Get answers to your home-buying questions.

---

Get answers to your refinancing questions.

---

 

Below are the answers to your home-buying questions.

1. How much cash will I need for closing costs?
[return to top]
Closing costs can vary on a purchase transaction based on how you negotiate your purchase contract. It is best to talk to a mortgage specialist before entering into contract to ensure you have enough money to close escrow. Generally costs range from 2% to 5% of your loan amount. Closing costs can be divided into three main categories:

As a fully compliant mortgage company, you will get your Pro City TrueQUOTE regarding all of the terms of your loan up front.

2. How much home can I afford?
[return to top]
The amount of home you can afford is based on the amount of mortgage loan your income can comfortably support. Generally, the amount of mortgage you qualify for is based on three factors:

To know for sure the best thing to do is get bank approved through one of our many lenders. That way you can shop with confidence and you know youre not looking at a home you cant afford.


3. What types of mortgages are available?
[return to top]
There are many types of home loans for you to choose from. Some are listed here but in order to ensure you are getting the best loan for your scenario, you should let your mortgage specialist help you through the decision process.

Fixed-rate mortgage. You pay the same interest rate and same monthly payment of principal and interest for the duration of the mortgage. The most common terms are 30, 20 and 15 years. Fixed-rate mortgages are best if you plan on being in your home for a while.

Adjustable-rate mortgage (ARM). The interest rate stays fixed for an initial interest rate period, which ranges from 1 to 10 years. Then the rate will adjust up or down regularly for the remaining life of the loan based on a specified index. An ARM is a good option if you believe interest rates will go down over the next few years or if you plan on staying in your home for a short period of time.

Home equity line of credit(HELOC). You receive the lender’s promise to advance you up to a specified loan amount. In any amount and at a time of your choosing you can draw on the line by writing a check, using a special credit card, or in other ways. The monthly payment is based on what is actually used, not the full amount of the credit line.


4. What are the benefits of a 15-year mortgage?
[return to top]
A 15-year mortgage allows you to own your home free and clear in half the time of a conventional mortgage with a 30-year term. Although payments are higher with a 15-year mortgage, you'll save thousands of dollars in total interest paid and build equity faster. You should also be able obtain a lower note rate.


5. Are there any special programs for first-time homebuyers?
[return to top]
Yes in many cases there are programs or incentives available to first time home buyers. With the constantly changing market many of these programs have been opened up to all buyers to help spur the housing industry. It is also common that these programs have limited funding or have special underwriting requirements to qualify. Contact your mortgage specialists to see if there any programs or incentives that you may qualify for.


6. What are the tax advantages of owning a home?
[return to top]
Income tax reduction. In the early years of a mortgage, most of your monthly payment covers interest on the mortgage. In most cases, the mortgage interest (and property tax) is deductible from your taxable income, lowering your overall tax bill. Therefore, your after-tax cost of home ownership may be lower than renting. There may be tax implications if you later sell the home at a profit. Consult your tax advisor for more information.

Tax deductible borrowing power. As your home equity increases, you can borrow against it for almost any need with a home equity loan or line of credit.
Because your home equity loan or line of credit is backed by the equity in your home, you may be able to deduct that interest from your taxable income. This could lower your final tax bill. See a tax professional for complete details.

Pride of ownership. Although its not an IRS tax benefit, it should be mentioned that the piece of mind of owning a home and knowing that you can not be displaced from your home is one of the things that most homeowners say is a major factor when buying a home.


7. Should I get prequalified for a mortgage before I shop for a home?
[return to top]
Getting prequalified for your mortgage is the most important first step before you shop for a home. It not only tells you how much home you can buy. It can reveal if you are truly ready as well as any risk factors that might need to be worked through ahead of time. Ask your mortgage specialist about the difference between prequalification and preapproval. If youre serious, you may want to be bank approved!

