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FAQ

  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 the application process? Answer
  8. How do I monitor my credit? Answer
  9. How do I fix errors on my credit report? Answer
  10. How can I protect my privacy? Answer
  11. How can I file a complaint? 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.

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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.

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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).

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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. KS Mortgage can help you evaluate your choices and help you make the most appropriate decision.

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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.

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    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.

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    Q

    What is the application process?

     
    A
  • Contact is made with a Loan Officer
  • All pertinent loan application information is disclosed to the loan officer and important questions are addressed so the loan officer can design the proper loan scenario for you.
  • A credit report is pulled.
  • An application is signed
  • Disclosures are signed
  • Explanation letters are written to explain specific situations that affect your financial ability to repay a mortgage loan.
  • Supporting documentation is presented to the mortgage company to validate the information provided for the loan application.
  • An underwriting pre-approval is performed by an automated underwriting service or a manual underwriter.
  • A pre-approval letter with conditions is presented to you.

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    Q

    How do I monitor my credit?

     
    A

    To qualify for your home loan contact a loan officer today.

    To gain access to your credit report, below are a few links for your convenience. Each year you are entitled to a free credit report from each of the three credit bureaus. To obtain this, visit the first link below.

  • Free annual credit report
  • My FICO
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    Q

    How do fix errors on my credit report?

     
    A

    You have a right, under the Fair Credit Reporting Act, to dispute the completeness and accuracy of information in your credit file.

    When a credit reporting agency receives a dispute, it must reinvestigate and record the status of the disputed items within a reasonable amount of time, unless it believes the dispute is frivolous or irrelevent. If the credit reporting agency cannot verify a disputed item, it must delete it. If your report contains erroneous information, the credit reporting agency must correct it. If an item is incomplete, the credit reporting agency must complete it.

    For example, if your file shows that you were late in making payments in accounts, but fails to show that you are no longer delinquent, the credit reporting agency must show that your payments are now current. If your file shows an account that belongs to another person, the credit reporting agency would have to delete it. Also, at your request, the credit reporting agency must send a notice of correction to any report recipient who has checked your file in the last six months.

    For items in your credit profile which you feel deserve further investigation (such as an account that was paid late due to the loss of job, military call-up, or unexpected medical bills), you can send a brief statement to the approporiate credit reporting agency. The information will be placed in your credit profile and will be disclosed each time it is accessed.

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    Q

    How can I protect my privacy?

     
    A

    A practice that KS Mortgage determines to be highly unethical is taking place in the mortgage industry today. When you ask to have your credit pulled by a mortgage company of your choice, the credit bureaus may then sell your name and personal information - including your phone number - to as many mortgage companies that will pay them for your information. You then may get inundated with phone calls and mail by companies who have invaded your privacy.

    The mortgage companies that treat your private information in this fashion call this type of practice "trigger leads". With this practice you can not be sure who your information is being sold to and for what purpose.

    To protect yourself from the credit bureaus selling your private and highly personal information to unknown people please visit:

  • Opt-Out Prescreen
  • The above website offers you the opportunity to withdraw your name and personal information from the list the credit bureaus will sell to any and all bidders.

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    Q

    How can I file a complaint?

     
    A

    Consumers wishing to file a complaint against a company or a residential mortgage loan originator should complete and send a complaint form to the Texas Department of Savings and Mortgage Lending, 2601 North Lamar, Suite 201, Austin, Texas 78705. Complaint forms and instructions may be obtained from the department's website at www.sml.texas.gov. A toll-free consumer hotline is available at 1-877-276-5550.

    The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department's website at www.sml.texas.gov.

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