Mortgage School: Mortgages Unlimited Answers 

Your Frequently Asked Questions (FAQs)

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 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. Contact us for help to determine exactly how much you can afford.
 

Q: What’s the difference between a fixed-rate mortgage loan and an adjustable-rate mortgage 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 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 to talk 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. Let Mortgages Unlimited 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:

1. Principal: Repayment on the amount borrowed

2. Interest: Payment to the lender for the amount borrowed

3. Taxes and 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 to purchase a home 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
  • A 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

 

Client Testimonials

Thank you for your extraordinary efforts to get us a home loan with a great rate. We’re fortunate to have found you and the Mortgages Unlimited t...

— Neil and Chris S., Andover, Minnesota

As we close in to 1 year at the house I want to thank you for all the hard work in getting this home for us. I remember all the hoops and phone cal...

— Jamie and Becky Q. Lakeville, MN

My wife Christy and I refinanced with Mortgages Unlimited today and just want to tell you what a great job the loan officer did in explaining the r...

— Eric and Christy M. Maple Grove, MN

Thanks for all your help with our mortgage - we really appreciate it. We will definitely be referring our friends....

— Ryan M & Allison S. Waconia, MN

I just wanted to say THANK YOU SO VERY MUCH for all of the hard work you did to get us into our first home. As first time home buyer’s it is very...

— Joe and Heidi D. Buffalo, MN

Awards & Affiliations

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7365 Kirkwood Court N, Ste 300 Maple Grove, MN 55369
NMLS Lic #225504

P: 763.416.2600

F: 612.466.3164

Mortgages Unlimited, 7365 Kirkwood Court N, Ste 300, Maple Grove, MN 55369. NMLS Lic #225504 Copyright ©2017. All Rights Reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all dollar amounts. Other restrictions and Limitations apply. Mortgages Unlimited is required to disclose the following license information: Minnesota: NMLS Lic #225504. Any such offer may only be made in accordance with the requirements of Minn. Stat. Section 47.206 (3) and (4).