Q: What are the advantages of a home purchase?
A: Purchasing a home can provide you with personal benefits such as a sense of investing in your community and pride for achieving the dream of homeownership. There are financial benefits for you as well. As you continue to make mortgage payments, you’ll build home equity, as opposed to paying rent to someone else. You are able to take a tax deduction for interest paid when filing your income tax.
Q: How is my monthly payment applied to my mortgage loan?
A: Your monthly mortgage payment includes a payment to the principal balance, interest, and escrow, otherwise known as PITI (principal, interest, taxes and insurance).
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.
Q: What is escrow?
A: This is an amount that’s included in your monthly mortgage payment to cover your taxes and homeowner’s insurance. Your lender keeps this amount in an account to make the payments on your behalf when they come due. You are able to take the amount of property taxes pad as a tax deduction when filing you income tax.
Q: How long does it take once I have submitted an application to receive a decision?
A: You should receive a decision on your application in about 2–3 business days.