Common Questions from Homebuyers..4

1. So what will my mortgage cover?
• Answer: Most loans have 4 parts: principal: the repayment of the amount you actually borrowed; interest: payment to the lender for the money you've borrowed; homeowners insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders; and property taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year. Most loans are for 30 years, although 15 year loans are available, too. During the life of the loan, you'll pay far more in interest than you will in principal - sometimes two or three times more! Because of the way loans are structured, in the first years you'll be paying mostly interest in your monthly payments. In the final years, you'll be paying mostly principal. 

2. What do I need to take with me when I apply for a mortgage?
• Answer: Good question! If you have everything with you when you visit your lender, you'll save a good deal of time. You should have:

•  1) social security numbers for both you and your spouse, if both of you are applying for the loan;

• 2) copies of your checking and savings account statements for the past 6 months;

• 3) evidence of any other assets like bonds or stocks;

• 4) a recent pay check stub detailing your earnings;

• 5) a list of all credit card accounts and the approximate monthly amounts owed on each;

• 6) a list of account numbers and balances due on outstanding loans, such as car loans;

• 7) copies of your last 2 years' income tax statements;

•  8) The name and address of someone who can verify your employment. Depending on your lender, you may be asked for other information.