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 You Are Here : HOME \ New Construction \ Financing Friday, November 21, 2008  

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  Financing
  Mortgage Tips
 
  • Be a wise Consumer!
  • There are many kinds of mortgages available. Make sure you understand your options so you can pick the best mortgage for you.
  • Shop around. Compare what lenders have to offer.
  • Check your local newspapers for current mortgage rates-you’ll find that they vary from lender to lender.
  • Explore the Federal mortgage insurance programs described in this section-you may find one that can help you become a homeowner!
  • Contact one of our Mortgage Representatives if you are confused about your options or have any questions about pre-qualification. They’ll be able to help you sort out your choices.
  • There may be special home buying programs that you may qualify for, particularly if you are a first-time homebuyer.
How much Mortgage can you Afford?
 
  • You can save yourself a lot of wheel-spinning if you take a minute to figure out how much mortgage you can afford.
  • Generally, a lender will want your monthly mortgage payment to total no more than 29% of your monthly gross income (that’s your monthly income before taxes and other paycheck deductions are taken out.)
  • You also need to consider current loan interest rates. The lower the interest rate, the more expensive the home you’ll be able to afford.
  • Follow these tips and use our mortgage calculators at www.fncb.com to help you see how much you can afford in a mortgage payment
  • You can also call our Mortgage Link and Loan-by-Phone to pre-qualify for a Home Mortgage.
 What you need to Pre-Qualify for a Home Mortgage:
 
To make your Loan Application or to pre-qualify for a Home-Mortgage as easy as possible, you should have the following information ready: (Round to the nearest dollar)
  1. Social Security Number(s)
  2. Zip Code
  3. Numeric Portion of Street Address
  4. Date of Birth
  5. Annual Household Income before Taxes
  6. Mortgage/Rent Amount
  7. Monthly Credit Card Payment
  8. Other Monthly Loan Payments
  9. Years at Current Address
  10. Years at Current Job
  11. Mortgage Down Payment (If Applicable)
  12. Funds Available for Closing (If Applicable)
  13. Daytime Phone Number
 Buy instead of Rent? WHY?
 

You’ll enjoy the feeling of having something that’s all your-a home that reflects your own personal style. A thriving vegetable garden in the backyard, hardwood floors, a master bath with a whirlpool tub. But there’s more to owning a home than personal satisfaction. You can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes, too. And interest will compose nearly all of your monthly payment, for over half the number of years you’ll be paying your mortgage. This adds up to hefty savings at the end of each year. And you’re also allowed to deduct the property taxes you pay as a homeowner. If you rent, you write your monthly check and its gone forever. Another financial plus in owning a home is the possibility its value will go up through the years.
 
How much will I have to come up with to Purchase a Home?
 
That depends on a number of factors, including the cost of the house and the type of mortgage you get. You need to come up with enough money to cover three costs: earnest money-the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house; the down payment, a percentage of the cost of the home that you must pay when you go to settlement; and closing costs, the costs associated with processing the paperwork to buy a house.

When you make the offer on a built home our attorney will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If the offer is not accepted, your money will be returned to you. (For new construction, earnest money will only be required if you are purchasing land with the home package)

The more money you can put into your down-payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the purchase price.

Closing Costs-which you pay at settlement- average 3-4% of the price of your home. These costs cover various fees your lender charges and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won’t be caught by surprise.

 
In Addition to Mortgage Payments, What other Costs do I need to Consider?
 
First you’ll have your monthly utilities. If your utilities have been covered in your rent, this may be new information for you. We will be able to provide you at the closing , the cost of the utilities for the area you built or bought a home in. You will also have property taxes, and you also may have city or county taxes. Taxes normally are rolled into your mortgage payment. Again, we can help you estimate these costs.
 

What will my Mortgage Cover?
 
Most Loans come in four(4) parts:
 
Principal: the repayment of the amount you actually borrowed.

Interest: payment to the lender for the money you’ve borrowed.

Homeowners Insurance: a monthly amount to insure the property against loss from fire, smke, theft, and other hazards required by most lenders.

Property Taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year. Most loans are for 30 years, although 15 year loans are available, too. During the life of the loan, you’ll pay far more in interest than you will in principal-sometimes two or three times more! Because of the way loans are structured, in the first years you’ll be paying mostly interest in your monthly payments. In the final years, you’ll be paying mostly principal.
 
How do I know which Mortgage is Best for Me?
 
There are two types of mortgages and the more you know about them, the better. Most people use a fixed-rate mortgage. In a fixed rate mortgage, your interest rate stays the same for the term of the mortgage, which is normally 30 years. The advantage of a fixed-rate mortgage is that you always know exactly how much your mortgage payment will be, and you can plan for it.

The other kind of mortgage is an Adjustable Rate Mortgage (ARM). With this kind of mortgage, your interest rate and monthly payments usually start lower than a fixed rate mortgage. But your rate and payment can change either up or down, as often as once or twice a year. The adjustment is tied to a financial index, such as the U.S Treasury Securities index. The advantage to an ARM is that you may be able to afford a more expensive home because your initial interest rate will be lower.
 
If you should need any more information or would like a brochure on Mortgage Link and Pre-Qualification, please call 570-344-3205 and ask for Meredith. Or e-mail me at build@ceconconstruction.com.
 
 
 
 
 

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