A buyers agent will work for you in your negotiation of your new home price. Having a buyers agent will also benefit you with helping you understand the legal aspects of the purchase contract.

The buyers agent will know how to protect you in the event that there is something wrong with the home such as a mold issue, structural damage, a leaky roof or any other problem, they will let you know what is common in your area and work on your behalf to make sure that you are paying the proper costs such as title insurance or tax stamps as every area may differ on who pays what, and the buyers agent also has the ability to narrow your search results and save you time when finding your new home.

One of the best things about working with a buyers agent is that it costs you no more than working without one. The commission to the buyers agents is paid from the sellers proceeds.

Having representation during this major purchase will be important for two specific reasons; first, you will have a real estate partner who has your best interests at heart, and second,your agent will have negotiation skills if there are any aspects of the process that are not suitable. A good buyer's agent may also have prior relationships with selling agents that will help your purchase offer stand out above other offers in the cases of multiple bids.

Conforming Loans - Conventional home mortgages eligible for sale and delivery to either the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC). These agencies generally purchase first mortgages up to loan amounts mandated by Congressional directive

Conforming loans are typically what brokers refer to as A paper loans for A borrowers.

Conforming loan amount limits may change from year to year. As of 2006 the conforming loan amount limit is $417,000.00 anything over that amount is usually considered a jumbo loan.

Besides setting the Conforming Loan Limits, Fannie Mae (FNMA) and Freddie Mac (FHLMC) also limits the type of homes used as collaterals for Conforming Loans. For a loan to be Conforming (eligible for delivery to Fannie Mae and Freddie Mac), the property used to secure the mortgage has to be a Single Family Residence, 2 family, 3 family, 4 family residence, condominium, cooperative, or Planned Unit Development. Loans that are secured by Mixed-use (residential homes with a commercial unit) and properties with more than four units are considered Non-conforming.

Conforming loans are the lowest available interest rates for home financing.

Conforming loans are easier to sell to investors.

One- to four- family mortgages in Alaska, Hawaii, Guam, and the U.S. Virgin Islands are 50 percent higher than the conforming limits for the rest of the country.

Loan amounts higher than conforming loan limits are considered jumbo loans.

Single-Family Mortgage Conforming Loan Limits effective January 1, 2006:
First mortgages
•One-family loans: $417,000
•Two-family loans: $533,850
•Three-family loans: $645,300
•Four-family loans: $801,950

Conforming limits for second mortgages
•$208,500
•In Alaska, Hawaii, Guam, and the U.S. Virgin Islands: $312,750

The $57,350 increase in conventional loan limits comes at an opportune time, as the interest rates have been creeping up since last August. A 30 year conforming loan at 6.25% versus a non-conforming (jumbo) loan at 6.75% would increase the monthly payment by $138, enough to pay for that MP3 player you wish you got at Christmas!

How to avoid mortgage insurance - If you have ever purchased or refinanced a home that is over 80% loan to value you have probably heard the term mortgage insurance or are currently paying it. There are several ways to avoid paying or keep the cost of mortgage insurance down.

To avoid Private Mortgage Insurance (PMI) on of the things that you may be able to do is to obtain a second mortgage. The lender will only require PMI on a mortgage that is 80% LTV or more and if you keep the first mortgage at 80% and get a second mortgage for the remaining 5-20% this will avoid the PMI.

There are programs with Lender Paid Mortgage Insurance (LPMI) . The rate is slightly higher, but it allows you to secure a mortgage over 80% and have the lender pay the mortgage insurance. Another benefit of this program is that the money you spend on a higher payment from the interest rate is tax deductible, whereas mortgage insurance is not.

If you get a low rate by paying mortgage insurance, it may well be worth paying mortgage insurance for the short term, if you plan on keeping your property for awhile.

Mortgae insurance is avoided in many "sub prime" and "alternative A" lending programs. Although the interest rates may be a little higher, the borrower must keep in mind that interest is tax deductable and the mortgage insurance premiums are not. Often when factoring in the increased tax deduction the sub prime type mortgage makes sense.

Talk to a loan specialist about our piggyback loan programs, which help avoid mortgage insurance entirely in most cases.

Mortgage insurance does not protect you, it protects the lender. If you can avoid having it, it is usually wise to do so.

Mortgage insurance costs decrease over time as you gain equity in your home. If the value of your home has increased and the principal balance of your mortgage is at or below 80% of the market value of your home, you may be able to have the mortgage insurance removed. Contact your mortgage company for details

The piggybacked 1st and 2nd mortgage is also known as a combo loan. Some of the different combos are the 80/20 (most common) 70/30 and you may even see any variation of those such as 80/10/10 etc... The second loan on these are what they call self insured loans. Although the second loan will have a higher interest rate you will almost always come out better on a combo loan versus one loan with MI. A couple of reasons why: 1 - your insurance isn't tax deductible where you interest payments on your second loan are. 2 - you can pay down your second lien off faster leaving you with a payment that is less once this is complete.

If you are currently paying for Private Mortgage Insurance premium on your mortgage, you may be able to drop the PMI coverage. Hire a certified appraiser to evaluate the value of your home. In most cases, a bank would not require PMI if the home value has increased so much where the outstanding loan balance is less than 80% of the increased value. Review your mortgage note or call your lender before ordering the appraisal.

Most people really don't understand mortgage insurance and think it is something designed to benefit lender. Mortgage insurance, also referred to as private mortgage insurance (PMI), is the reason borrowers were first able to buy home with little or no money down. Loans with less than 20% down are considered high-risk loans and lenders didn't make them before PMI. With the advent of PMI, the risk to lenders was lessened and they were willing to make loans with little money down.