You Can Bank On It

May 26, 2016

Presented by: NobleBank & Trust

Home Sweet Home: Know Your Mortgage Options

There are few who understand the local housing market better than Birmingham-area Realtors. Local experts say they are seeing a seller’s market developing in some areas. In our local community, listed homes are receiving multiple offers or are even selling the same day they are listed. If you’re considering buying, being fully prepared can provide the opportunity for you to move quickly on your dream home. When purchasing, you’ll likely need to get approved for a mortgage loan from the bank. Depending on the timeframe of the mortgage, you will be paying it back for 15, 20 or 30 years — with interest. Because mortgage loans are uniquely individual, NobleBank & Trust offers a wide range of residential loan programs tailored to fit your specific needs.

When you begin the budgeting process, estimating your monthly payments will be important. The “interest rate” is used by the loan company to calculate your monthly payments. The APR or the “annual percentage rate” informs you what your effective interest rate is after all the extra costs, such as loan origination fees, application fees and prepaid interest points are added up. This is why your APR will always be higher than the originally stated interest rate. The APR will help you compare loans, and find the best interest rate possible. While the APR doesn’t directly affect your monthly payments, lenders are required by law to disclose the annual percentage rate. When your monthly mortgage payment is calculated, there are lots of added fees and charges that add up to make your total mortgage payment.

When working to get approved for a home loan, you need to prove that you have homeowner’s insurance lined up for the home you are purchasing. This cost, along with your real estate taxes, will often be put into an escrow account, where your monthly payment will not only include the principal and interest figures, but your insurance and taxes. To get an accurate figure of what your monthly payment will be, you’ll need to first figure out how your interest rate is calculated. The interest rate on nearly all mortgages is computed monthly, so if you divide the annual rate by 12 you’ll get the monthly interest rate.

Every mortgage is different and has its own style. We understand it can become confusing, and our mortgage officer can assist you in determining what is right for you and your family. Please do not hesitate to reach out to our team at NobleBank. We offer tailored advice about our loan products to fit your personal financial needs.

Member FDIC and Equal Housing Lender.

-Paul Z. Rogers