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Why do middle income individuals and families find it difficult to buy a home? Answer |
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How does Civic Center Home Loans help overcome the common barriers to home ownership? Answer |
| 3. |
What is the difference between a fixed-rate loan and an adjustable-rate loan? Answer |
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How do I know how much house I can afford? Answer |
| 5. |
How do I know which type of mortgage is best for me? Answer |
| 6. |
What does my mortgage payment include? Answer |
| 7. |
How much cash will I need to purchase a home? Answer |
| 8. |
How is an index and margin used in an ARM? Answer |
| 9. |
What are "points"? Answer |
| 10. |
How does a mortgage broker get paid? Answer |
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Q
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Why do middle income individuals and families find it difficult to buy a home? |
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A
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Working idividuals and families that have a good source of income from a job or busines still face barriers to home ownership including:
- Problems with their credit reputation.
- Not enough savings for a down payment and closing costs.
- Not sure how the home buying process works.
- There is a big gap between their purchase power and the actual price of a home in their community.
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How does Civic Center Home Loans help overcome the common barriers to home ownership? |
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We start by understanding your unique situation. Everybody has differnt strengths and weaknesses when it comes to the home buying process. We design a plan that gives you the most choices at the lowest cost. We have access to home loan programs that can solve many different kinds of problems. We also work with public agencies to incorporate different kinds of subsidies and assistance that are not available from most lenders. |
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What is the difference between a fixed-rate loan and an adjustable-rate loan? |
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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. |
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How do I know how much house I can afford? |
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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. |
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How do I know which type of mortgage is best for me? |
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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. Civic Center Home Loans and Realty, Inc. can help you evaluate your choices and help you make the most appropriate decision. |
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What does my mortgage payment include? |
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For most homeowners, the monthly mortgage payments include three separate parts: Principal: Repayment on the amount borrowedInterest: Payment to the lender for the amount borrowedTaxes & 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. |
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How much cash will I need to purchase a home? |
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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 houseDown Payment: A percentage of the cost of the home that is due at settlementClosing Costs: Costs associated with processing paperwork to purchase or refinance a house |
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How is an index and margin used in an ARM? |
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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). |
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What are "points"? |
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"Points" are part of the cost of a home loan. The total cost of a loan includes the mortgage interest rate, points, are other upfront loan. You pay interest charges to a lender every month as part of your loan payment. Points are paid upfront. If a lender offers a "zero points" loan, this means you are paying a higher interest rate and your monthly payment is higher. Often you can lower your interest rate and therefore the monthly payment by paying points up-front to the lender. So, paying points can be a good idea, depeneding on your situation. |
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How does a mortgage broker get paid? |
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There are two basic ways a mortgage broker gets paid. Upfront fees paid by the home buyer when the loan closes and "rebate" fees paid by the investor who funds the loan. If a broker says that you are not being charged any upfront fees for the loan, that you are not paying any "points" this means the broker is being paid on the back-end by the investor. You should talk to your broker about this. You might be better off paying the entire broker fee upfront either from your own funds or through a seller concession. If the broker is not getting a rebate from the investor, then your interest rate and monthly payment will probably be lower.
Brokers can charge other fees for a variety of services. All fees and costs for a loan MUST be disclosed on the Good Faith Estimate provided to you immedately after you apply for a loan. All fees are negoitable. |
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