Mortgage Help   Mortgage Rates Real Estate Credit Foreclosure Tax Mortgage Rates Mortgage Basics Chapter 1: How much house can you afford? Homeownership Should You Buy or Rent Summary   Chapter 2: Adjustable-rate mortgages ARM and a fixed-rate mortgage Fixed-rate mortgages Understanding the key elements Which type of lender is right for you? Other types of mortgages Subprime Summary   Chapter 3: Your credit score Down Payment How lenders set rates Low down payments Mortgage insurance Your mortgage payment Mortgage Points Summary   Chapter 4: The good faith estimate Inspection and Insurance Necessary paperwork for a buyer Other lender paperwork Paperwork and fees Prequalification and preapproval Special circumstances Summary   Chapter 5: Ten questions to ask Turned down for a mortgage Underwriting What lenders ask Summary   Chapter 6:  Understanding the closing process Escrow Summary   Chapter 7: When your mortgage is sold Avoiding foreclosure Paying ahead Payment changes Refinancing Removing mortgage insurance Summary Summary Your monthly mortgage payment depends on many factors, including the size of your down payment, your credit score and the number of discount points you pay. A down payment of less than 20% will require that you must pay for PMI, get a piggyback loan or pay a higher interest rate. Your credit score is an accounting of your credit history - if you pay bills on time, how much debt you have, how much you earn and the types of debt you hold. Before you apply for a mortgage, you should check your credit reports so that you can correct any errors or prepare explanations. When you are unable to put 20% down on your mortgage, you will have to pay a higher interest rate and take out PMI. There are ways to avoid paying PMI, including piggyback loans. Borrowers with little or not down payment savings can find mortgages through FHA and VA programs. They can also get contributions from down payment assistance programs. There are also zero-down mortgages that come with higher interest rates. You can reduce your interest rate by paying discount points at closing. The point is equal to 1% of the loan amount. You should only pay points if you plan on owning the home long enough to make up for the out-of-pocket expense of paying the points up-front. This usually takes several years. Interest rates depend on the secondary market where your lender sells its mortgages. You can watch the market to see when is the best time to take out a mortgage.