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How do I start the process of buying a home? Answer |
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How do I know how much house I can afford? Answer |
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How do I decide on a neighborhood? Answer |
| 4. |
How do I find out how much homes cost in the neighborhood I choose? Answer |
| 5. |
What are the tradeoffs in buying a new home versus an older home? Answer |
| 6. |
What should I think about when looking at a house? Answer |
| 7. |
How much cash will I need to purchase a home? Answer |
| 8. |
What are closing costs? Answer |
| 9. |
What are points and how many do I have to pay? Answer |
| 10. |
What is Earnest Money? Answer |
| 11. |
What is PMI? Answer |
| 12. |
How do I know which type of mortgage is best for me? Answer |
| 13. |
When should I apply for my mortgage? Answer |
| 14. |
Should I check my credit history before applying for a mortgage loan? Answer |
| 15. |
How do I know what my loan rate will be? Answer |
| 16. |
What is a rate lock? Answer |
| 17. |
What is floating? Answer |
| 18. |
What is the difference between a fixed-rate loan and an adjustable-rate loan? Answer |
| 19. |
How is an index and margin used in an ARM? Answer |
| 20. |
What does my mortgage payment include? Answer |
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Q
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How do I start the process of buying a home? |
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Start by thinking about your circumstances. How large a monthly payment can you afford? How much space do you need? What neighborhoods do you like? Would you like a home with a yard or would you prefer living in a condominium? Start researching home listings in the newspaper, exploring neighborhoods, and talking with family and friends. |
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How do I know how much house I can afford? |
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Your job stability, how much cash is available for a down payment, your credit history, and the ratio of the size of the loan to the value of the property are considered in evaluating the amount of a mortgage that you qualify for. We will pre-qualify you before you starting shopping for a new home. This way you will know how much you can afford to spend on a new home, plus you will have a stronger negotiating position when the seller knows that you are a qualified buyer.
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How do I decide on a neighborhood? |
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Choose a neighborhood based on how you wish to live your daily life. If you have children, the school system and activities for kids will be important considerations. Maybe you want to live near work or relatives. Some people choose a community with cultural or athletic events or with easy access to good medical facilities, shopping, and public transportation. Others choose a rural environment where they can enjoy the beauty of nature. Visit the communities you are considering and talk with residents. Ask what they like and don't like about living there. |
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How do I find out how much homes cost in the neighborhood I choose? |
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If you are working with a realtor, they have access to a database showing comparable sales or may be able to give you a ballpark figure by showing you listings on similar properties. You can also find some helpful information on the Internet. |
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What are the tradeoffs in buying a new home versus an older home? |
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New homes tend to have architecture that is more modern. They generally have newer heating and cooling systems and plumbing and are generally more energy efficient. When you buy a new home, initially you should not have to worry about maintenance and repairs. Older homes may have more ambiance and be in more established neighborhoods. They may have millwork and architectural details that would be prohibitively expensive today. Your maintenance, repair, heating, and cooling costs are apt to be higher in an older home. |
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What should I think about when looking at a house? |
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Some things to think about include:
- Do you like the floor plan? Are there enough bedrooms, bathrooms, and living space for your family?
- Do you like the kitchen and bathrooms?
- Do you like the ambiance?
- Where will the sun rise and set? Will you have sunshine where you want it as the day progresses?
- Will your furniture fit in the rooms and will it go with the color scheme?
- Is there enough storage space?
- Is the house structurally sound?
- Do the mechanical systems and appliances work?
- Is the yard big enough for your entertaining, recreational, and gardening interests?
- Are there steep driveways or outdoor stairs that pose winter hazards?
- Are there necessary repairs or replacements? If so, will the seller take care of it.
Make a list of what is important to you. Take your time when you tour a home and make notes. Use all your senses. Ask your realtor for a professional opinion.
