How much will I qualify for? The amount you qualify for is based upon your income and debt. Traditionally you qualify for 3.5% of your gross income? Once we have rec’d your application and pulled your credit, we will determine your prequalification amount.
How much is my Down Payment? Traditionally the down payment is 3.5% of the loan amount you qualify for. If you qualify for a VA home loan or USDA home loan, there is no down payment required.
Where can I buy my home? Anywhere in the state!
Can I qualify if I am 1099 or self-employed? 1099 is considered self-employed, you will need to be 1099 for (2) years and it will need to be reported on your tax returns. The amount on your last two years’ tax returns averaged over the two years. For example, if you make $30k in 2015 and $40k in 2016 – those two averaged is a qualifying amount of $35k (add the two and divide by 2)
What criteria do you use to evaluate my loan application? Based on the information you submit in your application, we complete an analysis of your financial situation, including calculating income-to-debt qualifying ratios, reviewing your credit history and outstanding liabilities, employment history, current income, availability of assets for the down payment, including closing costs, and your financial reserves.
How long is the loan process? In general, you should allow 30 days from the time you sign the purchase agreement until closing.
Are the interest rates high? The interest rate varies daily. However, it is against the law to charge extremely high interest rates due to credit scores. That is called predatory lending and as of 2010, the law will not allow predatory lending on home loans.
How do I know how much house I can afford? 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.
What is the difference between a fixed-rate loan and an adjustable-rate loan? 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.
How is an index and margin used in an ARM? 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).
How do I know which type of mortgage is best for me? 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. Expert Financial Enterprise can help you evaluate your choices and help you make the most appropriate decision.
What does my mortgage payment include? 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.
How much cash will I need to purchase a home? The amount of cash that is necessary depends on a number of items. Generally speaking, 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
What fees are typically included in closing costs? Closing costs are expenses over and above the price of the property. Closing costs include all escrow and title insurance fees, property taxes, city transfer taxes (if any), prepaid interest due, other miscellaneous fees including, but not limited to, overnight delivery, recording, notary fees and loan-related charges (appraisal, credit, tax service, flood certification fees). Closing costs usually amount to between 2 and 4 percent of your loan amount.