Mortgage FAQs (Frequently Asked Questions)

How do I know how much house I can afford?
What is the difference between a fixed-rate loan and an adjustable-rate loan?
How is an index and margin used in an ARM?
How do I know which type of mortgage is best for me?
What does my mortgage payment include?
How much cash will I need to purchase a home?
How does the mortgage loan process work?
How do I know if I can get a Mortgage Loan?
How do I find a Mortgage Lender?
What is a credit score?
Can I become a homebuyer even if I have had bad credit, and don’t have much for a down-payment?
What documents do I need to have ready while appling for a mortgage loan?
I don’t have the standard documentation necessary to get a mortgage loan, can I still apply for a mortgage loan?
When should I refinance my mortgage?
Can I pull Cash Out on a new refinance?
How can a shorter term save me money on a Fixed Rate Mortgage?
What is a good faith estimate (GFE)?
How are the funds from my escrow account used?

Q: How do I know how much house I can afford?

A: 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.

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.

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. Gold Mortgages 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.

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.

Q: How does the mortgage loan process work?

A: A qualified mortgage lender works with you to choose the Best Mortgage Loan Program and lowest mortgage interest rates available to you. You then need to provide a list of the documents/documenation needed to complete your mortgage loan and once this is done your final loan documents are signed by you and you get a date when the mortgage loan will be completed.

Q: How do I know if I can get a Mortgage Loan?

A: A good start is, you try our Mortgage Calculators to see how much of a mortgage loan you could pay. You are also welcome to contact us using any of the methods provided on the menu. We will help you evaluate your loan potential. We are in the business and know what kinds of mortgage programs are out there and can help you choose a mortgage program that will be right for you.

Another good idea is to get pre-qualified for a mortgage loan. That means you apply for a mortgage loan before you actually start looking for a home. Then you’ll know exactly how much you can afford to spend, and it will speed the loan process once you do find the home of your dreams.

Q: How do I find a Mortgage Lender?

A: Contact Us or Call (844) 945-4653.

Q: What is a credit score?

A: A credit score is an indication of your credit history and assist in measuring your ability to repay a debt in the future.

Q: Can I become a homebuyer even if I have had bad credit, and don’t have much for a down-payment?

A: Yes. Your credit doesn’t have to be perfect to purchase a home. Difficult financial situations are often because of illness, divorce, or temporary unemployment. If you can demonstrate that the problem was in the past, and you have been able to re-establish a good track record for a sufficient amount of time, you may be in a good position to get a mortgage loan.

Q: What documents do I need to have ready while applying for a mortgage loan?

A: Good question! You should at least have:

  • If you and your spouse are applying for a mortgage loan, social security numbers for both you and your spouse.
  • Consecutive pay stubs for the last month.
  • Copies of your checking and savings account statements for the past 6 months.
  • Evidence of any other assets like bonds or stocks.
  • List of all credit card accounts and the approximate monthly amounts owed on each.
  • List of account numbers and balances due on outstanding loans.
  • Copies of your last 2 years’ income tax statements. Depending on your mortgage lender, you may be asked for other information/documents too.
Please see Required Documents for a detailed list depending on your income situation.

Q: I don’t have the standard documentation necessary to get a mortgage loan, can I still apply for a mortgage loan?

A: We offer special mortgage loan programs for such type cases, for further information contact us using the Contact Us Form.

Q: When should I refinance my mortgage?

A: To determine whether you should refinance, compare the following:

  • Current mortgage rates compared the rate you are currently paying.
  • Your current mortgage payment compared to what your new mortgage payment would be with a lower rate, or features such as interest-only payments.
  • The amount of time you expect to live in your home.
  • The cost to refinance your mortgage. (Ask about our NO COST REFINANCE)

Q: Can I pull Cash Out on a new refinance?

A: Yes, we have a lot of different Cash Out Refinance mortgage loan programs available depending on how much equity you have in your home and your credit and income situation. We may have to consolidate your debts for you to qualify. Just talk to one of our knowledgeable mortgage consultants and we will be happy to show you what we can do.

Q: How can a shorter term save me money on a Fixed Rate Mortgage?

A: Simple, if you go for a shorter mortgage loan term, you can save thousands of dollars in interest expense because you’ll be paying off the mortgage loan sooner. Although your mortgage payment may be more each month, it will save you thousands & thousands of dollars in the long run.

Q: What is a good faith estimate (GFE)?

A: A good faith estimate (GFE) is an estimate that outlines the costs you will incur during the mortgage loan. This is provided to you when you apply for your mortgage loan.

Q: How are the funds from my escrow account used?

A: The funds from your escrow account are used to pay property taxes and insurance. The payment is called an escrow payment, and a mortgage servicer withdraws the money.