Your Global Realty Partner Collection of Resources
Credit Reporting
Free Report
Glossary Terms
Financial
Mortgage Calculators
Please note, these calculators are provided as a resource and do not have bearing on your loan.
What home can I afford?
How much can I borrow?
How much will my mortgage payments be?
Which lender has the better loan?
Which loan is better?
Which is better: fixed or adjustable?
Which is better: 15- or 30- year loan term?
How much should I put down for a new home?
How advantageous are extra payments?
Frequently Asked Questions
Home Loans - General Information
Q. What should I consider when deciding whether to rent or buy a home?
A. This decision is based on both you and/or your family's financial and lifestyle choices. From a lifestyle standpoint, you should consider whether or not you want to commit to living in a home for several years. To determine if it makes financial sense to buy, you should compare the cost of renting to the after-tax cost of owning. Use the Should I Rent or Buy? calculator for a quick estimate, then you can estimate possible rent increases and price appreciation of a home. These factors may affect your final decision.
Q. Is there a way to determine how much house I can afford?
A. No one wants to find the home of their dreams, only to discover that they can't afford the mortgage payments. You can use the How Much Can I Afford? to get a quick estimate of how much you can spend for a house using your estimated down payment and monthly mortgage payment. To get an idea of how much you can borrow based on your income, debts, and projected down payment, use the How Much Will My Mortgage Payment Be? calculator.
Loan Programs
Q. What is the difference between a fixed-rate and adjustable-rate mortgage?
A. Fixed-rate mortgages feature a steady interest rate, which is determined when you are approved for a mortgage and remains the same for the entire term of the loan. With adjustable-rate mortgages (ARMs) the interest rate may vary over the course of the loan. Typically, the interest rate is lower the first year, then increases at predetermined intervals. This means your payments increase as well.
Q. Why do interest rates fluctuate?
A. Basically, interest rates are tied to inflation and the reaction of the financial markets. An increase in inflation causes interest rates to rise, because lenders pool loans into securities and then sell them in the secondary market, competing with the entire pool of worldwide investment opportunities. Inflation causes the value of fixed-rate securities to decrease, therefore mortgage rates increase. For more information about interest rate trends, please see our Check Current Interest Rate [link needed] information.
Q. What are points?
A. A point is 1% of the loan amount. For example, with 2 points on a $300,000 house, you would pay 2% of $300,000, or $6,000. The number of points charged for a mortgage depends on the circumstances. Sometimes it is advantageous to pay higher points and get a lower interest rate, as you'll end up paying less over the life of your loan. You will pay the points fee when you close, and can deduct the point amount as interest on your income tax return. (Consult a tax professional.)
Q. What is PMI?
A. PMI is Private Mortgage Insurance. It is required when a borrower provides less than a 20% down payment on a house. This partially protects the lender from loss if the borrower fails to make their mortgage payments. Depending on your loan program, but generally when you've paid off 20% of your loan, you may ask for the PMI requirement to be removed. This will decrease your total monthly loan payment. When your loan-to-value (LTV) ratio is 80% or below, you may ask for the PMI requirement to be removed. PMI deletion requirements vary according to loan program and state requirements. Current First Horizon loan customers may determine eligibility to remove PMI Insurance by accessing our Interactive Telephone Response System. Simply call 1-800-364-7662, and after selecting your language preference, select option #2 for PMI information.
Credit Questions
Q. Can you approve my loan application before I shop for a house?
A. Yes. After we review your credit history and the additional information you provide, we may be able to provide you with a conditional approval. This is called a pre-qualification. This conditional approval is subject to a satisfactory title review and appraisal of the property that will secure your loan, and no substantial changes prior to closing in the information you provide. Generally, this will help you shop for a home in your price range, and gives you more negotiating power because it proves to sellers you are serious and more likely to have the funds necessary to purchase their home than a buyer who is not pre-qualified.
Q. How will my credit score affect my loan application?
A. Your credit score plays a significant role when you apply for a loan. Higher credit scores allow you more loan options and better interest rates. If you've had credit difficulties in the past, you may still qualify for some mortgage programs, but these usually cost more, depending on the severity of your credit problems.
Q. How can I improve my credit score?
A. Your credit score is based on the credit data available to the credit reporting agency on the day the score is requested by a lender. You can develop or improve your credit score by following these tips:
Pay your bills consistently and on time
Check your credit report and file a dispute to correct any errors
Keep your spending and debt under control
Maintain only a reasonable amount of unused credit
For example, keep the number of credit cards you use to a minimum. Avoid too many credit inquiries. Contact creditors immediately if you cannot make a payment on time. This may keep them from reporting your delinquency to a credit agency.
Q. What if I have little or no credit?
A. There are still ways to show a credit history. You can prove your good payment history on rent and utilities by obtaining references or credit letters from your landlord and utility companies. Provide a year's worth of checks to validate consistent payments. This information will become part of your loan application.
Q. I can barely meet my monthly bills. How can I consider buying a home?
A. Don't be discouraged. There are steps you can take to improve your financial situation. The best thing to do is seek professional counseling to help you try and stabilize your credit situation. National Foundation for Credit Counseling (NFCC) is a nationwide non-profit organization that provides credit counseling usually free, or for a reasonable fee. They can help you develop a solid plan for regaining control of your finances.
Q. How can I ensure that the information on my credit report is correct?
A. Your credit report reflects the information reported to the credit bureaus by each of your creditors. The information changes each time something is added or deleted from your credit file. For instance, paying off an account, opening several new credit accounts, or making a late payment on one of your accounts will appear on your credit record.
The best way to make sure that the information in your credit report is correct is to periodically request copies of your credit report. If you think an entry is in error, notify the appropriate credit bureau and request the error be corrected.
Contact information for the three leading credit reporting agencies:
Equifax Call 1-800-685-1111 or visit
www.equifax.com
Experian Call 1-866-200-6020 or visit
www.experian.com
Trans Union Call 1-800-888-4213 or visit
www.transunion.com
Online Security and Information Access
Q. Is my personal financial information safe when I use the calculators, complete the application, and submit it online?
A. Yes, and we understand your concerns. We use industry-leading security technology, which means all of your personal information is secure throughout the entire application process. For more information, please refer to our Security Policy. Furthermore, our Privacy Policy is of the highest standards. We do not collect information you enter into the calculators, and no one but you will see the information you've entered into the loan application until you click Submit.
Home Equity Loans and Lines of Credit - General Information
Q. What is equity?
A. A simple definition - equity equals ownership. It's the portion of your home that is actually owned by you (not your mortgage company). A more accurate definition of home equity is the difference between your home's market value and your loan balance.
Q. What does loan to value (LTV) mean?
A. LTV compares your total loan balances outstanding to the appraised value of the property.
For Example: Appraised Value = $100,000
1st Mortgage Balance = 80,000
Loan to Value% = 80%
Q. Will interest on my Home Equity Line of Credit be tax-deductible?
A. The interest on most consumer credit (auto loans and credit cards, for example) is not tax-deductible. Home equity credit is an exception. Why? because it's secured by your home. This classifies it as mortgage interest, which is usually 100% tax-deductible. According to the tax laws, interest on up to $100,000 of debt, secured by the equity in either your principal residence or second home, is fully deductible. Every rule has exceptions, of course. Check with your tax advisor first.
