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Question 1

What are discount points on a loan's interest rate?

Answer

Discount points are an amount that a borrower pays to the lender in order to receive a lower interest rate for a loan. One point equals 1 percent of the amount of loan. The lender is liable for $2,000. If you took out a loan of $100,000 and paid two points this would amount to $2,000. People who want to lock in a lower interest rate on their loan will use points. However, points also add to the overall amount of loan. Therefore, borrowers should only pay points if they believe that they'll benefit more in the course of the loan than they will pay in points. Bank Added Insurance to My Loans.

Question 2

What is a parent PLUS loan?

Answer

The Department of Education offers a Parent Plus loan to parents of students in colleges. Parents can borrow up to the cost of tuition, less any financial aid that is received by the student. Parent Plus loans are fixed in terms of interest and don't change regardless of credit score or ratio of debt. There are no deferment options or forbearance. The loan comes with an amortization period of 10 years. This is a long repayment term for those who are struggling to make their payments. Bank Added Insurance to My.

Question 3

Who are microlenders?

Answer

A micro lender is an institution of finance which lends money to people or small companies, typically for less than US$50,000. They often offer loans to entrepreneurs as well as people with low incomes who may not be able to get loans from banks that are traditional. Micro lenders usually charge high fees and interest rates since they take on greater risk by lending to those who may not be able to pay back the loan. However, micro lenders can be a valuable resource for entrepreneurs by helping entrepreneurs get their venture off the ground and grow. Added Insurance to My.

Question 4

What is an heloc loan and how could it be utilized?

Answer

A HELOC, also known as a home equity loan is a type of loan that the borrower is able to use to open a revolving account of credit. This kind of loan is generally used to finance major expenses such as home repairs and renovations, education expenses and medical expenses. The amount of money that is available is typically determined by the equity in the property of the borrower. HELOC loans come with an interest rate that is lower than conventional mortgages and personal loans. HELOC loans are characterized by an interest rate higher than credit cards. Bank Added Insurance to My Loans.

Question 5

What is fixed rate lending?

Answer

A fixed-rate mortgage is a type of loan with an interest rate that stays the same for the duration of the loan's term. The advantage of a fixed rate loan is that the borrower knows precisely what their monthly payment will be and are able to budget in line with their budget. A downside to a fixed-rate loan is that the borrower may be eligible for better interest rates through refinancing. Bank Added Insurance to My.

Question 6

What is a good ratio of loan-to-value?

Answer

A loan-toвАУvalue ratio below 80% is considered to be a good ratio. This means that the lender only contributes 80% of the home's purchase cost. The borrower is required to contribute 20 percent. Low ratios of loan to value are crucial since it lowers the likely to be in fail to pay your mortgage. The lender is also able to sell your home to recover more of their investment if you fail to pay. Added Insurance to My.

Question 7

What is the distinction between a bridge loan and a conventional loan?

Answer

A bridge loan is a short-term financing that pays for the down payment for the purchase of a new home or cash to help with the transfer from one residence to the next. Bridge loans tend to be short-term and have low interest rates. These loans can also be paid back quickly in order for the borrower to avail of rates that are longer-term. Bridge loans can also be referred to as swing loans, gap financing, or even jump loans. Bank Added Insurance to My Loans.

Question 8

What is a discount point?

Answer

A discount point is an amount that a borrower pays to the lender in order to get a lower interest rate on a loan. One point equals 1% of the amount of loan. The lender is liable for $2,000. If you borrowed $100,000 and paid two points, that is $2,000. People who wish to lock in an interest-only rate will often use points. However, points also increase the total amount of loan. Borrowers should not pay points if they feel they will save more on the loan's duration than they'll pay in points. Bank Added Insurance to My.

Question 9

What exactly is a "lender credit"?

Answer

Lenders can offer lender credit to the borrowers. It allows borrowers to borrow more money than they would be able to borrow using only their personal credit. Lender credits are often offered to assist lenders in attracting new customers. They typically come in the form of percentage on the amount of loan. In other words, if you were to get a loan of $10,000, and the credit from the lender was 10%, you'd actually only have to pay back $9,000. Lender credit rates can vary between lenders . It is essential to evaluate rates before choosing the right lender. Added Insurance to My.

Question 10

What is the minimum down payment to get an FHA loan?

Answer

Although the FHA loan down payment is subject to change, it is generally 3.5% of total home cost. In order to qualify for an FHA loan, you'll need to have an FICO score of at minimum 580. It is possible to qualify for an FHA loan in the event that you have a credit score of between 500 to 579. But, you'll need to make a larger down payment. FHA loans are available to military veterans and active service members. Bank Added Insurance to My Loans.