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How do I know how much house I can afford? Answer |
| 2. |
What is the difference between a fixed-rate loan and an adjustable-rate loan? Answer |
| 3. |
How do I know which type of mortgage is best for me? Answer |
| 4. |
What does my mortgage payment include? Answer |
| 5. |
How much cash will I need to purchase a home? Answer |
| 6. |
What is a Pre-qualification? Answer |
| 7. |
What is a Pre-approval? Answer |
| 8. |
What information do I need to provide when I apply? Answer |
| 9. |
Is there a cost to apply? If so, how much? Answer |
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Q
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How do I know how much house I can afford? |
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A
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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 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. CLASSIC HOME LOANS 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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What is a Pre-qualification? |
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The process of determining how much money a prospective homebuyer will be eligible to borrow before a loan is applied for. |
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What is a Pre-approval? |
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This allows you the ability to get approved for a specific loan amount prior to finding the home you want to purchase. The loan is underwritten and the lender commits to a specific loan amount. This can give you a great advantage with a homeowner or realtor if someone else is interested in the same home at the same time. Also, if you are thinking about refinancing and want to pay off creditors or take cash out, but you are not sure you would qualify - you can apply for a pre-approval and could save on cost of getting an appraisal on your home until you know if you qualify. |
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What information do I need to provide when I apply? |
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When you are ready to apply, you need the most current information on your monthly income and debt, a total of your assets, and your social security number and employment information. |
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Is there a cost to apply? If so, how much? |
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Yes, if you are just needing a pre-qualification or a pre-approval at this time then all you will need to pay is $25.00 for a credit report. This is either for a single person or a married couple. If 2 unmarried people apply together they would each need a credit report at $25.00 each. The appraisal fee would be paid later once you decide on a specific property.
If you have a contract and want to also go ahead with the full approval with an appraisal, the appraisal fee is also due at the time of application. Depending on what type of loan it is, the appraisal fee can range from $300.00 to $400.00.
The fees can be paid by a credit card through Paypal right here on our website by going to Loan Center, then Online Payments and choose what you want to pay for. Or if you come in to the office and meet with us for the application you can write a check for the fees. |
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