Home    Loan Center    Products    About Us    FAQ    Resources  
  My Account Login  
  Get Started  
  Contact Us  
FAQ
1. How do I know how much house I can afford? Answer
2. What is the difference between a fixed-rate loan and an adjustable-rate loan? Answer
3. How is an index and margin used in an ARM? Answer
4. How do I know which type of mortgage is best for me? Answer
5. What does my mortgage payment include? Answer
6. How much cash will I need to purchase a home? Answer

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.
 
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.
 
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).
 
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. Mountain Mortgage LLC can help you evaluate your choices and help you make the most appropriate decision.
 
Q : What does my mortgage payment include?
A : For most homeowners, the monthly mortgage payments include three separate parts: 1.Principal: Repayment on the amount borrowed. 2.Interest: Payment to the lender for the amount borrowed and based on interest rate. 3.Taxes & Insurance: Monthly payments that are 1/12 of annual tax and insurance. These are held in an escrow account and paid when due; usually annually for insurance and semi-annually for taxes. 4.Mortgage Insurance: Amount paid to lender for loans greater than 80% Loan to Value. There are options to pay this at close to reduce your monthly payment.
 
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 pay: 1.Earnest Money on a purchase: The deposit that is paid when you make an offer on the house. 2.Pre-Paid Costs: These include insurance, taxes, interest and sometimes HOA fees. 3.Closing Costs: Costs associated with the loan such as title, appraisal, underwriting and recording fees. 4.Cash to close: Purchase price less earnest money, prepaid-costs, closing costs and loan.
 
  My Account Login  
  Get Started  
  Contact Us