|
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. MORTGAGE BY DESIGN 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 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. |
| |
|
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 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 |
| |
|
Q
:
|
Can I finance my closing costs? |
|
A
: |
We can almost always include your closing costs inside the loan in the case of a refinance. Some programs will also allow for us to include the closing costs in a purchase transaction in exchange for a higher interest rate. You can also negotiate with the seller in the case of a purchase transaction to have the seller contribute up to 3% of the purchase price towards your closing costs. |
| |
|
Q
:
|
Can the transaction be handled soley by mail and by fax? |
|
A
: |
Although we love to me the borrowers personally, we understand that in todays busy envirnment that is not always possible. Because we handle customers from all over Oregon we are happy to conduct the transaction by mail, fax or over the internet. |
| |
|
Q
:
|
Do I have to have an appraisal? |
|
A
: |
All property transactions will require and appraisal of some kind. The type of appraisal required depends on the specifics of the transaction. The appraisal itself is the property of the lender therefore previous appraisals may not be used. All appraisals are only good for a period of 6 months without updating for a maximum of 12 months. |
| |