STEP 6: GET FUNDING 

After interest and closing costs, the cost of real estate financing is

generally greater than the original purchase price of the home itself.

Financing is a very big part of the home buying process so a buyer

should have as much information as possible at hand when it comes to

their options and costs. Miamirealtyfinder.com is able to provide you

with all of the mortgage information you need and discuss your

financing options and recommend loan sources. 

What Kind of Loan? 

With so many lenders on the market there are limitless numbers of

loans available to you. But the mortgage you choose should be

determined by these key factors: 

What kind of credit do you have? The best rates and terms are for

those with excellent credit. To be ensured you get the best loan, pay

credit card, rent and mortgage bills and installment payments in full

or on time. 

There are many loans available with just 5% down or less. Even major

lenders now offer "no money down" options. 

Are you a "first time buyer"? A first time buyer can refer to those

who haven't owned in the past three years in most state programs. A lot

of state-backed programs offer smaller down payment plans below market

interest rates to these first time buyers so be sure to inquire with

your realtor. 

Over 2.5 million VA (Veterans Administration), PMI (private mortgage

insurance), and FHA (Federal Housing Administration) loans are given

every year. With less than 20% down, lenders expect and outside third

party to protect against any mortgage defaults. 

How Do You Get a Loan? 

In order to qualify for a loan you must first fill out a complete loan

application and have supporting documentation readily available. These

payments will include rental checks, pay stubs, and tax returns.

However, the loan officer will go into detail of the paperwork need to

verify credit information. 

Where Do You Get a Loan? 

Mortgage brokers, savings and loan associations, mutual banks, credit

unions, commercial banks, mortgage bankers, and insurance companies can

all finance mortgages. Speak with your realtor to help you arrange

financing. 

What is a Mortgage? 

A mortgage is a loan given to finance one of the largest debts you

will probably ever take on - your home. A legal contract is signed

promising that you will pay back the debt including interest usually

over a 15 to 20 year time period. Your new home is used as collateral,

therefore, the lender has the right to take back the property if the

loan is not paid making monthly installments. These payments usually

include principal, interest, insurance and taxes also know as PITI. 

Interest: A percentage called the interest rate, this is what the

lender charges you to use the money that you borrowed. On top of the

given rate, the lender may also charge you "points" and additional loan

costs. Each point is 1% of the financed amount and is financed with the

principal. 

Principal: The sum of money that you borrowed to buy your home. Before

it is financed you can give the lender a sum of cash (down payment) to

minimize the amount of money to be financed. 

Both interest and principal are a part of your monthly payment called

amortization. This reduces your debt over a fixed period of time. If

your down payment is less than 20% you are considered a risk to your

lender. The lender sets up and escrow account to offset that risk to

collect those additional expenses. 

Taxes: Property taxes your community levies based on a percentage of

the value of your home. This tax is used to help finance the running of

your community such as schools, roads, etc. 

Insurance: Home insurance must be obtained before closing the deal on

your home purchase covering your home and property against theft, fire,

and weather.