Whether you are applying for a first-time home mortgage or business loan or are evaluating
the benefits of refinancing your existing mortgage or loan, many questions can arise
throughout the process that must be answered before making the best decision for your
mortgage situation. Genesis Mortgage Services is a loan company and a home mortgage lender
that is always available to clear up any confusion about mortgages and smooth any pitfalls
along the "loan process" way. As a convenient reference, some of the more
frequently asked mortgage questions have been listed. Of course, you are always welcome to
call one of our helpful loan professionals with your own questions about home mortgages.
Q: How much of a house or home can I afford?
A: The general mortgage guideline is to attempt to limit your home purchase to a
figure that is two or three times your annual household income. However, many other
factors besides income affect the loan amount that you can borrow -- employment history,
credit rating, current savings, debts, and the amount of your down payment: these all
combine to establish your borrowing mortgage amount. You may also be able to take
advantage of special loan programs for first time homebuyers and mortgages. Genesis
Mortgage Services will be happy to help you calculate how much of a house or home you can
afford even before you go home shopping.
Q: What is the difference between a fixed-rate loan and an adjustable-rate loan
(ARM)?
A: The terms fixed-rate mortgages and adjustable-rate mortgages refer to the
mortgage interest rate on a loan. A fixed-rate mortgage maintains the same loan interest
rate during the term of the mortgage or loan. An adjustable-rate mortgage (ARM) loan has
an interest rate, that can be raised or lowered over time, based on periodic changes in a
monitored index. While the monthly mortgage payments that you make with a fixed-rate
mortgage are comparatively constant, payments on an ARM loan are likely to vary. There are
advantages and disadvantages to each type of mortgage based on your unique buying
circumstances.
Q: When are ARMs the right choice?
A: An ARM may be the right choice for you, if your income will increase steadily
in the years ahead. Another mortgage scenario is if you anticipate a move in the near
future and therefore, would be minimally impacted by potential future increases in
mortgage interest rates.
Q: How can I choose which type of home mortgage or house loan is best for me?
A: There is no specific methodology to help you determine the best type of
mortgage for you; but that is why Genesis Mortgage Services is here to help. The
appropriate mortgage selection depends on a number of factors, and sometimes confusing
ones. It is our job to help you understand and evaluate mortgages so that your choices
will lead to the best mortgage decision for you and your family. This guidance is just a
small part of our continuing consideration to our customers' mortgages and loan service.
Q: What are the advantages of a 15-year versus a 30-year loan term?
A: With a 30-year loan, often the mortgage payment is smaller and more affordable
for many people than a 15-year loan. However, more mortgage interest is paid than mortgage
principal, meaning larger tax deductions, but more money is spent over the life of the
loan than in 15-year mortgages. A 15-year loan is usually made at a lower mortgage
interest rate. Equity is built faster because early mortgage payments pay more mortgage
principal.
Q: What is a conforming loan?
A: A conforming loan is one that has underwriting criteria consistent with, or
conforming to, the strict guidelines of Fannie Mae mortgages and Freddie Mac mortgages,
the two major Federal agencies that buy mortgages. These are typically the lowest mortgage
interest rate loans with very good terms for most mortgages. The loan limits are currently
$300,700 for a single-family house.
Q: What is a jumbo mortgage?
A: A jumbo loan is one that is larger than the maximum allowed by conforming
mortgage loans. The threshold home mortgage amount has traditionally been adjusted more or
less on an annual basis and has been in the low $200,000's for mortgages. Jumbo loans are
typically available at mortgage interest rates slightly higher than those of conforming
home loans and house mortgages. Call Genesis Mortgage Services for the current limit that
qualifies for a jumbo loan.
Q: How much money do I need to put down for my new house?
A: Some of today's mortgage options require a down payment of only five percent
of the home purchase price. But remember, the larger the down payment, the less mortgage
money you have to borrow, and the more home equity you will have. Home mortgages with less
than a 20% down payment usually require home mortgage insurance. When calculating the size
of your down payment, take into account that you will also need money for closing costs,
moving expenses, and all of the other costs associated with a move.
Q: What is included in my monthly mortgage payment?
A: Your monthly mortgage payment is mostly applied to the mortgage principal and
the mortgage interest. But most lenders also include real estate taxes, homeowner's
insurance, and mortgage insurance, when relevant for home mortgages.
Q: How does the current interest rate affect my mortgage application?
A: A lower mortgage interest rate allows you to borrow more mortgage money than a
high rate and still maintain the same monthly mortgage payment. Mortgage interest rates
can fluctuate as you shop for your home and for a home mortgage loan. Therefore, check
with Genesis Mortgage Services about "locking in" your mortgage interest rate,
guaranteeing a set mortgage interest rate for a particular time period. This tactic may
allow you to dodge escalating mortgage rates and buy more of a house.
Q: When is it time to refinance?
A: Usually, people refinance because of the potential to save money. Whether you
are acquiring a lower mortgage interest rate or reducing the term of your loan,
refinancing is often worth the process. Refinancing is also a way to convert an adjustable
mortgage loan to a fixed house loan or to consolidate debt. The decision to refinance
mortgages can be difficult, since there are several reasons to refinance. Since it is a
complex topic, consult a Genesis Mortgage Services loan and mortgage expert.
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