Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year

If you put less than 20 percent down on a home mortgage, lenders often require you to have Private Mortgage Insurance (PMI). PMI protects the lender if you default on the loan. The Homeowners Protection Act of 1998 - which became effective in 1999 - establishes rules for automatic termination and borrower cancellation of PMI on home mortgages. These protections apply to certain home mortgages signed on or after July 29, 1999 for the purchase, initial construction, or refinance of a single-family home. These protections do not apply to government-insured FHA or VA loans or to loans with lender-paid PMI.
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Mortgages can sometimes be intimidating, especially for the first-time borrower. They have their own language and procedures that can seem complicated at times. Here are a few definitions and tips to familiarize yourself with mortgages and their ins and outs.
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Adjustable-rate loans, also known as variable-rate loans, usually offer a lower initial interest rate than fixed-rate loans. The interest rate fluctuates over the life of the loan based on market conditions, but the loan agreement generally sets maximum and minimum rates. When interest rates rise, generally so do your loan payments; and when interest rates fall, your monthly payments may be lowered
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Shopping around for a home loan or mortgage will help you to get the best financing deal. A mortgage?whether it's a home purchase, a refinancing, or a home equity loan?is a product, just like a car, so the price and terms may be negotiable. You'll want to compare all the costs involved in obtaining a mortgage. Shopping, comparing, and negotiating may save you thousands of dollars.
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Choosing a mortgage depends on your wants and needs. Regardless of your reason for refinancing -- be it to lower monthly payments or build equity faster -- you should contact several mortgage lenders. Start with your original lender and then contact several more to compare mortgage types, rates, and terms. Lenders will likely vary in their costs and fees. Our Find a Lender Search tool helps you locate a Fannie Mae-approved lender in your area, so you can learn more about the variety of Fannie Mae mortgage products that help you refinance your mortgage
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(ARA) - If you’ve ever applied for a loan, from a mortgage to a credit card, you’ve probably heard the term “credit score.” You may even know that credit scoring is a way for lenders to evaluate a person’s credit worthiness using a mathematical formula. But you may still have questions on what information goes into the evaluation, how the score is calculated and how it is different from your credit report.
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Shopping around for a home loan or mortgage will help you to get the best financing deal. A mortgage—whether it's a home purchase, a refinancing, or a home equity loan—is a product, just like a car, so the price and terms may be negotiable. You'll want to compare all the costs involved in obtaining a mortgage. Shopping, comparing, and negotiating may save you thousands of dollars.
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The following is a list of definitions that will help you ask the right questions and compare information when you are shopping for a mortgage loan.
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