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How do I know how much house I can afford? |
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Generally speaking, you can purchase a home with a value of two or three times your annual household income. However, the amount that you can borrow will also depend upon your employment history, credit history, current savings and debts, and the amount of down payment you are willing to make. You may also be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value. Give us a call, and we can help you determine exactly how much you can afford. |
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What is the difference between a fixed-rate loan and an adjustable-rate loan? |
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With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest changes periodically, typically in relation to an index. While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan will likely change. There are advantages and disadvantages to each type of mortgage, and the best way to select a loan product is by talking to us. |
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How is an index and margin used in an ARM? |
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An index is an economic indicator that lenders use to set the interest rate for an ARM. Generally the interest rate that you pay is a combination of the index rate and a pre-specified margin. Three commonly used indices are the One-Year Treasury Bill, the Cost of Funds of the 11th District Federal Home Loan Bank (COFI), and the London InterBank Offering Rate (LIBOR). |
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How do I know which type of mortgage is best for me? |
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There is no simple formula to determine the type of mortgage that is best for you. This choice depends on a number of factors, including your current financial picture and how long you intend to keep your house. Affordable Mortgage, LLC can help you evaluate your choices and help you make the most appropriate decision. |
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What does my mortgage payment include? |
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For most homeowners, the monthly mortgage payments include three separate parts: Principal: Repayment on the amount borrowedInterest: Payment to the lender for the amount borrowedTaxes & Insurance: Monthly payments are normally made into a special escrow account for items like hazard insurance and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company. |
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How much cash will I need to purchase a home? |
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The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply:Earnest Money: The deposit that is supplied when you make an offer on the houseDown Payment: A percentage of the cost of the home that is due at settlementClosing Costs: Costs associated with processing paperwork to purchase or refinance a house |
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Should I refinance? |
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Benefits of refinancing may be:
- Lowering your interest rate
- Lowering your monthly mortgage payment
- Lowering your montlhy debt payments by consolidating debt
- Getting 'cash-out' for a vacation, home improvements, or to pay for college
- Refinace to a shorter term mortgage to pay off your mortgage sooner and lower your interest rate.
To find out if refinancing is right for you. Email or call one of our mortgage professionals. |
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Should I consolidate debt? |
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Consolidating high interest credit card debt, auto loans, consumer loans, and student loans into one low rate and payment through a Refinance or Home Equity Loan or Line of Credit can be a smart financial decision. You can lower your monthly debt payments and save hundreds even thousands of dollars in interest by consolidating into one low mortgage rate.
If you want to find out if Consolidating Debt is right for you, email or call one of our mortgage professionals today. |
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What are points? |
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Points, known as origination fees or discount points are payable at loan closing. One point equals one percent of the loan amount. Generally speaking, the higher the points, the lower the interest rate. In other words, you can lower your monthly mortgage payments by paying more up front through points. |
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What are closing costs? |
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Closing costs are fees charged by the lender and other third party vendors in order to complete the loan transaction. Closings costs include origination fee, discount points, underwriting and administration fees, credit report fees, apparisal fees, document preparation fees, Title Company fees, recording fees, courier, express and e-doc fees. to name the usual.
Title Company fees can include title insurance, title endorsemtns, tax certificates, real estate clsoing fees, loan closing fees, courier fees and e-doc fees.
Different fees apply, depending on what type of loan transaction. |
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