Mortgage Frequently Asked Questions

A: Generally speaking, you can purchase a home with a value of two or three times your annual 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.

A: With a fixed-rate mortgage, the interest stays the same during the life span 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 that you make on an ARM loan will likely change. There are advantages and disadvantage to each type of mortgage and the best way to select a loan product is by talking to us.

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 teh One-Year Treasury Bill, the Cost of Funds of the 11th District Federal Home Loan Bank (COFI), and the London InterBank Offering Rate (LIBOR).

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 picutre and how long you intend to keep your house. Reliant BAnkca help you evaluate your choices and help you make the most appropriate decision.

A: For most homeowners, the monthly mortgage payment 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 tazes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assesor and property insurance company.

The amount of cash that is necessary depends on a number of items. Generally speaking, 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