FAQs Archive

Q: What amount of debt to income is required to qualify for a loan?

We can make loans up to a debt to income ratio of 55%. This is calculated by adding together all monthly debt and dividing the total into the monthly income amount.

Q: Is there a prepayment penalty associated with a home loan?

There are no prepayment penalties for homes that are owner occupied.

Q: How much are closing costs?

Closing costs are determined by the total amount of the loan. Typically closing cost are between 4% and 10% depending on which loan product is used.

Q: How much cash will I need to purchase a home?

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

Q: How do I know which type of mortgage is best for me?

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. Associates Home Loan of Florida can help you evaluate your choices and help you make the most appropriate decision.

Q: How is an index and margin used in an ARM?

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).