Also, check to see if the house is in a low-lying area prone to flooding, in an area at risk for natural disasters, or in a hazardous materials area. Be sure the house meets building codes. Check how local zoning laws could affect remodeling or future additions to the home.
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How much cash will I need to purchase a home? |
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The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need the following;
- Earnest Money: The deposit that you need to provide when you make an offer on the house.
- Down Payment: A percentage of the cost of the home that is due at time of settlement.
- Closing Costs: Fees associated with the processing and closing of your mortgage loan
- Escrows: Deposits made with the Lender at the time of settlement that will be used to cover the payment of real estate taxes and insurance.
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What are closing costs? |
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Closing costs are monies paid by the borrower to close a mortgage loan and normally include a loan origination fee, title insurance, attorney's fees, underwriting fees, recording fees, etc. In addition some prepaid items are collected, such as deposits for property taxes and insurance.
We do offer programs that have reduced or no closing costs for a slightly higher interest rate. |
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What are points and how many do I have to pay? |
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You can pay points to buy down or lower your mortgage interest rate. One point is equal to 1% of the loan amount. If you pay points to lower your rate you will save money if you keep the mortgage long enough. |
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What is Earnest Money? |
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Earnest money is money put down to show your seriousness about buying a home. It is usually between 1% and 5% of the purchase price. If your offer is accepted, the earnest money becomes part of your down payment. If you back of the deal, you could lose your deposit. |
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What is PMI? |
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PMI stands for Private Mortgae Insurance and is required by lenders for a loan where you make a down payment of less than 20% of the home purchase price. The insurance will cover a percentage of your mortgage should there be a default. Mortgage insurance is included in your monthly payment. You will need to keep the insurance until your equity in the property rises to 20% |
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How do I know which type of mortgage is best for me? |
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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. Bridgeview Mortgage Co., Inc. can help you evaluate your choices and help you make the most appropriate decision. |
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When should I apply for my mortgage? |
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We urge you to work with one of our loan officers to get pre-qualified before you start shopping. They will help you fill out a loan application and run a free credit check. From this information, we will be able to tell you how much you can qualify for. You will be in a stronger negotiating position becuase the seller knows you are a serious, qualified buyer.
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Should I check my credit history before applying for a mortgage loan? |
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Bridgeview Mortgage Co., Inc. will run a free credit report for you which will show the debts you owe and your ability to pay them plus any items of public record (including liens, bankruptcies, or foreclosures). Sometimes there are errors contained in credit reports. Bridgeview Mortgage Co., Inc. will help you to fix any discrepancies with the credit bureaus before a potential lender requests your credit history. The three main credit bureaus in the United States are Equifax, Trans Union and Experian. |
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How do I know what my loan rate will be? |
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Rates will vary with the type of loan you select, your credit history, amount of equity you have or down payment, loan amount and other loan characteristics. You can also pay points to buydown your rate. One of our loan officers will explain various options that are available to you based on your individual situation. |
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What is a rate lock? |
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You can elect to lock in your interest rate at the time of your loan application for a specified period of time. This will guarantee your interest rate regardless of any market fluctuations. |
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What is floating? |
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You have the option of floating your interest rate at the time of application. By floating, you are gambling that the market will improve so that you can take advantage of a lower rate during the time your loan is being processed. |
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What is the difference between a fixed-rate loan and an adjustable-rate loan? |
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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 discussing your situation with one of our loan officers. |
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How is an index and margin used in an ARM? |
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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. Two of the most commonly used indices are the One-Year Treasury Bill and the London InterBank Offering Rate (LIBOR). |
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What does my mortgage payment include? |
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For most homeowners, the monthly mortgage payments include the following:
- Principal: Applied to the repayment of the amount borrowed
- Interest: Paid to the lender for the amount borrower.
- Taxes & Insurance: Payments made into a special escrow account for future payments of property taxes and insurance. This is sometimes optional, in which case those payments would be made by you directly to the Tax Assessor and Insurance Agent.
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