Traditional Mortgage Program Agencies

Borrowers shopping for the best mortgage rates may wonder how loan payment amounts are determined. Home loan payments are made up of four basic elements, known as the PITI, which includes the principal payment, interest payment, real estate taxes and property insurance. Some loan payments also increase due to the addition of private mortgage insurance (PMI)--generally required by lenders when the homeowner makes a down payment totaling less than 20 percent of the home's value.

Basic Mortgage Types

Consumers must select between several basic loan types when they purchase a home. They are:

• Conventional loans: traditional mortgage type that is not directly insured by the U.S. government.
• FHA loans: mortgages insured by the U.S. government and designed for low- to middle-income borrowers.
• "VA loans": mortgages offered to military service members and insured by the Veterans Administration.

 Each of these loan types have varying rates, points and fees, and must be selected on a case-by-case basis depending on the borrower's short- and long-term financial outlook. It is important to compare loan details before deciding on a financial product, and professional mortgage consultants can offer loan advice on finding the interest rate, monthly payment and loan term that best suits a customer's needs.

Contact the Experts for Mortgage Rate Advice

Your trusted mortgage advisor provides you with rate comparisons, loan reviews and expert negotiation skills, no matter what your current credit score or financial situation. Email info@trusted-mortgage-advice.com for a home loan or refinancing review of your loan.