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Why should I use a mortgage broker to secure my loan? |
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A mortgage broker acts as your personal shopper to help you determine the best loan program available that meets your specific situation. While a bank or direct lender has a limited selection of loan products, Flagship Mortgage Company offers numerous programs from multiple wholesale lenders, local as well as nationwide. |
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Is it more expensive to use a brokerage firm than to get my loan from a direct lender? |
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No, it does not cost more to use a brokerage firm. In fact, you may save money by securing the best loan option and interest rate available for your specific situation. Banks and other direct lenders only offer their loan programs and rarely, if ever, recommend a loan product from another source, even if that source offers a better price or product for your situation. |
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How do I know how much house I can afford? |
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The amount that you can borrow will depend upon your current income, employment history, credit history, liquid assets 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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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 talking to us. |
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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, when a rate is scheduled to adjust, the interest rate that you pay is obtained by adding the index (which varies) and a pre-specified margin (which is fixed for the life of the loan). 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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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 the loan and your house. Flagship Mortgage Company will help you evaluate your choices and help you make the most appropriate decision. |
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What does my mortgage payment include? |
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For many homeowners, the monthly mortgage payments include three separate parts:
Principal: Repayment on the amount borrowed (may be postponed on interest only loans)
Interest: Payment to the lender for the amount borrowed
Impounds (AKA: Escrow for Taxes & Insurance): This feature is frequently optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company. If these fees are included with the mortgage payment, an amount equal to 1/12 of the annual fees is included in each monthly payment and put into a special escrow account for items like hazard insurance and property taxes. |
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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 to supply:
Earnest Money: The deposit that is supplied when you make an offer to the seller to purchase. Your real estate agent or seller can advise you what is required.
Down Payment: A percentage of the price of the home that is due at settlement; Sales Price minus Loan Amount = Down Payment.
Closing Costs: Costs associated with processing paperwork to purchase or refinance a house including loan, title, recording and escrow expenses. Some sellers will offer to pay all or part of your closing costs to make purchasing more affordable. |
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