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PERSONAL LOANS – MORTGAGE INFORMATION

What Is a Mortgage?
A mortgage is a loan to finance the purchase of your home. It is one of the largest and most important personal investments that you will make. Your home serves as the collateral for the loan that you agree to pay back over a 15- to 30-year period.

Loan payments typically include:
     • Principal: The portion of the house price financed by your financial institution.
     • Interest: The percentage the financial institution receives for lending you the money.
     • Property Tax: The local government tax fee, based on percentage of the assessed value
       of your home.
     • Mortgage Insurance: Insurance coverage designed to protect the financial institution
       against home purchasers who do not make their mortgage payments. (Applicable
       only when the down payment is less than 20% of the purchase price of the home.)
     • Homeowner's (Hazard) Insurance: Required coverage that protects your home
        investment in case of fire, burglary, etc. by funding the rebuilding or replacement of         damaged or stolen property.

What type of loan is best for you?
There are various types of home mortgages. Each mortgage loan is designed to meet specific financial and timeline needs for the borrower. To make sure you select the right loan for you, talk to one of the home loan specialists at Bank of Luxemburg.

Adjustable Rate Mortgage (ARMs) interest rates will change periodically, sometimes as soon as 6 months into the loan. Make sure you research the limit, or cap, on how high your ARM can adjust. Long-term ARMs (5+ years) may be a good choice if you have a fixed or declining income, and short-term ARMs (3 years or less) if your income is increasing.
Fixed Rate Mortgages are a good choice if you plan on living in your home for more than 5 years, and you want the lowest monthly payment possible. A 15-year fixed rate mortgage will allow you to amass your equity more quickly than a 30-year fixed rate mortgage, but will produce higher payments.
Balloon Mortgages are a good choice for those who plan on being in your home for less than 5 years. It allows you to pay shorter payments for a certain amount of time and one large payment for the remainder of the loan after a specified number of years.FHA/VA Mortgages are for those who cannot afford a down payment. Once you get pre-approved, ask your financial institution about these loan types.
Jumbo Mortgages allow you to borrow more than $417,000 but typically carry a higher interest rate.

Bank of Luxemburg can help you every step of the way:

Obtain a credit report and explain the value of credit scores and ways to fix any problems that may exist in your credit history.
Develop a Household Budget that will factor in how much of a house payment you can comfortably afford.
Begin the mortgage process by scheduling a visit with one of our loan officers.
Give us a call to set up an appointment!

www.fdic.gov

www.hud.gov

NOTICE OF CHANGES IN TEMPORARY FDIC INSURANCE COVERAGE FOR TRANSACTION ACCOUNTS
All funds in a "noninterest-bearing transaction account" are insured in full by the Federal Deposit Insurance Corporation from December 31, 2010, through December 31, 2012. This temporary unlimited coverage is in addition to, and separate from, the coverage of at least $250,000 available to depositors under the FDIC's general deposit insurance rules.

The term "noninterest-bearing transaction account" includes a traditional checking account or demand deposit account on which the insured depository institution pays no interest. It also includes Interest on Lawyers Trust Accounts ("IOLTAs"). It does not include other accounts, such as traditional checking or demand deposit accounts that may earn interest, NOW accounts and money market deposit accounts.

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