Frequently Asked Questions
Q : How do I know how much house I can afford?
A : Typically two or three times your annual household income, but this also depends on your employment & credit history, available assets, debts, and the amount of your down payment.
Q : What is the difference between a fixed-rate and an adjustable rate loan?
A : With a fixed-rate the interest rate stays the same during the life of the loan. With an adjustable rate (ARM), the rate changes periodically, so payments on an ARM loan will likely change.
Q : What does my mortgage payment include?
A : For most homeowners it include three separate parts:
1. Principal - the repayment on the amount borrowed
2. Interest - payment to the lender for the amount borrowed
3. Taxes & Insurance - monthly payments to an escrow account for items like hazard insurance and property taxes (sometimes optional, if so you will pay these annaully to the County Tax Assessor and yourproperty insurance company.
Q : How much cash will I need to purchase a home?
A : This depends on a number of items, but in general you will need:
1. Earnest Money - the deposit paid with your offer on the house,
2. Down Payment - paid at closing
3. Closing Costs & Prepaids - the costs associated with the purchase or refinance a house
4. Reserves - some loans require funds remaining after closing
Of course you may have other questions, so please feel free to email or call and I'll be glad to respond.
Cromer Mortgage Services, Inc.
My Mortgage Guy