Suncoast Mortgage Centers Inc Residential mortgages and commercial loans

Suncoast Mortgage Centers, Inc.

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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
7.	What is an application fee? Answer
8.	What is a pre-payment penalty and why would I want one? Answer
9.	What are some reasons that I may not qualify for a home loan? Answer

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. Suncoast Mortgage Centers, Inc. 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 Depending on your qualification, you may be able to get into a home for no-money down except for a one year pre-paid home owner's insurance policy (which you will pay directly to the insurance company of your choosing) and some miscellaneous costs, such as home inspections, and possibly an appraisal. Ask us how you can get the best deal possible when purchasing a home.

Q :	What is an application fee?
A :	Don't Pay This!!! Application fees are ways for lenders to recoupe their expenses if you withdraw, cancel or get turned down for a loan. Many of these are labled as "non-refundable" so you will have a difficult time getting your money back. Suncoast Mortgage Centers, Inc. does not charge any application fees on residential loans at all. We only ask that you pay for the appraisal directly to the appraiser once you are approved and ready for that next step.

Q :	What is a pre-payment penalty and why would I want one?
A :	A prepayment penalty is when your mortgage company penalizes you for paying off your loan within a specified amount of time. For instance if you have a 1 year pre-payment penalty, you cannot pay off the loan, in its entirty, until after that year has passed. Many times you can pre-pay much more than your payment, for instance most allow up to 20% of the outstanding balance within the calender year, but once you pay more than that, you will be penalized. The penalty can be as high as 6 months of interest on the outstanding balance. There are many variations of pre-payment penalties, be certain to know and understand what your penalty is, and how it works, if you have one or are offered one. Be careful, many consumers don't even know they have a penalty until it is too late. Don't take for anything for granted.

Q :	What are some reasons that I may not qualify for a home loan?
A :	There are many reasons you may not be able to qualify, but most of the time it is directly a result of having too many things worng with the same transaction. For instance if you can't prove your income because you didn't file taxes or you show much less than your actual earnings, it does not mean you cannot get a loan. If you have decent credit and some money down then you should be able to get the loan easily. But now if you combine the fact of un-verifiable income with a low credit score, the credit score can be the cause of not being able to qualify. Everything is relative and subject to what the industry call "compensating factors". Other factors that cause the inability to qualify can be... Credit score too low for 100% program. Qualify for 90% but applicant cannot come up with 10% down. Credit and assets are average but has not worked and cannot provide any proof of employment. Not enough equity in the home to refinance. Value of home is not sufficient for the transaction. Tax liens, certain child support obligations, IRS liens, etc. Many of these items can hinder a process but having any or all of them does not mean you cannot get a loan. It is important for us to know every angle of your situation so we can adequately provide you with solutions. This is why it is absolutely imperative to speak with a "qualified professional". An inexperienced mortgage person can easily overlook vital information and ultimately cost you alot of wasted effort, time, and worste of all, money!