Your down payment is the first payment you make on your mortgage loan. For example, if your house is worth $150,000, the lender requires you to pay a portion of that price upfront, called the down payment. Typically, it could be anything between 20% to 50% of the asset's price. So, at 20%, you have to pay $30,000 in advance to obtain the loan. Most financial institutions make it obligatory for the borrowers to pay the down payment.

You can pay the down payment from your personal savings or other legal sources. This payment for a home purchase is possibly the biggest single cash expenditure in most people's lives.

To obtain competitive mortgage rates, you'll need to pay at least 20% to 25% of your home's purchase price in a down payment. Some financial institutions require the borrowers to pay a mandatory minimum deposit in addition to the down payment.

Mortgages are price-sensitive, so one with a lower down payment has higher risk factors, which will warrant a higher interest rate. Plus, a low down payment can cause you to pay for private mortgage insurance. So, to get the best option at a reasonable interest rate, be prepared to pay out of your pocket in advance.

To get an overseas loan from Global Mortgage Group as a Foreign National, you will be required to pay only 25% in down payment. U.S. Expats get an unbelievably lower rate, which can be as little as 10% in down payment.

The annual percentage rate (APR) estimates the total interest rate you will pay on your mortgage, including any additional lender fees.

In your mortgage statement, you will see two interest rates, and the APR is always the one with the higher percentage. It accounts for all charges that come with the loan, showing the true cost of a mortgage.

There are two types of Annual Percentage Rates, fixed and variable. In the case of a fixed APR, the rate will be the same over the mortgage term. In the case of variable APR, it will change according to the changes in Treasury or WSJ prime rate index. Some credit card issuers may change the fixed APR rate from time to time but not without notifying the user 30 to 45 days prior.

Both APR types include the interest rate, discount points, and various charges like the closing costs, private mortgage insurance (PMI), to name a few. However, they don't include expenses associated with buying a home, such as a title search, title insurance, appraisal, transfer taxes, and more.

To acquire a good mortgage rate, you must clearly understand your interest rates and APR fees. If you take a 15-year loan, you need to pay the interest every month, but the APR has to be paid at the closing. Some institutions offer 0% APR if you can pay off the loan within a certain period.

When shopping for mortgages, compare APR rates offered by various lenders to find the best deal. Stay away from the lenders that warrant an unreasonably high APR for the same interest rate. However, don't get too focused on APR only because you may end up paying more by ignoring a lower interest rate for the sake of a low APR.

A tax imposed on a real estate property by the government is called property tax. The local government supervises the regulation and collection of such taxes within its jurisdictions.

● Some of the taxable properties are:
● Land (with or without constructions)
● Buildings
● Vehicles, RVs, and boats (in some states)

The local government sets up the property taxes based on either the market or appraised value of the properties. The assessed value is always lower than the current market price.

The property tax rates fluctuate as per the change in property value over time. The location of the property also impacts it. You pay more taxes if your property is situated in a prime location or a prestigious neighborhood.

Many taxing authorities use a "millage rate" instead of a percentage of the property's value to determine the taxes. One "mill" equals one-thousandth of a dollar. For instance, if the property tax rate on residential homes in your area is 20 mills, you will pay $20 for every $1,000 in the assessed price. If your home's assessed value is $350,000, you will pay $7,000 in taxes. In the case of a percentage system, it will be $17,500 at a 5% tax rate on residential properties.

Most property taxes have to be paid on an annual basis. However, if you feel the tax bill of your land or home is unreasonably higher, you can appeal to the local taxing authority for a reassessment.

Property taxes are a significant fund collection source for the local governments in the United States. They use this money to develop various public services and infrastructures.

Homeowners insurance is the insurance policy that ensures the protection of a home and its belongings from specific damages. You can take the insurance for a certain period and pay the provider's fixed monthly premium.

Standard home insurance is likely to cover your property from the damage caused by perils like storm, wind, hail, fire, theft, and more. Each coverage requires careful research and your living area's climate condition to decide what to keep and what not.

There is no legal obligation for a homeowner to get homeowners insurance. However, the lender may demand you to have a standard policy, at least during the mortgage period. It is also common to have a policy since it will help you recoup some financial losses after an accident. It would help if you also remembered to review the policy periodically and add and deduct the necessary clauses required for the protection of your house.

Assets refer to a wide variety of items you own that have a monetary value. When you apply for a mortgage, the lender looks into your asset inventory and determines their cash value to make sure that you are capable of returning the loan despite facing financial hardship, such as a job loss, during the repayment period.

There could be various asset types, including:

● Money, savings and checking accounts, certificates of deposit (CDs), and other similar sources — cash and equivalent to cash

● Tradable stocks, bonds, or something that can be converted to cash without dropping their actual price — liquid assets

● Lands, vehicles, antiques, business property, and anything that has monetary value but cannot be converted into cash quickly and may lose some of their value in the conversion process — fixed assets

● Investment money that is lent for interest, including government bonds, securities, and any type of investment money that yields interest — fixed-income assets

● IRA, 401(k) accounts, mutual funds, or anything that secures your ownership in a company — equity assets

You can also categorize them into tangible (physical) and intangible (nonphysical) assets. The lender assesses your positive net worth, indicating your assets have more value than your liabilities. It also helps establish your debt-to-income ratio.

To do the required evaluations, Global Mortgage Group requires only an International Credit Report, Accountant Reference, and some paper documents verifying your funds.

Escrow refers to a financial account in which the funds are managed by an intermediary like a law firm or dedicated escrow company on behalf of the two parties committed to a dealing or transaction.

The neutral third party won't release the funds until the deal is complete.

The use of escrow accounts is quite common in real estate dealings, but it's a valid means of keeping money on hold under a neutral party for any transaction.

During a home buying process, the first time you will need to use the escrow account is when making the earnest money deposit to reflect your intent of purchasing to the seller. You can get that money back if the appraisal returns the home's value lower than the sales price or the home inspection finds serious issues with the home.

If you purchase a home on loan, your mortgage lender will ask you to put some money into an escrow account for paying the homeowners' insurance premiums and property taxes. The provider uses money from this fund to pay tax bills and insurance premiums on behalf of the homeowner. It ensures that the bills are paid on time.

Every mortgage provider will do an escrow analysis each year because the rates of the insurance premium and property taxes are not fixed. This analysis ensures there are adequate funds in the account for paying these bills over the next year. The lender will send you a statement after each yearly review. There could be a shortage (not enough funds to cover the expenses) or overage (extra funds than necessary) in the account.

Setting up an escrow account is mandatory in any real estate transaction.