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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, but with computerized underwriting you may be able to qualify for much more. 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 your broker. |
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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. With hundreds of different types of loans, it can be very confusing. Brenner Mortgage will help you evaluate your choices so you can make the right decision on which mortgage is best for you. |
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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 borrowed
Interest: Payment to the lender for the amount borrowed
Escrows: Monthly payments are normally made into a special escrow account for items like hazard insurance, property taxes, and mortgage insurance if applicable. 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 you pay when you make an offer to purchase a new house. It is credited back to you at closing.
Down Payment: A percentage of the cost of the home that is due at settlement. We have loans that don't require a down payment.*
Closing Costs: Ttile charges and other costs associated with getting a mortgage to purchase or refinance a house. These can be paid by the seller with most types of loans.*
Prepaids: First years Homeowner's Insurance, escrows, and interest from the date of closing to the end of the month. These can be paid by the seller with most types of loans.*
* We have "no down payment" loans that allow you to finance closing costs and prepaids. |
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