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1. 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 is an index and margin used in an ARM? Answer
4. How do I know which type of mortgage is best for me? Answer
5. What does my mortgage payment include? Answer
6. How much cash will I need to purchase a home? Answer
7.  Are there any no money down programs available? Answer
8.  Do you offer home improvement or rehab loans? Answer
9.  What are points? Answer
10. Should I pay points? Answer
11.  What is mortgage insurance? Answer
12.  I don't want to pay mortgage insurance, is there an alternative? Answer
13. What is an appraisal and how is it different than a home inspection? Answer

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 : How is an index and margin used in an ARM?
A : 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).
 
Q : How do I know which type of mortgage is best for me?
A : 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. Home Mortgage Lender can help you evaluate your choices and help you make the most appropriate decision.
 
Q : What does my mortgage payment include?
A : For most homeowners, the monthly mortgage payments include three separate parts:
  • Principal: Repayment on the amount borrowed
  • Interest: Payment to the lender for the amount borrowed
  • 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.
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    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
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    Q :  Are there any no money down programs available?
    A :  Absolutely!  Home Mortgage Lenders offers the USDA program that has no money down requirements.  Call for details.  Furthermore, if you are a veteran or in the military, you may be eligible for a no down payment VA loan.
     
    Q :  Do you offer home improvement or rehab loans?
    A :  Yes.  We offer FHA's 203k home improvement loan.  This loan can be used for a refinance or a purchase transaction.
     
    Q :  What are points?
    A :  A point equals to 1% of the loan amount.  Points paid typically allow you to get a lower rate than you might normally obtain.
     
    Q : Should I pay points?
    A : Ask your mortgage consultant to assess your particular situation.
     
    Q :  What is mortgage insurance?
    A :  Mortgage insurance is required by lenders anytime you put less than 20% down on a purchase of a home.  Mortgage insurance protects the lender against default on a portion of the loan.  This insurance is for the lenders protection and not yours.
     
    Q :  I don't want to pay mortgage insurance, is there an alternative?
    A :  Certain loan programs that Home Mortgage Lenders offers have no mortgage insurance.  These programs typically start at 5% down payment, ask for more details and we would be happy to explain your options.
     
    Q : What is an appraisal and how is it different than a home inspection?
    A :  An appraisal gives an opinion of value as determined by a state licensed appraiser that is ordered by the lender.  The appraiser does not warrant the condition or the operation of anything related to the home like heating and cooling or whether the roof leaks.  Those things can be determined by a ASHI certified home inspector.  Although a home inspection is not required by a lender, it is advisable to obtain one.