Q: How do I decide how much I can afford?
A: What you can afford depends on your income, credit rating, current monthly expenses, down payment and the interest rate. For further assistance, contact one of our loan officers to help you find and determine what is best for you.

Q: What is a Loan Application?
A: In the process of applying for a loan your lender will require certain information from you in order to determine whether or not you are eligible for a loan. The loan application provides the lender this information in order to make their decision.

Q: What documentation do I need when I apply for a loan?
A: It is important to know that every program will vary in what documentation is required. Generally, you should be prepared to bring the following:

• Federal income tax statements (self-employed borrower's)
• Two most recent W2s
• Two most recent paycheck stubs
• Two most recent bank statements
• Asset and liability information

Q: What does a mortgage payment consist of?
A: A mortgage payment consists of the Principal, Interest, Taxes, and Insurance (PITI). You may also be required to pay MI (Mortgage Insurance) on a monthly basis.

       Principal - The amount of the payment that is applied to the loan balance.
       Interest - The charge paid for borrowing money.
       Taxes - Property taxes.
       Insurance - This is insurance that protects your home (required by the lenders).

The MI is mandatory for homeowners who purchase a home with a down payment that is less than 20% of the home's cost. This is a second insurance that protects the lender in the event you are unable to repay the loan.

Q: How much cash do I need for a down payment?
A: The down payment is the money that you contribute up-front toward the purchase of your home. You will indicate on your loan application how much money you plan on "putting down." The difference between your down payment and the price of the home determines the amount of the loan you need. The amount of down payment is determined by your credit and loan program. There are still no money down programs for certain property types (USDA Program) and special workers.

Q: What is a Fixed Rate Mortgage?
A: Fixed-rate mortgages are the most common mortgage for many homebuyers because the monthly payments are stable. This means that the interest rate will never change during the life of the loan. The interest rate you lock-in will be the same interest rate you pay for the life of the loan - whether it's a 15-year or 30-year mortgage.

Q: What is a FHA loan?
A: FHA (Federal Housing Administration) loans are designed to make housing more affordable for first-time homebuyers and those with low to moderate income. You do not need to be a first time home buyer to qualify.

Both fixed- and adjustable-rate FHA loans are available, and in most states, an FHA loan can be used for refinancing. Both are insured by the U.S. Department of Housing and Urban Development (HUD). With FHA Insurance, eligible buyers can put down as little as 3.5% of the FHA appraisal value or the purchase price of the home, whichever is lower.