Refinance Mortgage Q & A

What is the difference between the rate and APR?

APR, which stands for “Annual Percentage Rate” is the rate that is charged for borrowing expressed as a single percentage number that represents the actual yearly cost of funds over the term of the loan. This includes any fees or additional costs associated with the transaction.

(1) The interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes; and
(2) the consumer should consult a tax adviser for the further information regarding the deductibility of interest and charges

What is PITI?

PITI stands for Principal, Interest, Taxes, and Insurance. The major components of a monthly mortgage payment.

What is PMI?

PMI or Private Mortgage Insurance is normally required when you buy a house with less than 20% down. Mortgage insurance is a type of guarantee that helps protect lenders against the costs of foreclosure.

What is Prequalification?

Prequalification is the process of determining what price a home can be purchased by a prospective buyer.

Why do mortgage rates change?

To understand why mortgage rates change we must first ask the more general question, "Why do interest rates change?" It is important to realize that there is not one interest rate, but many interest rates. Read more here: http://www.mortgagecorp.com/qa_ratechange.php