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Generally, you can purchase a home with a value of two or three times your annual household income. However, the amount you can borrow also depends on your employment history, credit history, current savings and debts, and the amount of down payment you want 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. Call one of our mortgage originators. We’ll be happy to help you determine exactly how much you can afford.

How much cash will I need to purchase a home?

Typically, you will need to supply:

Earnest money: the deposit supplied when you make an offer on the house
Down payment: Percentage of the cost of the home due at settlement
Closing costs: Costs associated with internal and external services that facilitate the purchase transaction

Are there any programs available to help with down payment and closing costs?

There are programs and grants that help with both down payment and closing costs. Contact First American Bank Home mortgage; we’ll be happy to discuss the best choice for your needs.

Do I need to sell my current home before applying for a new mortgage loan?

You may need to sell your home before you can close on the new one, depending on your income and debt levels. Ask our mortgage originators if a temporary loan, called a bridge loan, might be the answer for you.

How do I know which type of mortgage is best for me?

There is no simple formula; the choice depends on many factors including your current financial picture and how long you intend to keep your house. First American Bank Home Mortgage can help you evaluate your choices and make the decision that fits your circumstances best.

What does my mortgage payment include?

For most homeowners, the monthly mortgage payments include:

Principal: repayment on the amount borrowed
Interest: payment to the lender for the amount borrowed
Taxes and insurance: monthly payments are normally made into a special escrow account for items like hazard insurance and property taxes. This feature is optional. You can also arrange for the fees to be paid by you directly to the County tax Assessor and property insurance company.

What is title insurance and how do I know how much I need?

Title insurance is a one-time fee for the title insurance policy, paid at closing. It protects the lender against losses from disputes over the title of a property, such as unknown liens. Based on the value of the home and the amount of your mortgage, your closing agent or attorney will advise you on the proper coverage.

How do I determine how much homeowner’s insurance I need?

Required by the lender, your homeowner’s insurance policy covers the cost to rebuild the home. Your insurance company will give you a quote based on information about the property.

What is an Annual Percentage Rate (APR)

An APR is the total annual cost of your mortgage loan, which includes the interest rate, plus loan fees points and any other charges. It is helpful in comparing the mortgage rates of different loan programs.

Interest rates fluctuate so often; how do I know when to “lock” in the rate?

With all programs, you must lock your rate at least five days before closing.
If you have a contract on a property, you can lock in your rate within 90 days of closing.
If you are refinancing, you can lock in your rate within 45 days of closing.