What should I consider when deciding whether to rent or buy a home?

This decision is based on your financial and lifestyle choices. From a lifestyle standpoint, consider whether or not you want to commit to living in a home for several years. Compare the cost of renting to the after-tax cost of owning to determine whether it makes financial sense to buy. Use our Should I Rent or Buy? calculator for a quick comparison of scenarios, including possible rent increases and price appreciation of a home. These may help your decision-making.

Is there a way to determine how much house I can afford?

You can use theAffordability calculator to get a quick estimate of how much you can spend for a house. Use your estimated down payment and monthly mortgage payment to get an idea of how much you can borrow. Results from our Monthly Payment calculator are based on your income, debts, and projected down payment..

What is the difference between a fixed-rate and adjustable-rate mortgage?

Fixed-rate mortgages feature a steady interest rate, which is determined when you are approved for a mortgage. This rate remains the same for the entire term of the loan. With adjustable-rate mortgages (ARMs), the interest rate may vary over the life of the loan. Typically, the interest rate is lower the first year, and then adjusts at predetermined intervals. This means your payments will change as well.

Do I have to wait until I’ve found a property to apply for a loan?

No! We not only support the idea, but strongly encourage it. By getting approved now, you will know exactly what you qualify for before you begin shopping. Realtors and sellers will know you are a serious buyer because your financing is already arranged. This may be an advantage when making an offer. We take into account your current income, debt and credit history in order to approve you and determine the amount for which you qualify. Once you find a property, and sign a sales agreement, we can continue processing your loan.

Why is an appraisal necessary? Can I use the tax value of the home?

Appraisals compare the current market value of your home to other homes in your area that have recently been sold. Tax values can sometimes be higher or lower and may not reflect the actual appraised value of the home. A current appraisal is necessary for the lender to justify the loan amount you've requested and is required by our secondary investors. You should not, however, rely on the appraisal for assurance about the condition of your home or as a guarantee of the value of your home.

How do I find out what my property taxes will be?

The seller and/or your Realtor should provide you with the current taxes for the property. Property taxes are reassessed from time to time, so this amount may change. If you would like to confirm what your taxes would be, you can contact the county Recording Office.

What is a Good Faith Estimate?

Required by federal law, the Good Faith Estimate (GFE) is a written list of the estimated closing costs associated with your mortgage transaction, including the lender's charges along with the local closing agent's charges and fees. It also includes estimated amounts for real estate property taxes and homeowner's insurance. Once you've been approved, you can access your GFE online from your "My Loan Status" page.

What is a Truth-in-Lending statement?

Required by federal Law, the Truth-in-Lending statement provides detailed information about the total charges that you will incur over the life of the loan. It includes the Annual Percentage Rate (APR), the amount of interest you'll pay, the amount financed and schedule of payments, the total of your payments, and late payment charges.

How do interest only loans work?

A customer pays interest only payments for the first three, five, seven, or ten years of the loan. During the Interest Only period, the loan will be re-amortized at the remaining principal balance each month, allowing the customer to benefit from any principal curtailments made during the interest only timeframe.

After the fixed interest only period, the loan payments become fully amortized payments of both Principal and Interest for the remaining term. During this time, the interest rate adjusts every year, based on the one-year LIBOR index plus a margin.

Do I need to sell my existing home before I apply for a new mortgage loan?

Absolutely not! You can apply for a new mortgage loan before you sell your current home. However, depending on your income and debt levels, you may need to sell your current home before you can close on your new home.

How are my property tax bills paid?

It depends on your loan program and state requirements. Generally, if your monthly mortgage payment includes money for property taxes, these funds are held in escrow by the lender and the lender pays your property taxes as they become due. Generally, if your payment does not include property taxes, you are responsible for paying them by the due date mandated by your state.

What type of inspections do I need before I close on my home?

Certain inspections may be required under your particular loan program. However, depending on the home and the location, there are a variety of inspections you may want to consider before you close on your new home even if they are not required under your program, such as:

• Home Inspections
• Termite Inspection
• Water Test (for well water)
• Septic Tank Inspection
• Radon Test