Frequently Asked Questions

Frequently Asked Questions

What Is Equity?

Equity is the value YOU own in property such as a house. It’s the difference between what’s OWED and what the property is WORTH in the current market. The example this video shows - you have a house worth $300,000 today and you owe the bank $200,000.  Your equity...

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What Are Real Estate Commissions?

Like the video says - real estate agents aren’t paid by the hour!They’re paid a percentage of the purchase price in a successful real estate transaction. When one agent represents the sellers and another represents the buyers the commission is typically split between...

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What Is “Prime”?

The Prime Lending Rate - sometimes just called “Prime”  - is the interest rate that banks charge each other for overnight loans. Some consumer rates - like ARMs - are set in relation to Prime. In the US, Prime is affected by the Federal Reserve lending rate to banks;...

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What Is An Escrow Account? Do I Need One?

As we show you in this video, an escrow account is an account, established by your lender, to set aside a portion of your monthly mortgage payment to cover annual charges for homeowner's insurance mortgage insurance (if applicable), and property taxes. Escrow accounts...

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What Are Discount Points?

Discount points allow you to lower your interest rate. While this video simplifies things to help you remember, “points” are essentially prepaid interest with each point equaling 1% of the total loan amount. Generally, for each point paid on a 30-year mortgage the...

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What Steps Need To Be Taken To Secure A Loan?

You’ll see some pictures in this video to help you remember later, but the first step in securing a loan is to complete a loan application. To do so, you'll need the following information. Pay stubs for the past 2-3 months. W-2 forms for the past 2 years. Information...

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How Large A Down Payment Do I Need?

There are mortgage options now available that only require a down payment of 5% or less of the purchase price. You’ll see some pictures in this video to help you remember later - the larger the down payment, the less you have to borrow and the more equity you'll have....

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What Is Included In A Monthly Mortgage Payment?

The monthly mortgage payment mainly pays off principal and interest. But most lenders also include local real estate taxes homeowner's insurance, and mortgage insurance, if applicable. If you are refinancing compare what is and isn’t included in your financing...

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Can I Pay Off My Loan Ahead Of Schedule?

Usually, Yes. Like the guy in the video says, by sending in extra money each month or making an extra payment at the end of the year you can accelerate the process of paying off the loan. When you send extra money, be sure to indicate that the excess payment is to be...

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