No maximum loan amount. PMI insurance that protects lender against loan default. PMI is required if down payment is less than 20 percent of purchase price. PMI can be removed when homeowner achieves 20 percent equity. A point or a one percent origination fee is equal to one percent of the loan amount.
Points represent prepaid interest paid at closing for the purpose of buying the rate down.
Origination fees are paid to the lender who originates the mortgage and may usually be avoided by paying a slightly higher than market rate. A Careful analysis of whether or not the borrower should pay points and origination fees should be a standard part of the origination process. It is imperative that your loan officer carefully explain your options in order to tailor the loan program to your specific needs. A fixed rate remains constant throughout the life of the loan, however you pay a higher interest rate for the elimination of any future rate risk. Normally, the shorter the adjustment period, the lower the interest rate.