Your final closing costs are itemized on the HUD-1 (or in some cases HUD-1A) Settlement document. It is important to note that Good Faith Estimates or Preliminary HUD documents are not final, the HUD which is signed at the loan closing is the one which has the actual final values.

If you take notice to the numbers to the left of the document on each line, they will coinciide with the numbers listed on your Good Faith Estimate. Although you GFE is an estimate and barring any major changes in the loan program they should be fairly close.

The HUD1 statement should be reviewed by all parties involved in a transaction before the closing to make sure it is accurate. A delay in closing will be caused by inaccurate information.

The HUD1 statement is typically needed when you are selling one home and purchasing another. This will satisfy the banks requirement that the sale of the home has occured.

Although the HUD 1 settlement statement may appear confusing to many borrowers, it is important the the borrower understand the statement. If the borrower feels that any thing on the statement is incorrect is should be brought to the attention of the settlement agent imediately. the statement is required by law ro be 100% accurate.

The HUD1 statement is an important document that should be retained by the borrower in case it is needed in the future. It can often be used by the borrower's tax preparer as some items may be tax deductable.

Interest Only Mortgage - An interest only mortgage is a mortgage were the borrower(s) pay only the interest payments on the loan. Generally the term of an interest only mortgage is over 30 years with the interest only period either 5 or 10 years and then the loan will re-amoritize into a principle and interest loan for the remaining 20 or 25 years.

Interest Only mortgages are a great way to increase your cashflow. Often it is smartest to instead of throwing money at the mortgage to instead take an Interest Only mortgage. This will allow you more money each month to pay off other high interest rate debt.

You should weigh your options when considering an interest only loan. Don't hesitate to contact me to discuss your unique situation.

With most interest-only payment option loans, you can always pay extra towards the principal you owe at any time. When times are flush, pay down that principal. When times are tough, pay only the interest-only payment. You decide.

In areas with high appreciation such as 10% - 20% per year it's not necessary for a person to pay down the principle on a morgage to reap great profits in an investment property. This is where many people use I/O loans along with Neg-Am products.

Often times lower income borrowers or first-time homebuyers will apply for an interest only mortgage. This helps reduce their monthly mortgage cost while still being able to get into a home. Investors buying investment/rental properties will apply for interest only loans reduce monthly debt on their properties while increasing their cash flow from the rental payments.

The easiest way to figure the payments on an interest only mortgage is; loan amount x interest rate percentage / 12. An example of the payments on a $150,000.00 mortgage with a 7.50% rate would be;
150,000 x 7.50% = 11250 / 12 = 937.50

Interest only payments will not reduce the principal balance of your mortgage.

Another advantage of the interest only mortgage is that most lenders allow the borrower to qualify at the interest only payment. Since this payment is lower than a fully amortized payment, the result is that the borrwer can qualify for a larger mortgage, usually meaning a better or bigger house.

Having an interest only loan helps you to keep your monthly payments low. Although you do not reduce the principle balance of the loan, your house will appreciate over time, thereby building equity.