How is my interest rate determined?Interest rates are based on a number of factors including, but not limited to, type of financing and buyer credit history. You should carefully discuss your interest rate options and your interest rate lock options with your home mortgage consultant. What are points?Points or loan discount points are prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g., two points on a $100,000 mortgage would cost $2,000). You may choose to pay points at closing in order to lower your long term interest rate depending on the type of financing selected. How much money do I need for my down payment and closing costs?The amount of money required for your down payment and closing costs will vary depending on the type of loan program selected. Some loan programs allow you to finance 100% of a purchase price and others require a 3% or higher down payment. Your closings costs will be based on your purchase price, down payment amount and a combination of fees such as escrow fees, appraisal fees, mortgage insurance, prepaid taxes, title insurance, etc. When do I find out the exact amount I need for closing costs?Your home mortgage consultant will provide you with a good faith estimate upon selection of your loan program. Approximately one week prior to your anticipated close of escrow your escrow representative will be able to provide you with an exact amount needed for closing costs. Do I have to include taxes and insurance in my payment?Whether you have to include taxes and insurance in your payment will depend largely on the amount of your down payment. Typically, a down payment of less than 20% of the purchase price will require taxes and insurance to be included in your payment. What are supplemental taxes?Property is assessed by the County Assessor upon the close of escrow and a supplemental tax bill is issued. The supplemental tax bill reflects property taxes on the increased value of the property from its most recent assessed value to its assessed value at the close of escrow. For example, if a property was last assessed at $50,000 (e.g. land only) and is reassessed after the close of escrow at $150,000 (e.g., land plus home), and the area tax base is 1.25%, the supplemental tax bill would be approximately $1250 or 1.25% of $100,000 (the increase in assessed value). Why do I have to pay for an appraisal?An appraisal is an estimate of the value of the property, made by an independent, qualified professional called an “appraiser.� An appraisal is required by your mortgage lender to determine how much money it will lend you. How long is my approval valid?Your loan approval is valid for 180 days from the date of your application. If your home is not completed within the 180 days, your home mortgage consultant will request updated documentation such as bank statements and pay stubs in order to extend your approval. |
