Mortgage FAQs

PITI stands for Principal, Interest, Taxes, and Insurance. The major components of a monthly mortgage payment.

PMI is Private Mortgage Insurance. It’s normally required when you buy a house with less than 20% down. Mortgage insurance helps protect lenders in the event of a foreclosure.

The economy, economic forecasts, market conditions and a lot more effect overall interest rates and the mortgage interest rates. Rates will rise and fall with market conditions.

Prequalification is the process that determines how much you can afford to spend on a home.

The “rate” is the interest percentage on the money you borrow for your mortgage.

“APR” stands for “Annual Percentage Rate.” There are fees and additional costs that go into your payment. Things like mortgage insurance and closing costs. The number that represents the actual yearly cost of funds over the term of the loan is the APR.

In short, the rate is the interest on the money you borrow. The APR is the rate on the money plus fees and additional costs.

(1) The interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes; and (2) the consumer should consult a tax adviser for the further information regarding the deductibility of interest and charges