Frequently Asked Questions

Q. How do I know how much house I can afford? 

A. 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. 

Q. What is the difference between a fixed-rate loan and an adjustable-rate loan? 

A. 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. 

Q. What does my mortgage payment include (PITI)? 
A. For most homeowners, the monthly mortgage payments include three separate parts: 

       1. Principal: Repayment on the amount borrowed

       2. Interest: Payment to the lender for the amount borrowed

       3. Taxes & 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. 

Mortgage Insurance = A policy that fulfills those obligations of a mortgage when the policy holder defaults or is no longer able to make payments. Normally only required for LTV's above 80% 

Q. How much cash will I need to purchase a home? 

A. 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 house 
    Down Payment: A percentage of the cost of the home that is due at settlement 
    Closing Costs: Costs associated with processing paperwork to purchase or refinance a house. 

Q. Are there any prepayment penalties charged for these loan programs? 

A. None of the loan programs we offer have penalties for prepayment. You can pay off your mortgage any time with no additional charges. 

Q. How do I lock my rate? 

A. Please contact your loan officer to discuss locking your rate.