Frequently Asked Questions
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.
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. Northwest Mortgage Inc. can help you evaluate your choices and help you make the most appropriate decision.
For most homeowners, the monthly mortgage payments include three separate parts. (1) Repayment on the amount borrowed. (2) Payment to the lender for the amount borrowed. (3) 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.
The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply. (1) Earnest Money; The deposit that is supplied when you make an offer on the house. (2) Down Payment; A percentage of the cost of the home that is due at settlement. (3) Closing Costs; Costs associated with processing paperwork to purchase or refinance a house.
Lenders review your credit as a means to paint a picture on how well you have handled your past finances and use this information to predict your future financial risk. Having a higher credit score means less risk for lenders, which can mean lower down payment requirements for your loan.
While every loan is different, refinancing is quicker than a new purchase as you are already established in your home. Some factors can affect the timeline, such as types of documentation required and the terms of your loan.