QUESTIONS COMMONLY ASKED

What real benefits do homeowners have?
Being a homeowner gives one a sense of stability and permanence. It gives the flexibility
to make home improvements that meet your specific needs wherever and whenever you
want to. You are not subject to periodic rent increases, and the interest you pay may be
deductible from your taxes, in some cases up to 100%. Ask your tax preparer or CPA how buying a home now would affect your tax situation.

What is the difference between applying for a loan and getting pre-qualified?
Before you begin to look for your home, it is important that you visit a home loan lender such as Atlas Mortgage Services. We will analyze your assets, debts, and sources of income. Based on the preliminary
analysis, they will tell you the amount of loan for which you qualify – this is called a prequalification.
Once you find the home you want to purchase, you can then formally apply
for your loan, and we will ask you to provide the necessary documentation (e.g.
paystubs, bank account information, etc.) to verify that the information you provided
during your pre-qualification is accurate.

What is a credit report?
A credit report contains your payment history, shows that you paid your debts on time, if you have ever been late in making payments, or if you have ever failed to make
payments. Lenders use the credit report to determine a potential borrower’s ability to
make timely payments, and to judge whether or not the person would make a good
prospect for a loan. If you are thinking about buying a home, you will need to show us
that you can make your payments in a prompt and responsible manner. You can ask your mortgage professional at Atlas Mortgage Services on tips to obtain and maintain a more favorable credit score.

What are points?
One point is equivalent to 1%of the dollar loan amount.

Are the requirements for the purchase of a condominium the same as for a house?
The necessary documentation to qualify for a loan is the same for condominiums
as for houses, no matter what size they are. Whenever you go apply for a loan,
make sure to take your last three bank statements, your tax declarations for the
past two years, and your last two paystubs.

What types of insurance will I need for the closing?
You will need to present proof of at least two types of insurance in order to close
on the home. The first is homeowner’s or hazard insurance, which protects your
home in case of a fire or other catastrophe, and protects you in case someone is
injured on your property. The second is title insurance, which protects you and
the lender against losses due to disputes about the ownership of the property or
any legal demand against it.

Why should I get a professional inspection?
The inspection of a home is a very important step, since it can identify any
existing problem that the home or property might have, whether minor or major,
prior to the purchase.

What should I do before the closing?
It is very important to keep in mind that, prior to the closing, you should be certain
that all conditions you specified in the sales contract have been met. If the
owners need to do any repairs to the home, make sure that they have completely
finished them. And prior to signing any document, we recommend that you make
sure that all the information in it is correct.

What is the difference between a fixed-rate loan and an adjustable-rate loan?
With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest rate changes periodically, typically in relation to an index. While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan will likely change. There are advantages and disadvantages to each type of mortgage. The best way to select a loan product is by talking to us.

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).

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. Atlas Mortgage Services can help you evaluate your choices and help you make the most appropriate decision.

What does my mortgage payment include?
For most homeowners, the monthly mortgage payments include three separate parts:
• Principal: Repayment on the amount borrowed
• Interest: Payment to the lender for the amount borrowed
• Taxes and Insurance: 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.

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 (We offer a variety of loans that can normally accommodate each borrower’s needs. Some of these programs have less stringent qualification guidelines, while others require little or no down payment.)
• Closing Costs: Costs associated with processing paperwork to purchase or refinance a house. In many cases, the money needed for the closing can be incorporated into the loan amount, reducing the amount of money a borrower needs to have on hand to purchase a home.

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