Answers To All Your Questions
What do I need for a Loan Application?
Employment information for the past 2 years.
Residence address for the past 2 years.
W-2 and tax returns for the past 2 years.
All bank account statements for the past 2 months.
Pay stubs for the past 1 month.
Copy of Social Security card and other form of photo I.D.
Loan information on other real estate properties.
Divorce, foreclosure, and/or bankruptcy (if applicable)
Certificate of Eligibility and DD214's (VA)
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. 1st Phase Mortgage 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, 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.
What is a Loan Officer, and what does he or she do?
Also referred to as "Mortgage Loan Originators", are people who work for banks and other financial institutions with the main objective to recommend individual and business loan applications for approval and participate in the front end of the mortgage origination process. Loan officers specialize in commercial, consumer and mortgage loans.
Although they are employed by financial institutions, they can be seen as intermediaries between lending institutions and borrowers. They solicit loans, represent creditors to borrowers, and represent borrowers to creditors.