8. How long will it take to get prequalified for a mortgage?
[return to top]
You can get a response in as little as 30 minutes depending on your risk factors when you prequalify for a mortgage. There are just a few easy steps involved in the prequalification process with an easy form and phone call to complete.

9. What is an impound/escrow account?
[return to top]
In addition to the principal and interest payment on your mortgage loan, you may elect to impound additional funds each month in an impound/escrow account to pay for property taxes and insurance. With some mortgage programs, impounding for taxes and insurance may be required. Having an impound/escrow account allows you to put aside a small portion each month toward the costs of homeowners insurance and property taxes. You send the additional funds each month when you make your mortgage payment. Your bank holds the money in an impound/escrow account and makes the payments for the property taxes and homeowners insurance from the account when they are due.


10. Can I get a loan if I'm not a U.S. citizen or if I live outside the country?
[return to top]
Yes. As long as the property you are buying or refinancing is in the United States and you can provide proof of your right to work in the United States

11. What is PMI (private mortgage insurance)
[return to top]
If you put less than 20% down on most loans, you'll be asked to protect the lender by carrying private mortgage insurance (PMI). Carrying PMI ensures that the debt is repaid if you default on the loan. This charge adds approximately an extra half a percent onto the loan.

FHA mortgages, in return for their low-down-payment requirements, also charge for mortgage insurance premiums (MIP)

---

Below are the answers to your refinancing questions.

1. Should I refinance my mortgage?
[return to top]
The interest rates and the term of your existing mortgage can affect your decision. There are generally a few reasons to refinance.

At Pro City mortgage you will always get an honest assessment of your situation and our trained mortgage specialists will be able to provide you with benefit analysis information so you can make an educated decision.

2. What are the various closing costs involved in refinancing?
[return to top]
Generally costs range from 2% to 5% of your loan amount depending on what your loan amount is. Closing costs can be divided into three main categories:

If there is enough equity in the home, the closing costs may be included in the new loan amount to keep your out-of-pocket costs to a minimum. As a fully compliant mortgage company, you will get your Pro City TrueQUOTE regarding all of the terms of your loan up front.


3. How much equity do I need to refinance?
[return to top]
Depending on the loan you choose you could need as much as 25% equity in your home to as little as no equity in some government loan programs. There are even some programs that will allow you owe a little more than your home is actually worth. To find out the details, you need to talk to one of our experienced mortgage specialists who are constantly trained on the latest programs.

4. Can I combine my first and second mortgages (equity line or loan) when I refinance?
[return to top]
If your second mortgage is a purchase money loan or it has been at least 12 months since you secured the second mortgage (or had a withdrawal on an equity line), you may be able to consolidate it with the first mortgage.

5. Can I refinance if my home is currently for sale?
[return to top]
No, not when its currently for sale. We do have resources available for you in as little as one day off the market. Some lenders require the home to be removed up to 6 months before a refinance is allowed.

6. Will a prepayment penalty affect my refinance?
[return to top]
Prepayment penalties on your existing mortgage could make refinancing more costly. Check the details of your current loan agreement and be sure to factor in the cost of any prepayment penalty when you consider the benefits of refinancing.

7. How long will it take to get prequalified for a refinance?
[return to top]
You can get a response in as little as 30 minutes depending on your risk factors when you prequalify for a mortgage. There are just a few easy steps involved in the prequalification process with an easy form and phone call to complete.

8. Do I need to get an appraisal when I refinance?
[return to top]
In most cases yes, however there are some cases when its not required. You may qualify for a streamlined loan process based on the type of loan you currently have and your personal risk factors.

9. How does a refinance closing work?
[return to top]
The refinance closing is handled the same way your loan was closed when you first purchased your property. After your loan is approved, you'll receive copies of documents you'll need to sign at closing. Depending on where you live, the closing takes place at the office of the escrow company or a mobile signing may be arranged at any place for your convenience. Once you sign the funds from your new loan are sent to pay off your old loan.