Frequently Asked Questions
Q: How do I know how much house I can
afford?
A: Generally speaking, you can purchase a home with a value two or
three times your annual household income. However, the amount that
you cn 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 homebuyers to purchase a home
with a higher value. Please call us and we can go through your
options.
Q: How is an index and margin used in an
ARM?
A: An index is an economic indicator that lenders use tose the
interest rate for an ARM. Generally the interest rate that you pay
is a combination of the index rate and the pre-specified margin.
Three commonly used indexes are:
-One-Year Treasury Bill
- (COFI) The Cost of Funds of the 11th District Federal Home Loan
Bank
- (LIBOR) London InterBank Offering Rate
Q: How much cash will I need to purchase
a home?
A: Earnest Money: The deposit that is supplied when you make an
offer on the home.
-Down Payment: Optional (\WE DO ZERO DOWN LOANS)
-Closing Costs: Costs associated with processing paperwork, title,
and lender fees.