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Q
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Is it safe to purchase a home now? |
| A : |
Our
area of Texas has not been hit by the decline in real estate
values like other areas of the country. We still see strong
sales and home appreciation throughout the Golden Triangle in
homes averaged priced homes of up to $300,000. With the
incentives of home purchase that are allowable by the IRS, an
individual should consider purchasing. Ultimately, deciding to
purchase versus rent is a personal decision, but the indicators
are positive. |
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Q
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Is it a buyers or sellers market? |
| A : |
These terms describe if it is more favorable for the buyer or
seller in the transaction…a sellers market means that prices are
stable and good for the sellers. A buyers market typically means
properties are not selling and buyers can get a better purchase
price. Our current market is one most agents consider “stable.”
This means there is a balance of sellers versus buyers and it is
favorable for both parties. |
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Q
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How is an index and margin used in an ARM? |
| A : |
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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Q
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How do I know which type of mortgage is
best for me? |
| A : |
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. Superior Mortgage and Equity
Corp. can help you evaluate your choices and help you make the
most appropriate decision. |
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Q
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How do I know how much house I can afford? |
| A : |
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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Q
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Can the seller pay my closing costs? |
| A : |
Different types of mortgages allow the seller to pay various
amounts of the closing costs for the buyer. Typically
conventional loans with a 5% down payment allow the seller to
pay 3% of the purchase price towards the buyers closing costs.
In most cases if the buyers needs closing cost assistance we use
an FHA mortgage since they allow the seller to pay 6% of the
purchase price towards the buyers closing costs.
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Q
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What is the difference between a
fixed-rate loan and an adjustable-rate loan? |
| A : |
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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Q
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How do I know which type of mortgage is
best for me? |
| A : |
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. Our mortgage professionals will
work with you to determine whether a Conventional, VA, or FHA
mortgage is best. Then we will discuss the differences with
fixed versus a variable rate and help you select the correct
repayment term. |
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Q
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What does my mortgage payment include? |
| A : |
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. In
addition if your loan has private mortgage insurance this
amount will be added to your monthly mortgage payment.
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Q
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How much cash will I need to purchase a
home? |
| A : |
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
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