Category Archives: Home Mortgage Loan Company

Buy Downs

The interest rates are lowered by the seller of a home. He/she does it to sell a house and give the buyer a good deal, so he/she decides to purchase the home. The seller of the home pays the home mortgage loan company the difference that the lowered interest rate would cause. In this way, the mortgage company doesn’t lose any money to lower the interest rate for the purchaser.

An example of a buy down would be a 2-1-1 buy down, which means that the sellers “buys down” the interest rate. He/she buys it down 2% the first year, 1% the second year, and 1% the third year. After that, the interest becomes at the home mortgage loan company or lender’s doing. 

Escalating/Non-Escalating

Escalating/Non-Escalating

Escalating and non-escalating are terms used to describe the interest rate in home mortgage loans. They can also refer to other aspects of a loan, but most of the time, they refer to interest rates. 

If escalating refers to the interest rate, then a home mortgage loan is said to have an escalating clause, if in the contract, it states that the interest rate can fluctuate (such as in an adjustable rate home mortgage loan). The federal law does not govern these clauses or policies; home mortgage loan companies, lenders and state law officials govern them. 

On the flip side, a non-escalating clause can refer to the interest rate not increasing in a home mortgage loan. 

Income Types

Income Types

Your income is crucial to applying for a home mortgage loan. Verification of income includes paystubs, W-2 forms, a letter from your employer, etc. It all depends on what your home mortgage loan company or lender will accept as proof. 

Obviously, the more income that you make, the better it will be to get approved for a loan. However, most people assume that your normal income (what you make on a day to day basis) is all that is considered when applying for a home mortgage loan. 

Home Mortgage Loan Company

If your regular income is not enough to get you approved for a home mortgage loan, then you can use supplementary forms of income to boost your application. Examples of this include overtime income, part time income, commission, child support and others. 

Rent with Option to Buy

Rent with Option to Buy

This type of arrangement works in a rent situation. Either the buyer or the renter has the option to purchase a home that he/she is renting or renting out. However, in order for either party to make a move, they both have to come to a general agreement. A right of refusal is when the buyer has the option to purchase the home first before the seller puts the house on the market. 

Mostly, whatever the renter pays is put as a down payment on the purchase of the home. If the renter decides not to buy the home, then the money is forfeited. 

If the renter decides that he/she wants to purchase the home, then he/she must qualify for a home mortgage loan with a home mortgage loan company or lender (provided that the contract between the buyer and the seller says so). The extra money paid by the seller (the option money), is not applied toward the down payment, in this scenario. But, it can be applied toward the house costs. 

If the money is put toward the down payment, then the contract between the buyer and seller must be within the guidelines of approving home mortgage loan company or lender. 

Shared Equity

The word “shared” by nature involves more than on person. As such with these home mortgage loans, two parties are involved, and two types of loans. Shared equity can either be a loan or an agreement. 

One party makes most of the down payment, if not all of it, and any necessary costs. This party also makes the payments, and therefore gets some ownership of the house, and some taxes and interest paid for. This is the shared equity loan. 

The shared equity agreement is more nitty gritty. The agreement is added to an existing home mortgage loan, and both parties come together to decide what the ownership percentage will be like, who pays what, how much and when, and it also lists a buying price if either party decides to buy the house.