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Connecticut Real Estate Mortgages

Posted on September 4, 2014 · Posted in Connecticut First Time Mortgage, Connecticut Home Purchase Mortgage

CT Real Estate Mortgages

 

 

stephThe purchase of your home is one of the most important financial transactions you will make.  As a homebuyer, it is important to be informed so you can make decisions that are in your best interest.  All too often, buyers rate shop from one lender to another without having a clear understanding of the various associated costs of the loan.  A good loan officer will help you understand what loan is best for your specific circumstances.  Because differing types of loans have different advantages/disadvantages, buyers should be aware of the terms with varying types of financing.  For example, a conventional loan will typical have a higher interest rate than an FHA loan, but lower or no monthly mortgage insurance which often makes your monthly payment lower.

The following chart is for example purposes only (this is being provided for informational purposes only and these are not rates and terms being offered but rather examples) and illustrates why it is crucial to evaluate the terms of the loan you are considering in addition to the interest rate.  The following example assumes a purchase price of $325,000 with a $20,000 downpayment for a loan amount of $305,000

 

Loan Type FHA Conv. Monthly
Interest Rate 4.0% 4.625%
Upfront MI $5337.50 $0.00
Principle & Interest $1,481.6 $1568.13
Monthly MI $321.96 $226.21
Total Monthly Payment $2470.23 $2461.00

 

 

In general, the differences between FHA and Conventional loans are as follows:

 

FHA Loans:

  • Minimum 3.5% Down
  • Lower Interest Rate than Conventional
  • Upfront Mortgage Insurance
  • Monthly Mortgage Insurance
  • Conventional Loans:
  • (The mortgage insurance on an FHA loan is for the life of the loan unless you put 20% at the onset. With a 20% downpayment, you can eliminate the mortgage insurance after 11 years and you have 78% equity in the home.)
  • Minimum 5% Down
  • Higher Interest Rate than FHA
  • No Upfront Mortgage Insurance
  • Lower than FHA or No Mortgage Insurance
  • For more information on the many residential real estate mortgages available to our clients or to discuss what product is best for your upcoming home purchase, please contact me directly.
  • (The mortgage insurance on a conventional loan can be eliminated once you have 78% equity in the home.)

 

Stephanie Smith

NMLS# 1083107/company NMLS 117273

860-335-9918

stephanie@northeast-mortgage.com

 

 

FHA Disclosure

NMLS# 117273, Northeast Financial, 860-788-7237

The principal and interest payment on a 203,500 30 year FHA fixed rate loan at 3.25% on 96.5% loan to value is 1,025.99 with 0 points due at closing.  The APR is 4.491%.  Payments include a one time upfront mortgage insurance premium (MIP) at 1.75% of the base loan amount and monthly MIP is calculated at .85% of the base loan amount.  The .85% monthly MIP is required for a specific period of time regardless of your down payment or equity in your home.  The principal, mortgage insurance, and interest payment does not include property taxes or home owner’s insurance premiums, which will result in a higher actual monthly payment.  Rates current as of 6/26/17