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I really
want to own my own home, but I'm not sure I can afford it. Where
do I start?
Lots of people don't even consider buying a home
because they're afraid they can't afford it. But for most people,
home ownership is within reach - especially with some of the special
programs for first-time home buyers. In fact, for many, home ownership
is as affordable as renting - in some cases even more affordable.
The best place to start is with a call to our office
at 205-989-1166. We can help you explore all the options of home ownership.
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How do I know how much house
I can afford?
Before you start looking at homes, you need to have some
idea of what you can afford. Mortgage technology has eliminated many of
yesterdays "rules of thumb" for qualifying. Customers are finding they
actually qualify for much more than they ever dreamed possible.
If you'd like to know exactly how much you can afford,
talk to us at 205-989-1166. If you're working with a RealtorŪ, he
or she can help you with this, too.
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When should I talk to a
mortgage lender?
The short answer: when you start thinking about buying
a home. We can guide you in many of the selections you will be making to save time
and money in the process. This first step is to pre-qualify.
Mortgage Professionals, Inc. will be happy to help
you as you look for a home. Mortgage Professionals will work with you to determine
how much house you can afford, help steer you to special mortgages
for first time home buyers, and perhaps make suggestions that could
make it easier to get the best mortgage for you.
Another advantage: you'll already have a strong relationship
established with us when you finalize your purchase contract.
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Aren't there really just
two kinds of mortgages: fixed and adjustable rate?
You could say that, because all mortgages fall into
one of these two categories -- that is, the interest rate you pay
is either the same (fixed) for the life of the mortgage, or it can
change (adjust) over the life of the mortgage.
Fixed-Rate Mortgages
With this type of mortgage your monthly payments
for interest and principal never change. Property taxes and homeowners
insurance may increase, but generally your monthly payments will
be very stable.
Fixed-rate mortgages are available for 30 years, 25 years,
20 years, 15 years and even 10 years. We can also show you specifically how
much extra to pay in order to payoff your loan early.
Adjustable-Rate Mortgages (ARMS)
These loans generally begin with an interest rate
that is 2-3 percent below a comparable fixed rate mortgage, and
could allow you to buy a more expensive home.
However, the interest rate changes at specified intervals
( for example, every year) depending on changing market conditions;
if interest rates go up, your monthly mortgage payment will go up,
too. However, if rates go down, your mortgage payment will drop
also.
There are also mortgages that combine aspects of
fixed and adjustable rate mortgages - starting at a low fixed-rate
for seven to ten years, for example, then adjusting to market conditions.
Ask Mortgage Professionals about these and other special kinds of
mortgages that fit your specific financial situation.
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How do I know which type
of mortgage is best for me?
There isn't a single, simple answer to this question.
The right type of mortgage for you depends on many different factors:
Your current financial picture;
How you expect your finances to change;
How long you intend to keep your house;
And how comfortable you are with your mortgage
payment changing from time to time.
For example, a 15-year fixed-rate mortgage can save
you many thousands of dollars in interest payments over the life
of the loan, but your monthly payments will be higher. And an adjustable
rate mortgage may get you started with a lower monthly payment than
a fixed-rate mortgage -- but your payments could get higher when
the interest rate changes.
The best way to find the "right" answer
is to discuss your finances, your plans and financial prospects,
and your preferences frankly with Mortgage Professionals.
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Do they really need to know
everything about me for the application?
It may seem that way -- but actually all your mortgage
lender needs to know about you is your employment and finances,
and information about the home your buying.
However, you will need to provide quite a few details
about these topics, and your application process will go much more
smoothly if you're prepared. Be sure to ask Mortgage Professionals
what information you'll need to complete your application.
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How much will my credit
history affect my ability to get a mortgage?
Many home buyers are very worried about this issue.
We've even heard one story that an applicant was denied a mortgage
because he had returned a rented videotape late!
Of course, that could never happen. And most people
don't need to worry about the effects of their credit history. However,
you can be better prepared if you get a copy of your credit report
to review before you apply for your mortgage. That way, if there
are any errors you can take steps to correct them before you make
your application.
If you have had credit problems, be prepared to discuss
them honestly with us. Responsible mortgage lenders know there can be
legitimate reasons for credit problems, such as unemployment, illness
or other financial difficulties. If you had a problem that's been corrected,
and your payments have been on time for a year or more, your credit will
probably be considered satisfactory.
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How much will I need for
the down payment?
It's probably less than you think. Many first-time buyers
are surprised to learn that they can purchase with no money down. Generally,
though, your down payment can be anywhere from three to twenty percent
of the sale price.
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What does my mortgage payment
include?
For most homeowners, the monthly mortgage payments
include three separate parts: a payment on the principal of the
loan (that is, the amount borrowed); a payment on the interest;
and payments into a special account (called an escrow account) that
your lender maintains to pay for things like hazard insurance and
property taxes. These elements are called P.I.T.I. (Principal-Interest-Taxes-Insurance).
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What happens after I've
applied - and how long will it take?
With Mortgage Professionals state of the art technology,
many loans are approved at application. The entire process from application to
closing typically takes between 2-4 weeks depending on your specific needs.
Within three business days after your application,
Mortgage Professionals will give you an estimate of your closing costs. (The
closing is the actual settlement of your loan.) You'll also get
a statement that shows your estimated monthly payment, the cost
of your finance charges, and other facts about your mortgage.
The process can be one of the most intimidating aspects of
buying a home. We at Mortgage Professionals take pride in eliminating any
stress associated with financing so that buying a home, truly can be a dream
come true.
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