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How Mortgages Work

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5 Most Common Mortgage Scams & How To Avoid Them

As a consumer in the real estate industry, an awareness of mortgage scams is crucial to protect yourself from falling victim to them.  A mortgage scam is when someone intentionally misrepresents information for their own profit or benefit. There are dozens of different mortgage scams, which can be perpetrated by mortgage lenders, real estate agents,...

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Fannie Mae vs. Freddie Mac: What’s the Difference?

If you’re in the middle of shopping for a mortgage (or will be soon), you’ll probably come across two companies: Fannie Mae and Freddie Mac. Ring any bells? Fannie Mae and Freddie Mac are home mortgage companies created by Congress that play an important role in the U.S. mortgage industry.  The two federally backed institutions...

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What Is the Federal Funds Rate and How Does It Affect Your Mortgage?

For many of us, the American economy has felt like a rollercoaster lately. Interest rate hikes have become the new normal, and you can’t seem to escape inflation in stores or on the news.  If you’re trying to buy a house, you’re probably wondering how interest rates and inflation will affect your home buying aspirations....

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The Secondary Mortgage Market and How It Affects You

If you take out a mortgage on a home, you might be surprised to receive your first bill from a bank you’ve never worked with before. You can thank the secondary mortgage market for that. When you take out a home loan, your lender can sell the loan – and the rights to collect payments...

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What Is Loss Mitigation and How Does It Work?

Sometimes, life brings unexpected surprises that make it difficult or impossible to keep up with your mortgage payments. If that happens, a lender can foreclose on your property. Foreclosures are rarely the desired outcome for borrowers or lenders; they usually end up being costly and inconvenient for everyone involved. That’s exactly why loss mitigation exists....

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11 Common Types of Home Loans for Buyers and Owners

Like snowflakes, no two home buyers are alike. And there are different types of mortgage loans to accommodate different types of buyers and home refinances. But every mortgage option has its benefits and drawbacks. That’s why it’s important to find the best home loan for your unique situation. To begin our journey through mortgage options,...

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Mortgage Subordination, Explained

If tapping into your home’s equity is in your future, so is a whole lot of paperwork. And whether you’re taking out a home equity loan or a home equity line of credit (HELOC) (both are types of second mortgages or junior liens), you may be presented with a subordination agreement to sign at closing....

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What Are Prepaid Costs When Buying a Home?

We’d be surprised if you never heard anyone say that a home is the biggest investment you may ever make. It would be surprising given the validity of this widespread notion. Most home buyers begin their real estate journey parting with a sizable chunk of their savings and then taking out a mortgage to pay...

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Lien vs. Encumbrance: What’s the Difference?

Oddly enough, owning a home does not give you complete control over it. There may be a variety of limits or claims on your property rights, including liens and encumbrances. Liens and encumbrances are different – and understanding these differences will help shed light on the broader topic of titles and other legal matters around...

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What Is Regulation Z and How Does It Protect You?

If you’re not familiar with Regulation Z, the name might sound ominous (images of a plotting Dr. Evil or Filch tacking magical decrees to the wall), but it’s one of the most successful consumer protection laws in the U.S. Regulation Z, also referred to as the Truth in Lending Act (TILA), established a series of...

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Mortgage Par Rates: A Complete Guide

If you’re shopping for a home loan, you’re probably familiar with the concept of mortgage rates. You probably also know that even a small change to that number can change the amount you pay in interest over the life of a loan by tens of thousands of dollars.  But you may not have heard of...

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Defeasance Clause: Definition and Overview

Real estate transactions are often chock full of complex terms, complex jargon and complex concepts. Even a question as simple as whether you or not you own your home after closing can result in a not-so-simple answer. (Hint: It depends on which state you live in.)  The answer to the question of ownership may rest...

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