pays off the mortgage in the event of a borrowers death)

The following fees are normally not included in the APR:

• Title or abstract fee
• Escrow fee
• Attorney fee
• Notary fee
• Document preparation (charged by the closing agent)
• Home-inspection fees
• Recording fee
• Transfer taxes
• Credit report
• Appraisal fee

It's never fun to be turned down for a loan, but before you think you won't be able to get credit anywhere, there are some steps you can take.

Lenders are required by a federal law, The Equal Credit Opportunity Act, to tell you in writing when you've been turned down for credit. Two important pieces of information must be included in the letter you receive when you are denied credit:

• The specific reasons why you were denied credit (or information on how to obtain those reasons); and
• If a credit report was used in making that decision, the name and address of the credit reporting agency that supplied it.

If you don't understand the reasons given for turning down your application, ask for more information. Sometimes it can be hard to determine exactly why your application was not approved, because these decisions involve a lot of different factors. Don't be shy about asking, though, since the information you receive may help you improve your credit so you can qualify in the future.

You may be denied credit for various reasons, If your loan application was rejected because of insufficient income to afford the house you want or you have insufficient funds for closing costs and a down payment, you could consider loan programs for low- to moderate-income borrowers with lower down payment requirements, such as an FHA loan or VA loan.

If you requested the loan amount which is larger than the appraised property value, the loan will be denied. In this situation:

• You can try re-negotiate with the seller for the purchase price to lower the loan amount
• Make an additional down payment to cover the difference between the appraised value and purchase price
• If you think the appraiser undervalued the property suggest that the lender re-examine the appraisal

If your loan is turned down because of a poor credit report, you are entitled to a free copy of that report. You must request it within 60 days, so don't wait to order it. Read your report carefully to make sure it is accurate and complete.

Once you have a copy of your credit report, you should check for errors and fix any errors by disputing them with the credit report agency. If you believe that mistakes on your report led to the rejection of your application, you can ask the credit bureau to send a corrected copy to the lender. Follow up with the lender to find out if your application can be reevaluated.

Finally, you can try again. All lenders have different approval standards. Just because you didn?t get a loan from one financial institution doesn't mean you can't get one somewhere else. Try again with another company. Just don't apply for more than four or five loans in a six-month period.