FREQUENTLY ASKED QUESTIONS

This content is for informational purposes and does not constitute legal or financial advice.

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.

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.

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).

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. MCR Financial Services can help you evaluate your choices and help you make the most appropriate decision.

For most homeowners, the monthly mortgage payments include three separate parts:

  • Principal: Repayment on the amount borrowed
  • Interest: Payment to the lender for the amount borrowed
  • Taxes & Insurance: Monthly payments are normally made into a special escrow account for items like hazard insurance and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company.

The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply:

  • Earnest Money: The deposit that is supplied when you make an offer on the house
  • Down Payment: A percentage of the cost of the home that is due at settlement
  • Closing Costs: Costs associated with processing paperwork to purchase or refinance a house

Customers can either look at local property listing sites online, in the local newspaper or hire a real estate agent to search for homes. Real estate associations are also helpful resources when looking for homes in more distant areas.

M.C.R. Financial Services real estate professionals will be able to assist customers in finding a home which allows our customers to experience a more successful and streamlined home buying process.

While a pre-qualification is an informal confirmation from a mortgage lender that says you can afford your mortgage using unconfirmed financial information, a pre-approval is a written agreement in which a lender determines the maximum loan amount homeowners can receive. Pre-qualification is one of the first steps of the home buying process; a pre-approval will occur once you have found a home to purchase and submit a full loan application.

Feel free to use our mortgage loan calculators to determine your affordability and suggested payment contribution!

Homebuilders and sellers will find mortgage offers more appealing if a homebuyer is pre-approved because it tells them the buyer will be able to make their payments after the sale. Pre-approval also allows homebuyers to have faster closings; benefiting all parties in the long run. For first time homebuyers especially, pre-approval can make it easier to negotiate the listing price of a home.

Before purchasing a home, buyers should research how long the property has been for sale to negotiate an appropriate price. If a home has been on the market for quite some time, a buyer may be able to negotiate the price. It is helpful to invest in a home inspection before placing an offer to prevent overspending and decide if other options should be considered.

Real estate agents help sellers and homebuyers reach a compromise on housing prices during the home buying process. Offering too little could cause a home to be sold to a higher bidder, and offering too much could leave less money for other home expenses.

M.C.R. Financial Services real estate professionals are here to help buyers make the best purchasing decision at the most affordable price. Talk to one of our mortgage professionals today if you would like a recommendation.