With the wide variety of loans available, home buyers have the freedom to choose the type of loan that best suits their needs. Early on in the home buying process, it is a good idea to meet with several lenders to compare the types of mortgages they offer and shop for the best price and terms. By making lending money to home buyers safer, mortgage insurance helps more families get into homes of their own. This percentage may vary, depending on where you live. Your lender will give you a more exact estimate of your closing costs.
Points are finance charges that are calculated by the lender at closing.
The more points you pay, the lower your interest rate will be. In some cases, you may be able to finance the points. There are two basic formulas commonly used by lenders to determine how much of a mortgage you can reasonably afford. These formulas are called qualifying ratios because they estimate the amount of money you should spend on mortgage payments in relation to your income and other expenses. Any expenses that extend 11 months or more into the future are termed long-term debt, such as a car loan.