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Knowledge is power

Dealing with a mortgage transaction is easy when you are dealing with GMA's trained and experienced home loan representatives, but here are a few items you can read about to clear some common misconceptions.

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Do I get a tax advantage from having a mortgage?
You should consult a tax attorney or accountant for specific details, but interest on a mortgage is usually tax deductible. Interest on credit cards or automobile loans is not normally tax deductible.
What are rates, terms, and APR?
All mortgages have an interest rate, a term, and an Annual Percentage Rate (APR). For example, a mortgage might be defined as a 30-Year Fixed Rate Loan at 7.625%, with an APR of 7.800%. In this example, the mortgage term is 30 years. As the borrower, you will pay back the loan in installments over the course of 30 years. The interest rate in this example is 7.625%. This means you must pay interest on the money you've borrowed at a rate of 7.625% per year. That is, in addition to paying back the loan, you will pay your lender an additional 7.625% of the current loan balance every year. This interest is basically the fee your lender charges you in return for lending you the money. The Annual Percentage Rate (APR) is a measure of the cost of credit, expressed as a yearly rate. Because APR includes points and other costs such as origination fees, it's usually higher than the advertised rate. The APR allows you to compare different mortgages based on actual annual costs.
How do I know what my loan rate will be?
Rates vary primarily based on the type and purpose of the loan, your credit history and income, loan amount, value of the property, and the number of points you are willing to pay.
What are points and how many do I have to pay?
Generally speaking, points paid to discount a mortgage rate. One point is equal to 1% of your loan amount. Points are paid when the loan closes, not at the time you apply for the loan. The more points paid, the lower the interest rate you are "buying down".
How do I qualify for a loan?
Lenders use specific criteria to determine if you qualify for a loan and the amount you qualify for. Our experienced Home Loan Experts will walk you through the qualification process from beginning to end. GMA Mortgage allows you to apply and get pre-approved right here online - it's fast, easy, and free (GMA Mortgage charges no application fee).
How do I refinance my existing home loan?
To refinance your loan in order to obtain a lower interest rate and start saving on your monthly payments, GMA Mortgage can offer you the following loan products with the security of a fixed rate and payments: 30 Year Fixed 20 Year Fixed 15 Year Fixed 10 Year Fixed 2,5, and 7 Year Fixed FEE LESS LOAN OPTION Our Fee Less Loan option allows you to refinance with few upfront fees! While the rate is slightly higher, you will pay few upfront fees to get your new loan. In effect, as long as our Fee Less Loan rate is lower than your existing rate, it makes financial sense to refinance because there is little or no cost in doing so. CASH OUT OPTION If your equity in your property qualifies, you can refinance with a loan amount greater than your current mortgage - and keep the difference! Use it for home improvement, debt consolidation, or whatever you want. 30-Year Fixed-Rate Refinance Choose this when: You want low monthly payments that do not change You want a loan that's generally easier to qualify for You're planning to remain in your house less than 10 years You want the maximum tax advantage (please consult your tax adviser)
How do I calculate the value of my property?
Since a mortgage is a loan secured by a piece of real property, a crucial factor is in the correct value of the property in question. Property value can be determined in a number of ways: The market value of the property - that is, what a buyer will pay for it and what other comparable properties (comps) in the neighborhood have recently sold for. The appraised value of the property - that is, what a trained and licensed professional deems the property to be worth based on an inspection, comps, and a thorough analysis of the property and its neighborhood. Additionally, the appraiser estimates the replacement value of the property - that is, the cost to build a house of similar size and construction on a vacant lot.
Can I make extra principal payments so I can pay off the loan more quickly?
Depending on the loan, and what your state permits, it is feasible for you to make extra payments on the loan. Extra payments will have an effect on how long it takes you to pay off the mortgage.
What is a cash-out option?
If your equity in your property qualifies, you can refinance with a loan amount greater than your current mortgage - and keep the difference! Use it for home improvement, debt consolidation, or whatever you desire.