Frequently Asked Questions:

Q:
How much house I can actually afford?
A:
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 invest in your new home. You may also be able to take advantage of special loan programs (offered by various lenders) for first time buyers. Just give us a call, and we'll be happy to look at all options available.
Q:
Which type of loan is better, a fixed-rate loan or an adjustable-rate loan?
A:
With a fixed-rate mortgage, the interest rate stays the same during the life of the loan and there are usually no prepayment penalties. With an adjustable-rate mortgage (ARM), the interest changes periodically, typically in relation to an index, margin and have various caps. There are advantages and disadvantages to all loan products and it's best to discuss your options with a professional mortgage broker.
Q:
What would be the best loan program for my particular needs?
A:
There is no simple answer to this question. Your choice depends on a number of determining factors, including your current financial situation, how long you intend to keep the property in question. Legacy Mortgage Consultants can help you evaluate your choices and help you make the best decision whether you are a first time home buyer or investor.
Q:
What would a typical mortgage payment include?
A:
Most homeowners, the monthly mortgage payments include for separate parts:
  • Principal: Repayment to the lender for the amount borrowed
  • Interest: Interest charged by the lender for the amount borrowed
  • Taxes: This payment would/could be part of a special escrow or you could pay your Taxes directly to the County Tax Assessor.
  • Insurance: Hazard insurance, like Taxes can be escrowed as well or paid directly to your insurance agent.
(Most lenders now charge a fee for no escrow of Taxes and Insurance)
Q:
How much money will I need to purchase my new home?
A:
  • Earnest Money: When you make an offer on the house you would give them Earnest Money as a token of your true interest in purchasing the property.
  • Down Payment: This would be a percentage of the cost of the home. This amount varies; most lenders would like to see 10-20% as a Down Payment.
  • Closing Costs: These charges include processing paperwork to purchase or refinance your new or existing home.