 |
| Q |
Is there any financial obligation to completing an application with your company? |
| A |
No. |
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| Q |
If I haven't found a property, can I still apply for a loan with you? |
| A |
Certainly. In fact, applying for a loan can be a great help in your search for a home. |
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| 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. |
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| Q |
How long is my interest rate lock good? |
| A |
There are different
time frames available for each rate ranging from
about 7 days to 60 days. Generally the longer
time frame of your lock the higher the cost or
rate. Your loan officer will work with you to
figure out the best time frame to lock in
on. |
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| 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. |
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| 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). |
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| 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. Seattle Mortgage can help you evaluate
your choices and help you make the most
appropriate decision. |
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| Q |
What does my
mortgage payment include? |
| A |
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. |
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| 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 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 |
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| Q |
How long will it
take to close this loan? |
| A |
Generally, we can
close your loan within three to four weeks.
However, if you delay in returning your
documentation, or there is a problem with your
title work or appraisal, the process may take
longer. |
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| Q |
I have an
appraisal, can I use it? |
| A |
You can use an
existing appraisal if it’s fewer than 4 months
old, the appraiser is on our approved appraiser
list, and the appraisal is reassigned in Compass Point Lending's name. Otherwise, we will require a
recertification from one of our approved
appraisers and a fee will apply. |
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| Q |
Do I need a
survey? |
| A |
Check with your
local title company to see if a survey is
required in your state. If you have a survey
that is fewer than 10 years old, we can probably
use it. Otherwise a survey will need to be
ordered by your title company. |
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| Q |
Can I choose my own
title company? |
| A |
We are happy to
work with any title company you request. If you
do not specify a title company when you go into
process, we will automatically default to one of
our providers. |
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| Q |
Can I choose my own
appraiser? |
| A |
Unfortunately, you
can not pick your own appraiser as this could
present a potential conflict of interest. Our
investors require that appraisals be provided by
pre-approved appraisers. |
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