Sioux City Real Estate Company - OZ Homes and Loans

What types of loans are there and which one is best for me?
How does the interest rate factor into securing a mortgage loan?
What If I have bad credit?
What is included in a typical mortgage payment?
What is an escrow account?
Are there special mortgages for first time homebuyers?
How large of a down payment do I need?
What are closing costs?
What is prequalification?
What are discount points?

What types of loans are there and which one is best for me?

There are many options available. OZ Homes and Loans will only facilitate loans that work for YOU. We will never recommend a loan that does not work in your favor. There are Fixed Rate Mortgages, usually of the 15 and 30 year variety. These are usually called conventional loans and are recommended if the current interest rates are reasonable and if you plan on making this home your residence for at least 10 years. The main advantage of this type of loan are that your house payment will remain fairly consistent (taxes and insurance rates may vary).

Then there is the ARM, or adjustable rate mortgage. We generally recommend these to people who are either not planning on living in the new house for very long (7 years or less, usually, depending on the situation) or who need a lower interest rate in the short term. The advantage of this rate is simply that you get a lower interest rate starting out. The disadvantage is that you are taking your chances that in 7 years (or 5 years) that this rate will change for the better. This is not always the case and your payment will be affected according the current rates.

The Two-Step Mortgage is in between the two mortgages above. Intrest rates will only adjust once and remain the same for the life of the loan.

How does the interest rate factor into securing a mortgage loan?

Simply put, the lower the intrest rate the lower your house payment OR the more money you can borrow. Be sure to check with us frequently and request when you feel the time is right or when we recommend that you "lock in" a particular rate. Intrest rates are constantly fluxuating. A few years back, depending on the loan type and length, they were as low as 4.5% or so, currently they're hovering in the low 6% area and seem to be stablizing. Historically speaking, this is a VERY good time to be shopping for a mortgage and a house. In the 1970s, rates were in double digits and that was a very diffucult time to borrow money. You'd be surprised at the amount of money you can borrow if you have a decent credit rating.

What If I have bad credit?

There are many reasons why your credit rating could be compromized. OZ gives you our word that we will not just turn you down cold and we will work with you, educate you and assist in any way we can to help you get a loan. With no obligation to us! Come in for a free seminar today and we will discuss your credit and make suggestions on how to improve it or make it fit into a loan.

What is included in a typical mortgage payment?

The mortgage payment is comprised of the principal, the interest, property taxes, homeowners insurance and possibly mortgage insurance. Everything other than prinicpal and intrest is placed in what's called an escrow account.

What's an escrow account?

You know how your employer takes out withholding from every check and gives it to the government to make sure that your taxes are covered? An Escrow company "withholds" money every month which is part of your house payment. Your taxes and homeowners insurance are due once a year. Instead of "saving" a couple hundred bucks a month to pay your insurance and taxes, an escrow account is used instead. An escrow account is an approximate prediction of what your taxes and insurance will be, and you may end up owing a few bucks or getting a few bucks back every year in the form of a lower house payment.

Are there special mortgages for first time homebuyers?

Yes. Lenders now offer several affordable mortgage options, which can help first-time homebuyers, overcome obstacles that made purchasing a home difficult in the past. Lenders may now be able to help borrowers who don't have a lot of money saved for the down payment and closing costs, have no or a poor credit history, have quite a bit of long-term debt, or have experienced income irregularities.

How large of a down payment do I need?

The larger the down payment, the less you have to borrow, and the more equity you'll have. (Equity is the amount your house is worth minus the amount of money you owe). Mortgages with less than a 20% down payment generally require a mortgage insurance policy to secure the loan. If you can afford 20%, it's a good idea. Mortgage insurance is not cheap and just adds money to your house payment that is not benefitting YOU. When considering the size of your down payment, consider that you'll also need money for closing costs, moving expenses, and possibly repairs and decorating.

What are closing costs?

Closing costs are all the fees associated with closing the loan. Typical costs usually include an origination fee(mortgage broker's fee), discount points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. The costs of closing usually are about 3 percent to 6 percent of the mortgage amount. It's wise to keep an eye on these costs to make sure you know exactly who's getting what.

What is prequalification?

This is your first step when buying a home! There's nothing more disappointing than finding the perfect home and finding out you can't afford it. Come to us and we'll tell you how much we can lend you before you go house shopping. We'll check your credit history, your income, debt and give you a pretty good idea of the price range you can realistically afford. A seller will look more seriously at you, a agent will have an idea of what houses to show you and you will benefit by arming everyone with the knowledge that you are not wasting your time or theirs!

What are discount points?

Discount points allow you to lower your interest rate. They are essentially prepaid interest, with each point equaling 1% of the total loan amount. Generally, for each point paid on a 30-year mortgage, the interest rate is reduced by 1/8 (or.125) of a percentage point. Discount points are smart if you plan to stay in a home for some time since they can lower the monthly loan payment. Points are tax deductible when you purchase a home and you may be able to negotiate for the seller to pay for some of them.




