All About AZ
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Am I too "YOUNG" to buy a house? Do I "EARN" enough to buy a house? What is an "ARM"? What is a "BALLOON" loan? What does "BUYDOWN" mean? What is a "CAP"? What is the "CEILING FLOOR"? What is a "CONVENTIONAL LOAN"? What are "CONVERSION FEATURES"? What is an "FHA" loan? What is a "FIXED RATE" mortgage? What are "GOVERNMENT GUARANTEED LOANS"? What are "GOVERNMENT INSURED LOANS"? What is an "INDEX"? What is an "INSURANCE OR GUARANTEE"? What is an "INTERVAL"? What is a "JUMBO" loan? How does a "LEVEL PAYMENT FULLY AMORTIZED" loan work? What is a "LOAN COMMITMENT"? What is a "MARGIN"? What is a "PAYMENT CAP"? How does a "STRAIGHT LINE AMORTIZED LOAN" work? What is a "VA" Loan? A - The maximum adjustment of the interest rate permitted at any interval. Q - What is the "CEILING FLOOR"? Top A - The highest of lowest interest rates that may be charged during the term of the loan.
Q - What is a "CONVENTIONAL LOAN"? Top A - A loan which is not insured or guaranteed by a government agency.
Q - What are "CONVERSION FEATURES"? Top A - Generally, these allow changing an Adjustable Rate Loan to a Fixed Rate Loan.
Q - Which are government "GUARANTEED "loans? Top A - VA or RECD Q - Which are government "INSURED"loans? Top A - FHA or RECD
A - The published rate of interest that is the basis for calculating the new interest rate.
Q - What is an "INSURANCE OR GUARANTEE"? Top A - To provide extra security to the lender above the borrower's credit worthiness and property as collateral. Q - What is an "INTERVAL"? Top A - How often the interest rate is adjusted. Q - How does a "LEVEL PAYMENT FULLY AMORTIZED" loan work? Top A - The principal and interest payment is constant each month. A - The increment above the index that is paid, such as prime + 2%. Q - What is a "PAYMENT CAP"? Top A - The maximum adjustment that the payment may be raised at an interval. Q - How does a "STRAIGHT LINE AMORTIZED LOAN" work? Top A - The principal part of the payment is constant each month, the interest portion declines each month because the balance is declining. Q - What is a "FIXED RATE"? Top A - The Interest Rate of the Mortgage remains
the same throughout the term of the loan.
Q - What is an "FHA" loan? Top A - A Government backed loan which allows for
more flexibility in qualifying and other aspects of getting approved.
A - A Government backed loan for veterans that
has special allowances, such as no down payment.
A - An Adjustable Rate Mortgage - the rate for
the loan will change (or adjust) on a regular basis after a set time
period.
Q - What is a "BALLOON" loan? Top A - The rate on a Balloon Mortgage is fixed
for a set number of years, then the balance of the loan amount will be
due.
Q - What does "BUYDOWN" mean? Top A - Buydowns reduce the interest rate of a
mortgage either permanently, or for a temporary set time period.
Q - What is a "JUMBO" loan? Top A - Jumbo refers to the size of the loan
amount. Currently, "jumbo" loan amounts exceed $275,000
Q - What is a "LOAN COMMITMENT"? Top A - A written approval for a specified loan
amount and payment, based on your current financial situation.
Q - Am I too "YOUNG" to buy a house? Top A - The fact is among all the things that mortgage lenders look at,
the most important are what is your income compared to the debt
you’re currently carrying, what is your credit history,
and how much do you have in savings.
Q - Do I "EARN" enough to buy a home? Top A - The average income level needed to support monthly mortgage
payments and live a normal stress free life varies from location
to location as does the price for a home. Fortunately it is not
hard to take the guesswork out of knowing whether you can qualify.
Before starting to look for a house, try a mortgage calculator,
see what you can afford, and then talk to a qualified lender to help you
determine how much you qualify for.
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