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Mortgage rates in Port Tobacco

Affordable and agreeable mortgage rates await savvy homebuyers in Port Tobacco. These low rates, fused with the history, charm and beauty of the community, make Port Tobacco an ideal place for homebuying families to consider. Distinct Southern Maryland charm and affordable home luxury places Port Tobacco at the top of the list for Maryland families.The peaceful community is sure to aid families make the transition into their new and beautiful town.

Mortgages in Port Tobacco

Many factors are involved in determining your rate

Understanding how to properly calculate the total income of a potential resident can be tough. In the Southern Maryland area alone, potential residents have well over 1000 lenders at their disposal. However, linking up with the right lender is essential. Many potential homebuyers overlook estimated mortgage calculation, which in the long run can prove to be a costly mistake. While mortgage rates are relatively low, understanding what is needed versus what is wanted in a mortgage is essential. Consider using a mortgage calculator online in order to better grasp potential interest rates. Further, consider reviewing fixed and ARM mortgages to see which fits best with your finances, and be prepared to negotiate the rate and the term of the mortgage with the lender.

Building credit in Port Tobacco

Better credit translates into a lower interest rate

Many first time buyers do not understand the impact that credit can have on a mortgage rate. In Port Tobacco, lenders encourage potential buyers to increase their credit scores. A person can buy a home with a 500-600 credit score, but the interest rate on his or her mortgage might be high. In order to boost credit scores, many people opt to get secured credit cards or open a line of credit at a bank. Lenders who service Port Tobacco like to see potential homebuyers work on improving their credit scores. This builds trust with the lender and shows dependability. Within a 12-month time frame, many potential homebuyers have seen their credit scores increase quite significantly, helping them to secure a good interest rate on a home.

Common Questions About Port Tobacco Mortgage Rates

All The Answers You Need to Settle Down Sooner

Should I choose a fixed or adjustable rate?

It depends how long you expect to stay in the home. Adjustable rates are good for people who may not be in the home long, whereas fixed rates are ideal for people who are confident of settling in.

Do I need a home appraisal?

Probably—in most cases, the homebuyer must use an appraiser to evaluate the value of the home. Appraisal costs vary depending on the value of the property, as well as the state the house is in. Buyers cannot choose their own appraiser—the bank makes the decision.

What is PMI?

Private mortgage insurance (PMI) is required when a homebuyer makes a down payment of less than 20%, or when a borrower refinances with less than 20% equity in the home. PMI fees vary according to your down payment and credit score, and adds a premium to your monthly mortgage payment. Please note, PMI is tax-deductible in 2015 and 2016 for certain income brackets.

What does Loan-to-Value mean?

Loan-to-Value (LTV) is the percentage of your home’s value that your loan represents. When refinancing, the calculation is simply the loan amount divided by the appraised value. When buying a home, the LTV is found by dividing by either the purchase price or appraised amount, whichever is lower. When the LTV is less than 80%, the lender generally requires PMI.

For example:

Purchase price: $100,000
Down payment: $15,000
Loan amount: $85,000
Appraised value: $110,000
LTV: $85,000/$100,000 = 85%

What are closing costs?

Closing costs are standard fees associated with a real estate transaction. You will typically pay about 2-5% of the purchase price in closing costs—the exact amount depends on where you are buying (or refinancing), as well as number of extra fees involved in your particular transaction. Earnest charges no lender fees, so the borrower is only responsible for 3rd-party fees.

What should I consider before refinancing my mortgage?

Refinancing your home loan is an attractive option when rates are low. A simple rate and term refinance can help you lower your monthly payment and potentially eliminate your PMI premium, as long as you have built up enough equity in the home. You might also use a cash-out refinance to access some of the equity you’ve built up in the home (which may result in a higher monthly payment on your new loan).

However, keep in mind that refinancing a mortgage does involve several fees (closing costs). Before refinancing, you should calculate the ‘break-even’ point at which your refinanced loan makes up for the closing costs. If you plan to leave your home before this time, it’s better to stay with your current mortgage.

Knowledge Is (Buying) Power

Further Resources from the Earnest Blog

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The intelligent home loan

When it comes to finding the right home loan, Earnest works hard to ensure that the process pain-free. We use an industry-leading and intuitive online-only application (meaning most times no scanner or fax machine required), a 5-star client service team, and a unique rolling pre-approval that stays current while you track down that perfect home. At Earnest, the home loan process is like no other.