Frequently Asked Questions

What is an APR?

- APR (Annual Percentage Rate) is defined as the annual cost of the loan and is expressed as a yearly rate. The APR is slightly higher than the interest rate on the loan, because it takes into account interest, points, origination fees and mortgage interest.

What are points?

- Paying points is one way of reducing the interest rate on a mortgage. One point is equivalent to one percent of the loan amount. If you plan to live in your home for a long period, it makes sense to pay points up front, because the savings over time will be a considerable amount.

Why is the APR different from the interest rate?

- The annual percentage rate is intended to reflect the total cost of a mortgage loan. To calculate the APR, lenders consider the interest rate on your mortgage loan, the term of the loan, and other loan fees such as closing costs, points, etc. Your monthly payment is calculated based on the mortgage note rate, not the APR. The APR will be higher than your interest rate, especially if you are paying any points.

Fixed or Adjustable rate mortgage - Which is better?

- As interest rates and mortgage options change often, your choice of a fixed or adjustable rate mortgage depends on:

The interest rates and mortgage options available when you're buying a house.

your view of the future (generally, high inflation will mean ARM rates will go up and lower     inflation means that they will fall).

Your personal financial and investment goals.

Do I need to sell my existing home before I apply for a new mortgage loan?

- Absolutely not! You can apply for a new mortgage loan before you sell your current home. However, depending on your income and debt levels, you may need to sell your current home before you can close on your new home.

Can I buy a home with little or no down payment?

- For low down payment or even no down payment loans seperate structured programs are designed by the Housing authorities and lenders. These programs may have added expenses like a higher interest rate or private mortgage insurance. So, before you choose a low down payment or no down payment loan, make sure you know the costs associated with it.

What documents are required when I apply for a mortgage?

Normally, any lender would require you're:

- Personal records
- Employment records
- Financial records

What will my mortgage payment comprise of?

- Generally, A mortgage monthly payment will comprise of costs of principal, interest payments, property tax, hazard insurance (if applicable) and mortgage insurance (if required by lender).

Who can tell me what my property taxes will be?

- The seller and/or your Realtor should provide you with the current taxes for the property. Property taxes are reassessed from time to time, so this amount may change. If you would like to confirm what your taxes would be, you can contact the county Recording Office.

What is a mortgage escrow account??

- Your mortgage lender will set up an escrow account for purposes such as taxes, hazard insurance, assessments and mortgage insurance premiums. You will be required to make periodic payments in to this account, often on a monthly basis.

Do I have to escrow my taxes and insurance?

- You can ask for a waiver of the escrow account if you meet the following conditions:

- Your LTV Ratio is lower than 80%,
- You have paid taxes and insurance regularly in the past, and
- You can pay them on your own.
Note that these conditions may not be acceptable to all lenders.