• How do I know how much house I can afford?

    Generally speaking, you can purchase a home with a value of two or three times your annual household income. However, the amount that you can borrow will also depend upon your employment history, credit history, current savings and debts, and the amount of down payment you are willing to make. You may also be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value. Give us a call, and we can help you determine exactly how much you can afford.

  • 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 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, and 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. American Royal Mortgage Corporation 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 & 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 Closing Costs: Costs associated with processing paperwork to purchase or refinance a house

  • What is a mortgage?

    A Mortgage (also called a home loan) is a legal contract made between a lender and a borrower that uses property as collateral to secure the loan. The lender can take possession of the property if the borrower fails to pay the prearranged home loan payments.

  • What is a mortgage refinance?

    Occurs when borrower uses the money from a refinanced loan to pay off an existing home loan. Borrowers typically do this to extend their home loan period, apply for a lower interest rate, or to use some money out of their equity.

  • What is a home equity loan?

    A is a type of loan that allows a homeowner to obtain cash loans based on the present value of their property minus the mortgage amount still left to be paid off. Homeowners often apply for home equity loans to pay for expenses such as home remodeling, debt consolidation, college education, and other long-term investments.

  • What is a reverse mortgage?

    Reverse mortgages are loans that allow homeowners to transfer some of their home equity into cash. In contrast to traditional home loan mortgages, reverse mortgages do not require borrowers to repay their home loan until the homeowner no longer lives primarily at that residence, although he or she stills owns the residence.

  • What is a mortgage lender?

    A mortgage lender is a financial institution that provides prospective homeowners with the funds over a long-term period to pay off their home loan mortgage. Borrowers are required to pay monthly installments to their lender which includes principle, interest, and additional lender fees. Examples, mortgage bankers and mortgage brokers.

  • What is the difference between a mortgage broker and a mortgage banker?

    A mortgage broker is the middleman who helps match borrowers with lenders based on corresponding needs and standards. Mortgage brokers arrange more the 80% of all transactions between borrowers and lenders, yet mortgage bankers actually finance and distribute the largest portion of home loans compared to all other lenders.

  • What is a mortgage principle?

    The mortgage principle is the amount of loan money that a homeowner borrows excluding the interest.

  • What is an interest-only mortgage?

    Are loans that require the borrower to pay only interest on the principle in monthly installments for a fixed period.

  • What is an amortized mortgage?

    Amortized Mortgages refers to loans that are paid in installments comprised of both principle and interest, and which is paid off (or amortized) over a fixed period of time.

  • How do you calculate LTV or loan-to-value ratio?

    The loan-to-value (LTV) ratio of your home is calculated by dividing the fair market value of your home by the amount of your home loan.

  • What are lender fees?

    These fees usually range anywhere from 2 to 5 percent and may include, but are not limited to, things such as appraisal costs, document preparation, and application costs.

  • What is the Truth in Lending Act?

    The Truth in Lending Act is a federal law that was enacted as part of the Consumer Protection Act. This law requires lenders to reveal all information to the borrower and detail all costs associated with the transaction.

  • What are points?

    Points, also referred to as discount points, are an upfront interest paid to buy a lower rate on the mortgage for the term of the loan. A point is expressed as a percentage of the total loan amount. For example on a loan amount of $100,000, one point would be equal to $1,000 or two points would be equal to $2,000. This amount would be paid at closing in addition to the down payment and other closing costs.

    Points are not beneficial to every borrower and need to be evaluated on a case-by-case basis. To determine if it is beneficial to you to pay points, you need to first calculate the principal and interest payment for the loan amount based on a rate with 0 points and then also, a payment based on a rate with points. The difference in the two payments is the amount you will save by paying points.

    The next step is take the total cost of the points and divide by your monthly savings. This figure shows you how many months it will take to recoup the costs of the points. If you plan on being in your home longer than it takes to recoup the costs and can afford to pay the points, then it is an advantage to you. However if not, then you are better off to take a rate without points.

  • 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. American Royal Mortgage Corporation can help you evaluate your choices and help you make the most appropriate decision.

  • Is an appraisal required?

    An appraisal is required for a purchase transaction or to refinance a mortgage. (The exception to this is, in some instances, an appraisal will not be required for a home equity that is less than $50,000.)

  • What is considered acceptable credit history?

    Generally any payments that have been past due over thirty (30) days in the past two (2) years may require a detailed letter of explanation. Each situation will be reviewed on a case-by-case basis with the following being of importance: the number of times delinquent, the type of account that is or was delinquent, the reason for the delinquencies and a satisfactory explanation as to why these would not occur again.

  • How can I get started?

    Getting started is easy. An M&T reverse mortgage specialist will meet with you in person or talk with you over the phone about your reverse mortgage options. You?ll learn how a reverse mortgage works, how they compare to other options and how much money you may be eligible to receive. Our goal is to educate you about reverse mortgages so you?re comfortable deciding whether one is right for you. Then you?ll decide whether you want to take the next step, completing reverse mortgage counseling. After that, you can apply.

  • When should I lock in my interest rate?

    To be an informed buyer, you will want to be aware of what interest rates are doing. Have they been falling or rising? Depending on the market, you may want to wait before locking in an interest rate, or you may want to lock in as soon as possible. Although we can?t tell you when you should lock-in, we can provide you with some tools that will keep you advised on what the markets are doing and general trends.