"Most people spend more time researching the VCR or DVD player they plan to buy than they do making sure the mortgage they select is right for their specific financial needs. A DVD player costs $200 to $300, but most homeowners will pay $10,000 to $50,000 per year on their mortgage payments. Make sure you work with a mortgage planner who takes the time to structure your mortgage loan so that it works well with your overall financial strategy."
—Barry Habib, Mortgage Market Analyst, CNBC

Buying a home is an exciting experience and one of the most critical financial decisions of your life. Because the process can be overwhelming, it is important that you have a lender that you trust. The Joe Brown Team is committed to guiding its customers through the loan process--from application to closing. Our primary objective is to help you be informed buyers, so your home purchase is a positive one! We want to be your lender for life!

It is to your benefit to be pre-approved for a loan before you begin looking for a house. With this simple process, you will know exactly what price range in which to shop. Once you find the home you want, you may have some negotiating leverage with the sellers by providing them with our pre-approval letter. This is especially helpful if yours is one of several offers on the same property.

The Joe Brown Team and Milestone Mortgage Corporation represent more than 40 different mortgage investors. Your advantage in this arrangement is that we can "shop" among several sources to obtain the best rate and terms available, much like an independent insurance agent would for his insurance customers.

We can help you compare the various types of mortgages available so that you can choose a product that best fits your needs. The most popular mortgages today can be classified into 3 basic types:

1. Fixed rate. You make a fixed payment, usually for 15 or 30 years, and the loan is paid off. If you make additional principal payments, the term (i.e. the number of payments) is reduced, but your monthly principal and interest payment remains constant.

2. Flex term. This loan is designed around the fact that most people keep a mortgage less than 7 years, so you don't pay for something you may not need. You can choose from 3, 5, 7 or 10 year terms, with payments amortized over 30 years. The benefit is a lower payment than a fixed rate loan, or you can qualify for more home. There is also an interest only version of this program.

3. Adjustable rate mortgage (ARM). This loan program has the lowest initial monthly payment because the beginning interest rate is below the fixed or flex term program. Adjustments to the rate, usually in 6 or 12 month intervals, are limited by "caps" to prevent major changes in monthly payments. This loan program is best for borrowers who expect a 2 to 3 percent annual increase in income to offset potential payment increases.

At the time of application, we will give you an estimate of the amount of money required to close your loan. In addition to the down payment, there are closing costs which can be divided into 3 components:

1. Fees for services performed in the actual processing and closing of your mortgage. This would include the origination fee and fees for items such as the appraisal, credit report, survey, legal documents, etc.

2. Fees related to the type of financing or interest rate. These are commonly called "points" and are quoted as a percentage of the loan amount. The function of points is to entice the investor providing the money for your mortgage to make a loan at a rate better than the current market. For instance, if the current rate is 8% and you wanted 7%, the investor would be willing to settle for a 7% return if they received enough cash at closing to bring their yield on your loan to the current market rate. The main "point" to remember is, there is no free lunch. If the ad says "no points, no origination fee, no ..." then expect a higher rate than market. If the rate looks lower than the going rate, look for added points. Points are not "bad", they are simply a function of supply and demand. To better understand points, think in terms of payback. Eventually, the cost of paying points will be recovered and the benefit of a lower rate will be realized.

3. Pre-paid items. These include property taxes, homeowner's insurance (plus mortgage insurance if required) and interest on the mortgage from the date of closing to the end of the month. Depending on the loan program and down payment, you may have the option to pay taxes and insurance separately. The earlier in the month you close your loan, the more pre-paid interest you will pay at closing; however, you will have more time before your first full payment is due. There is no advantage to closing on any particular day of the month.