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1. How do I know how much house I can afford? Answer
2. What is the difference between a fixed-rate loan and an adjustable-rate loan? Answer
3. How do I know which type of mortgage is best for me? Answer
4. What does my mortgage payment include? Answer
5. How much cash will I need to purchase a home? Answer
6.  What documentation do I need to apply? Answer
7.  Are there any loan programs that do not require a down-payment? Answer
8.  What is mortgage insurance and why is it required? Answer
9.  If I've filed bankruptcy in the past few years, will I still qualify for a mortgage? Answer
10. How is my monthly mortgage payment applied to my mortgage loan? Answer
11.  What is the difference between pre-qualification and pre-approval? Answer
12.  Is there a fee to submit my application online? Answer
13. Once I've submitted my application online, how long will it take before I know if I've been pre-qualified? Answer
14. What is the difference between the interest rate and the annual percentage rate (APR)? Answer
15.  What is a discount point? Answer
16.  What is an escrow account? Answer
17.  What is a rate lock? Answer
18.  What are points? Answer

Q : How do I know how much house I can afford?
A : 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 our representatives at Palisades Credit Union a call at 845-602-1214, and we can help you determine exactly how much you can afford.
 
Q : What is the difference between a fixed-rate loan and an adjustable-rate loan?
A : 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 speaking with a representative from Palisades Credit Union at 845-602-1214.
 
Q : How do I know which type of mortgage is best for me?
A : 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. Palisades Federal Credit Union can help you evaluate your choices and help you make the most appropriate decision.
 
Q : What does my mortgage payment include?
A : 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.
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    Q : How much cash will I need to purchase a home?
    A : 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
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    Q :  What documentation do I need to apply?
    A : Depending on the loan you apply for, the documents will vary. Some common documents institutions require are W-2s, employment information, and asset verification. When you speak with a representative from the institution, they will provide you with a list of items needed.
     
    Q :  Are there any loan programs that do not require a down-payment?
    A :  Yes there are loan programs that do not require a down payment depending on credit, employment history, and other determining factors. Contact us for more information about the different programs we offer.
     
    Q :  What is mortgage insurance and why is it required?
    A : Mortgage insurance protects the lender against taking a financial loss in the event the borrower stops making payments. It is required on mortgage programs that require little or no down payment and the lenders exposure is greater than 80% of the purchase price or appraised value, whichever is less. Mortgage insurance can be avoided by putting down at least 20% on the property.
     
    Q :  If I've filed bankruptcy in the past few years, will I still qualify for a mortgage?
    A :  Yes, it is still possible to qualify for a mortgage. There are many programs out there for people looking to purchase a home but have lower than average credit. Credit is one of the determining factors when qualifying for a loan, but not the only one.
     
    Q : How is my monthly mortgage payment applied to my mortgage loan?
    A : Your monthly mortgage payment includes a payment to the principal balance, interest, and escrow.
     
    Q :  What is the difference between pre-qualification and pre-approval?
    A :  Pre-qualification is a lender's judgment of your ability to make payments on your mortgage, based on your verbal statement of income, assets, and employment history. Pre-approval is the underwriting decision that you are conditionally qualified and is subject to the lender's review of your completed application, verification of your income, assets, employment history, credit check, appraisal and other determining factors.
     
    Q :  Is there a fee to submit my application online?
    A :  No, applying online is free.
     
    Q : Once I've submitted my application online, how long will it take before I know if I've been pre-qualified?
    A : You will receive a phone call from one of our Loan Officers within 1-2 business days of submitting your application.
     
    Q : What is the difference between the interest rate and the annual percentage rate (APR)?
    A : The interest rate is the rate you agree to pay for your mortgage loan. It is used to determine the interest portion of your monthly payment. The annual percentage rate (APR) includes your interest rate and prepaid finance charges to give you an average yearly rate.
     
    Q :  What is a discount point?
    A :  A discount point is generally a percentage of the loan amount and is paid to the lender to buy down or lower an interest rate.
     
    Q :  What is an escrow account?
    A :  Your monthly payment includes an amount which is placed in a fund held by the mortgage company to pay your annual property taxes and insurance premiums. This fund is referred to as an escrow account.
     
    Q :  What is a rate lock?
    A :  A rate lock is a contractual agreement between the lender and buyer. There are four components to a rate lock: loan program, interest rate, points, and the length of the lock.
     
    Q :  What are points?
    A :  It is an upfront cash payment required by the lender as part of the charge for the loan, expressed as a percent of the loan; e.g. "2 points means a charge equal to 2% of the loan balance.