	Below is a list of the most common questions that first home buyers as us. If you don't see your question here, feel free to contact us, and we may place your question on our list!
	What types of loans are there and which one is best for me? How does the interest rate factor into securing a mortgage loan? What If I have bad credit? What is included in a typical mortgage payment? What is an escrow account? Are there special mortgages for first time homebuyers? How large of a down payment do I need? What are closing costs? What is prequalification? What are discount points? What types of loans are there and which one is best for me? There are many options available. OZ Homes and Loans will only facilitate loans that work for YOU. We will never recommend a loan that does not work in your favor. There are Fixed Rate Mortgages, usually of the 15 and 30 year variety. These are usually called conventional loans and are recommended if the current interest rates are reasonable and if you plan on making this home your residence for at least 10 years. The main advantage of this type of loan are that your house payment will remain fairly consistent (taxes and insurance rates may vary). Then there is the ARM, or adjustable rate mortgage. We generally recommend these to people who are either not planning on living in the new house for very long (7 years or less, usually, depending on the situation) or who need a lower interest rate in the short term. The advantage of this rate is simply that you get a lower interest rate starting out. The disadvantage is that you are taking your chances that in 7 years (or 5 years) that this rate will change for the better. This is not always the case and your payment will be affected according the current rates. The Two-Step Mortgage is in between the two mortgages above. Intrest rates will only adjust once and remain the same for the life of the loan. How does the interest rate factor into securing a mortgage loan? Simply put, the lower the intrest rate the lower your house payment OR the more money you can borrow. Be sure to check with us frequently and request when you feel the time is right or when we recommend that you "lock in" a particular rate. Intrest rates are constantly fluxuating. A few years back, depending on the loan type and length, they were as low as 4.5% or so, currently they're hovering in the low 6% area and seem to be stablizing. Historically speaking, this is a VERY good time to be shopping for a mortgage and a house. In the 1970s, rates were in double digits and that was a very diffucult time to borrow money. You'd be surprised at the amount of money you can borrow if you have a decent credit rating. What If I have bad credit? There are many reasons why your credit rating could be compromized. OZ gives you our word that we will not just turn you down cold and we will work with you, educate you and assist in any way we can to help you get a loan. With no obligation to us! Come in for a free seminar today and we will discuss your credit and make suggestions on how to improve it or make it fit into a loan. What is included in a typical mortgage payment? The mortgage payment is comprised of the principal, the interest, property taxes, homeowners insurance and possibly mortgage insurance. Everything other than prinicpal and intrest is placed in what's called an escrow account. What's an escrow account? You know how your employer takes out withholding from every check and gives it to the government to make sure that your taxes are covered? An Escrow company "withholds" money every month which is part of your house payment. Your taxes and homeowners insurance are due once a year. Instead of "saving" a couple hundred bucks a month to pay your insurance and taxes, an escrow account is used instead. An escrow account is an approximate prediction of what your taxes and insurance will be, and you may end up owing a few bucks or getting a few bucks back every year in the form of a lower house payment. Are there special mortgages for first time homebuyers? Yes. Lenders now offer several affordable mortgage options, which can help first-time homebuyers, overcome obstacles that made purchasing a home difficult in the past. Lenders may now be able to help borrowers who don't have a lot of money saved for the down payment and closing costs, have no or a poor credit history, have quite a bit of long-term debt, or have experienced income irregularities. How large of a down payment do I need? The larger the down payment, the less you have to borrow, and the more equity you'll have. (Equity is the amount your house is worth minus the amount of money you owe). Mortgages with less than a 20% down payment generally require a mortgage insurance policy to secure the loan. If you can afford 20%, it's a good idea. Mortgage insurance is not cheap and just adds money to your house payment that is not benefitting YOU. When considering the size of your down payment, consider that you'll also need money for closing costs, moving expenses, and possibly repairs and decorating. What are closing costs? Closing costs are all the fees associated with closing the loan. Typical costs usually include an origination fee(mortgage broker's fee), discount points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. The costs of closing usually are about 3 percent to 6 percent of the mortgage amount. It's wise to keep an eye on these costs to make sure you know exactly who's getting what. What is prequalification? This is your first step when buying a home! There's nothing more disappointing than finding the perfect home and finding out you can't afford it. Come to us and we'll tell you how much we can lend you before you go house shopping. We'll check your credit history, your income, debt and give you a pretty good idea of the price range you can realistically afford. A seller will look more seriously at you, a agent will have an idea of what houses to show you and you will benefit by arming everyone with the knowledge that you are not wasting your time or theirs! What are discount points? Discount points allow you to lower your interest rate. They are essentially prepaid interest, with each point equaling 1% of the total loan amount. Generally, for each point paid on a 30-year mortgage, the interest rate is reduced by 1/8 (or.125) of a percentage point. Discount points are smart if you plan to stay in a home for some time since they can lower the monthly loan payment. Points are tax deductible when you purchase a home and you may be able to negotiate for the seller to pay for some of them.

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