|*updated as of quoted rates reflect good credit scores with a 20% down payment on $160,000 home - offer may terminate at any time without notice - rate and annual percentage rate calculated on a 365 day year with typical/normal closing costs, Rates/APRs subject to change with closing costs - properties and applicants must quality - other restrictions may apply.|
- How does the mortgage process work? Answer
- How do I know how much house I can afford? Answer
- What does my mortgage payment include? Answer
- How much cash will I need to purchase a home? Answer
- How do I know which type of mortgage is best for me? Answer
- What is the difference between a fixed-rate loan and an adjustable-rate loan? Answer
- How is an index and margin used in an ARM? Answer
- What is the difference between a mortgage broker and a bank? Answer
- How do I know if my credit will qualify me for a loan? Answer
- How can I improve my credit score? Answer
Once you select GEO Mortgage to obtain your home loan, you'll be amazed at how quickly and simply the loan process moves. Before you know it, you'll have a mortgage that suits your lifestyle and saves you money.
Throughout the loan-application process, we provide you with regular updates. You can also e-mail us with questions or new information. And if you want assistance, a mortgage expert who can answer questions is just a phone call away.
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.
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.
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
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. GEO Mortgage Services can help you evaluate your choices and help you make the most appropriate decision.
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.
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).
A bank typically offers their own interest rate and closing cost. A mortgage broker represents many mortgage companies, banks, insurance companies and other lenders to bring you a wider variety of loan programs and interest rates. Mortgage brokers complete the mortgage process and deliver a finished loan to the lender. This allows the lender to greatly reduce costs and offer a wholesale rate to the broker. This savings is passed along to the borrower by substantially lowering the interest rate.
If you don’t know your credit score, click here for more info. If you have recently seen your credit and your score is above 620, you may be eligible for some loan programs. Please contact a loan officer to find out more.
There are many ways to improve your credit score, but the following methods are the most effective:
- Always pay the minimum amount. While it is not a good idea to pay your bills late (penalties), it won’t affect your credit score negatively unless you pay more than 30 days late.
- Make purchases using revolving credit cards. Pay your balance in full at the end of the month. Doing this makes every purchase count by letting the credit bureau know about it.
- Try to maintain credit balances below 35% of your credit limit. If you are maxed out or have high balances, your score will go lower.
- Don’t open new accounts. This will lower your score. You don’t need various credit cards for department stores, gas, etc. Instead, use your same credit card for all purchases and pay it at the end of the month.
- Don’t buy on installment of “No Payments Until...” Credit is extended to you and stays at its highest balance for many months until payments start. This will lower your credit score.
- Don’t add your name to another’s account. When you co-sign on another account, you are using your credit. This will be listed as an expense to you. If the other person defaults or pays slowly, your credit score will drop as well.