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Loan Tips
Our tips and strategies can help you secure a loan with a rate that works for you!
What is a Credit Score?
Ever wonder why you can go online and be approved for credit within 60 seconds? Or get pre-qualified for a car without anyone even asking you how much money you make? Or why you get one interest rate on loans, while your neighbor gets another? The answer is credit scoring. Credit scores are used extensively, and if you've gotten a mortgage, a car loan, a credit card or auto insurance, the rate you received was directly related to your credit score. The higher the number, the better you look to lenders. People with the highest scores get the lowest interest rates. Learn More!
Improve your Score
The interest rate you'll pay for the money you borrow will be determined, in large part, by this three-digit number that's generated from the information in your credit report. Most lenders have carved-in-stone rules about handing out the best terms, and those rules almost always place a major emphasis on your credit score. If their best rates are offered to borrowers with a score of 700 or higher and yours is a 698, those two points could cost you thousands of dollars. Learn More!
Discount Points FAQ
Discount points are fees paid to a lender at closing in order to lower your mortgage interest rate. While buying points is sometimes a good decision, many times the purchase costs you more than it saves. The cost of each point is equal to one percent of the loan amount. For instance, for a $100,000 loan one discount point equals $1,000. Each discount point paid on a 30-year loan typically lowers the interest rate by 0.125 percent. That means a 7.5 percent rate would be lowered to 7.375 percent if you purchase one point. Paying for points lowers your interest rate, because the lender receives the income in a lump sum at closing rather than collecting the interest as you make payments on your loan. Learn More!
Rate Lock Period
A lock-in, also called a rate-lock or rate commitment, is a lender's promise to hold a certain interest rate and a certain number of points for you, usually for a specified period of time, while your loan application is processed. Depending upon the lender, you may be able to lock in the interest rate and number of points that you will be charged when you file your application, during processing of the loan, when the loan is approved, or later. Learn More!
Rates Vs. APR
Loans can be confusing. Slick lenders can quote a lot of different numbers that mean different things. In an order to reduce confusion, the US Government passed the Truth in Lending Act. One of the provisions of this act is that lenders quote APR to potential borrowers. APR allows you to evaluate the cost of the loan in terms of a percentage. If your loan has a 10% rate, you'll pay $10 per $100 you borrow annually. All other things being equal, you simply want the loan with the lowest APR.Learn More!
Fixed Vs. Adjustable
Which is the better mortgage option for you: fixed or adjustable? The low initial cost of adjustable-rate mortgages (ARMs) can be very tempting to home buyers, yet they carry a great deal of uncertainty. Fixed-rate mortgages (FRM) offer rate and payment security, but they can be more expensive. Here are some pros and cons of ARMs and FRMs.Learn More!
Glossary
Helpful index of new terms to help you understand your new mortgage. Learn More!
Helpful Links
Helpful links to move you smoothly in buying your new home. Learn More!
Loan Tips
Here at Big Valley Mortgage our focus is on getting you the right loan and the right terms to fit your situation. A mortgage is a big commitment and you need an experienced professional guiding you through the process, answering your questions so that you’ll know with confidence that you made the right choice.