Cindy’s Page

Welcome to Cindy’s page where you will find answers to questions asked about real estate financing. In addition to being licensed in real estate, Cindy has an extensive background in mortagage lending.

If you’d like to submit a question please do so at asklaurelblog@gmail.com

Question: I went for a mortgage to buy a house and the lender said I have to pay a point. What's that?

Answer: This is a great question. 1 point is 1% of the loan amount - On a $100,000 loan, the point would equal $1,000. 2 points would be 2% of the loan amount - therefore on a $100,000 loan 2 points would equal $2,000. The point(s) are a type of fee paid to the lender. There are two different kinds of points that can be charged to the borrower - Origination Point(s) and Discount Point(s). The first type of point is an Origination Point - Origination Points are charged to recover some costs of the loan origination process. The second type of point is a Discount Point - Discount Points are used to "buy" your interest rate lower. This is know as a rate "buydown". These points typically lower the interest rate for the term of the loan unless otherwise disclosed.

Question: Dear Cindy, how much downpayment is required for a home loan?

Answer: Another great question - the borrower does not always get a straight answer on this question until the lender knows more about the borrowers finances and credit. There are many factors that actually go into this answer. The first factor is what loan types does the bank or mortgage broker offer. Not all lenders have the same products. There are still some products that allow for 100% financing, meaning no down payment is required, while other programs require a 20% down payment. For the average person buying a owner-occupied property, that can prove their income a 3.5% - 5% down payment is quite common. There are other factors to consider, such as: interest rate, mortgage insurance, etc. Don't be misled by the interest rate, sometimes a higher interest rate could mean a lower monthly payment. Check all the details and learn about the loan that you are getting into.