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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 is an index and margin used in an ARM? Answer
4.	How do I know which type of mortgage is best for me? Answer
5.	What does my mortgage payment include? Answer
6.	How much cash will I need to purchase a home? Answer

Q :	How do I know how much house I can afford?
A :	There are many things that effect how much a borrower can afford. Job tenure, credit, down payment, debt ratios are just a few. Much of the credit decision now is made by automated underwriting systems and credit is probably the most important factor of all. The higher your credit score the more you may be able to afford. 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. Since there is no simple answer the best way to find out is to simply click on the "Apply Now" button and let one of our professional loan officers pre-qualify you.

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 talking to us. Give us a call TODAY!

Q :	How is an index and margin used in an ARM?
A :	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).

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. First National Bank can help you evaluate your choices and help you make the most appropriate decision. Our professional loan officers will work with you to determine the best option for your particular financial situation.

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.

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. There are many lending options today including some that require little to no down payment. Certain types of loans require as little as $ 500 total contribution by the borrower. This may require closing costs that are either financed or paid by the seller. There are many types of down payment assistance also available depending on the type of loan that you may qualify for. Contact one of our expert loan officers to find out just how much you will need to put down. Call us today!