1. What are the advantages of home ownership vs. renting? Answer
2. What effect does my credit rating have on my loan rate? Answer
3.  How much cash do I need for a down payment and closing costs? Answer
4.  Is it time to refinance my home? Answer
5. What will my monthly payment be on my home and what exactly is included? Answer
6. What documentation will the mortgage lender need from me and when? Answer
7.  What are the points on a mortgage and how do they affect my rates? Answer
8.  What is my APR on my mortgage? Answer
9.  Adjustable vs Fixed Rate Mortgage? Answer
10. What information do I need to apply for a mortage? Answer
11. Who do I contact if I have questions? Answer

Q : What are the advantages of home ownership vs. renting?
A :

While renting may be a good short-term option, the long-term benefits of owning a home may far outweigh the advantages of renting. As a renter, your monthly payments are not an investment. But, as a homeowner, money that is spent on monthly payments adds up to a substantial investment and equity that you may be able to  draw from as needed



Advantages to Buying:

  • Property builds equity in a rising economy
  • May be eligible for deductions on your tax return
  • Not dependent on landlord to maintian property
  • Sense of community, stability and security
  • You are free to change decor and landscaping, come and go as you please

Disadvantages to buying:

  • Responsible for taxes, insurance and maintenance
  • Less mobility than renting
  • May lose equity in a falling economy

 Advantages to Renting:

  • Little or no responsibility for taxes and maintenance
  • More mobility
  • Lower risk in a falling economy 

 Disadvantages to Renting:

  • No tax benefits
  • No equity is built up
  • No control over rent increases
  • No Homestead Exemption
Q : What effect does my credit rating have on my loan rate?
A : When youre applying for creditwhether its a mortgage, a car loan, a credit card or a personal loanlenders will want to know your credit risk level. To understand your risk, most lenders will look at your credit score. Your credit score influences the credit thats available to you, and the terms (interest rate, etc) the lenders offer you. A better score means better financial options for you. The three major consumer credit bureaus are Equifax, Experian and Trans Union. Take the time to correct any inaccuracies on your reports by checking them online under www.annualcreditreport.com
Q :  How much cash do I need for a down payment and closing costs?
A : Lenders generally require from 5 - 20% of a homes value as down payment, though 100% financing is available from some lenders (usually in exchange for a higher interest rate). Youll also typically need cash to cover closing costs, which are all the fees you pay when your loan becomes final. Closing costs can add up, often between 2 - 6% of your loan amount, so make sure you receive agood faith estimatein writing from your lender and review your closing statement prior to closing.

Q :  Is it time to refinance my home?
A : Historically low interest rates sparked a refinance boom that hit its peak in the summer of 2012 — and rates are still going strong, despite analysts’ predictions. When interest rates drop, homeowners often question whether they should jump on the “refi” bandwagon.

For the most part, deciding whether to refinance your home comes down to whether your savings from reduced mortgage payments will be greater than the closing costs of the loan. And while this principle is an important place to start, other factors can influence whether you should refinance. You should consider refinancing if you can:

  • Lower the total cost of your loan by reducing the term of your loan – When you switch from a 30-year to a 15-year loan, you may see a slight increase in your monthly payments; however, you’ll save thousands of dollars in total interest payments over the life of your loan.
  • Switch from an adjustable rate to a fixed rate loan – When interest rates are low, securing a fixed rate mortgage will give you set monthly payments that won’t increase for the entire term of the loan. This is especially beneficial if you plan to be in your home for a long period of time
  • Avoid paying private mortgage insurance – If you are close to having 20 percent equity in your home, you can refinance and eliminate paying private mortgage insurance. This will also reduce your monthly payment
  • Convert your jumbo mortgage to a conventional mortgage – If you are paying the high fees of a jumbo mortgage and your loan balance is now in the conventional mortgage range, you may be the perfect candidate for refinancing.
  • Free up cash in your home – Refinancing can be an excellent way to pay off debt. When you combine higher interest bills with your mortgage, you will likely benefit from lower interest rates, tax-deductible interest payments, and an improved credit rating.
  • Check on HARP or HAMP Options-Under the Home Affordable Refinance Program or Home Affordable Modification Program, you may have options if you’re “under water” on your mortgage, meaning the outstanding balance is more than the present value of your home.


You can also use the money you receive from refinancing to pay for renovations and remodeling projects that can add value to your home.


Q : What will my monthly payment be on my home and what exactly is included?
A : Your monthly payment figure will likely include principal, interest, taxes and homeowner's insurance, plus mortgage insurance if required. Remember to add condo or homeowners association dues and/or flood insurance,  if applicable.
Q : What documentation will the mortgage lender need from me and when?
A : For starters, youll probably need to submit proof of income such as tax forms for the last two years; recent pay stubs; a list of employers; a list of account numbers and current balances owed to creditors; and current statements from your checking, savings and investment accounts.
Q :  What are the points on a mortgage and how do they affect my rates?
A : Points are additional, upfront fees that may be charged by the lender. One point equals one percent of your total loan amount. Generally speaking, theres an inverse relationship between points and interest rates: the more points you pay upfront, the lower your interest rate, and the fewer points you pay, the higher the interest rate. You may also be able to lower your interest costs by paying more points upfront
Q :  What is my APR on my mortgage?
A : The Annual Percentage Rate (APR) includes your interest rate, mortgage insurance, interim interest, points and certain other fees, and thus is usually higher than the base interest rate. Looking at the APR is the best way to compare loan offers on anapples-to-applesbasis
Q :  Adjustable vs Fixed Rate Mortgage?
A : While your lender can advise you on which mortgage might work best, its important for you to be comfortable with the final decision. In order to make the best choice, weve highlighted some pros and cons of both fixed and adjustable rate mortgages.

A Fixed Rate Mortgage (FRM) is a mortgage that has the same interest rate for the term of the loan. Some benefits include:

  • Future monthly payments that are easy to project
  • Stability for long-term homeownership.
  • Fluctuating interest rates do not affect your payment. 

An Adjustable Rate Mortgage (ARM) is a loan that has an interest rate that may be adjusted periodically in response to changes in the Treasury bill rate or the London Inter Bank Offering Rate (LIBOR). The interest rate is fixed for a certain period of time (the adjustment period) and then varies depending on market rates. The benefits include:

  • Lower initial payments
  • Ideal for short-term ownership
  • Fixed rate during the adjustment period
  • If interest rates fall, your mortgage interest rate falls also
  • May allow you to qualify for a larger loan

Some questions to ask yourself as you consider your options:

  • How long do I plan on staying in this house?
  • When is the first adjustment? How much can it adjust?
  • Is there a cap on a rate increase?
  • Do I plan to move before the loan has its first adjustment?
  • Is there a prepayment penalty?
  • If interest rates go down, will my ARM go down accordingly?
  • Do I prefer the peace of mind that typically comes with a fixed rate mortgage?
Q : What information do I need to apply for a mortage?
A : Typically you will need to collect your most recent paystub and W-2 form for income verification and your most recent bank statement for asset verification of your down payment and closing costs. If you are self employed lender's will typically required the most recent two years of tax returns. You will also need to provide personal information such as date-of-birth and social security numbers for all borrowers on the applicaiton. Your loan officer will then be able to evaluate your situation and give you a detailed listing of any additional information that may be required.
Q : Who do I contact if I have questions?
A :  You should contact your load officer.  If you do not know your loan officer's name you may call 1-800-446-6997 and we will be happy to look up their contact information for you.