FAQ's
Purchasing A Home
As you evaluate whether to rent or buy a home, here are some things to keep in mind:
- The lower your mortgage rate, the less interest you will pay over the term of your home mortgage (with a fixed rate mortgage)
- The more rents go up, the more you may save by owning a home (with a fixed rate mortgage)
- The longer you plan to stay in your home, the more likely it is that you would benefit by buying rather than renting*
Our Affordability Calculator can give you a rough estimate of how much you can afford to pay each month on a mortgage. For a more precise estimate, call ZABE Mortgage to get pre-qualified.
*The interest you pay on a mortgage may be tax deductible as well. Consult your tax advisor about the deductibility of mortgage interest.
Yes. ZABE Mortgage offers loans for primary homes, second homes (vacation homes) and investment properties.
- Primary homes (owner-occupied primary residence) – the down payment can be as low as 3.5% for FHA loans; 100% financing may be available for VA loans
- Second homes – the down payment can be as low as 10% (conventional loans)
- Investment properties – down payments are usually 20% or more
*For all property types, mortgage interest may be tax deductible, depending on how much time you spend in the property. Consult your tax advisor for information about tax deductions. For more information about loan options for different property types, contact a Loan Officer at ZABE Mortgage today or apply online
A fixed rate mortgage locks in your interest rate for the life of your loan.
- Your base monthly mortgage payment (principal and interest) will always stay the same (although your taxes and insurance may change)
- If you stay in your home for a long time, a fixed rate mortgage may be more affordable than an adjustable rate mortgage
Call ZABE Mortgage to learn more about fixed-rate mortgages.
With an adjustable rate mortgage, you get a lower interest rate for an initial time period (usually the first 1, 3, 5 or 7 years). After that, your interest rate will reset at the market rate. Most ARMs have caps that limit how high the interest rate can go. Make sure you will be able to afford your payment if your interest rate reaches that cap.
Call ZABE Mortgage to learn more about adjustable-rate mortgages.
Refinancing a Mortgage
The decision to refinance your mortgage depends on your financial situation. Some reasons include:
- Refinancing at a lower interest rate to lower your monthly payment.
- Obtaining a stable principal and interest payment by converting from an adjustable rate mortgage (ARM) to a fixed rate loan.
- Consolidating high interest debt (credit cards, student loans) by using the equity in your home to obtain cash.
Call ZABE Mortgage to learn more about how you may be able to benefit from refinancing.
ZABE Mortgage Group offers many types of refinancing loan programs. The type of loan you choose will depend on your reason for refinancing. Two common types of refinancing are:
- Cash Out. If you would like to obtain cash to have on hand for expenses or to pay down high-interest debt, ZABE Mortgage Group offers cash-out refinancing in the form of conventional, FHA and VA loans.
- Streamline. If you don’t need cash but you would like to obtain a lower interest rate to reduce your monthly payment, you may qualify for either FHA or VA Streamline Refinancing, which features less documentation and no appraisal.
FHA Loans
An FHA loan is insured by the Federal Housing Administration (FHA), an agency of the U.S. government.
Because one of the FHA’s goals is to help more people become homeowners, FHA-insured loans have smaller down payments and other benefits:
- Down payments as low as 3.5%
- Lower closing costs
- Easier credit qualifying
- You may be able to use money received as a gift toward your down payment
If you have a mortgage on your home right now, you may be able to refinance into an FHA loan and get cash to pay off high-interest debt (credit cards, student loans) or use for other expenses.
Find out more about FHA Cash Out Refinancing. Call ZABE Mortgage today or apply online.
The FHA Streamline Refinance program is for borrowers who have already have an FHA loan and would like to lower their monthly payments. Borrowers may not receive any cash from an FHA Streamline Refinance.
Find out more about FHA Streamline Refinancing. Call ZABE Mortgage today.
VA Loans
A VA loan is a mortgage that is guaranteed by the U.S. Department of Veterans Affairs (VA). The VA helps active military, veterans and eligible surviving spouses become homeowners by enabling VA-approved lenders to offer loans with these benefits:
- No down payment*
- No private mortgage insurance premium
- No pre-payment penalties
ZABE Mortgage is a VA-approved lender with more than 25 years of experience. Call ZABE Mortgage to learn more about VA loans.
If you have a VA loan on your home right now, you may be able to refinance and get cash to pay off high-interest debt, make home improvements or further your education, The VA will guarantee loans up to 100% of the value of your home.
Find out if you qualify for VA Cash Out Refinancing. Call ZABE Mortgage today.
If you have a VA loan and you are not looking to obtain cash from refinancing your mortgage, you may qualify for a VA Streamline Refinance. This type of VA loan can reduce your interest rate so you can lower your monthly payments and save you money over the life of your loan.
Find out if you qualify for VA Streamline Refinancing. Call ZABE Mortgage today.
The Mortgage Process
Here are some of the key steps in the mortgage process:
- Check your credit report and scores
- Get pre-qualified for a mortgage
- Apply for a mortgage
- Prepare for closing
- Attend closing
The mortgage process will be a bit different depending on whether you are purchasing a home or refinancing. For details, read about the home buying process or the refinancing process.
Call ZABE Mortgage or apply online to get pre-qualified.
ZABE Mortgage can get you pre-qualified to help you determine how much you can afford to pay on a mortgage. We’ll ask you questions about your income, debts and expenses.
While a pre-qualification estimate is not a guarantee to lend, it does help you set your price range, your budget, and how much you can put toward a down payment. Call ZABE Mortgage or apply online to get pre-qualified.
That depends on the type of loan you get and the interest rate you pay.
- You may be able to get a lower interest rate if you make a bigger down payment
- If you put at least 20% down, you may be able to avoid paying mortgage insurance
- FHA loans require as little as 3.5% down
- VA loans offer up to 100% financing for qualified veterans, active military and surviving spouses
You can start by making sure you have all the documents you need to bring to closing:
- Government-issued photo ID for borrower and co-borrower
- Cash necessary for closing costs (typically a cashier’s check; not a personal check)
- Binder for homeowners’ insurance (hazard insurance) and paid receipt
There will probably be other items as well. One of the biggest risks to closing on time is a change in a borrower’s financial circumstance. You may want to avoid opening a new credit card account, buying a car or making any other large purchase prior to closing.
Glossary
Amortization is when you gradually pay off your mortgage over the years by making regular payments.
- At the beginning, most of the monthly payment goes toward paying off interest
- As time goes on, more of the payment goes toward principal
- At the end of the loan term, all principal and interest is repaid
An Amortization Schedule of your loan shows you how much principal and interest you are paying each month on your loan.
Annual percentage rate (APR) tells you the full cost of borrowing money. It includes:
- Simple interest rate of the loan
- Points
- Add-on fees, such as closing costs
Because it includes fees and points, the APR is typically higher than the simple interest rate quoted on a loan.
A conventional loan is not guaranteed by the U.S. government as are FHA, VA and USDA loans.
- Conventional loans usually have lower interest rates than government-backed loans.
- Conventional loans typically require higher down payments, but they may also be processed faster because there is usually less paperwork than government-backed loans.
- Conventional loans are available as fixed rate or adjustable rate mortgages.
The United States Department of Agriculture (USDA) offers a Rural Development mortgage program to help low and moderate-income borrowers become homeowners or rehabilitate dwellings in eligible rural areas. The program is offered in all 50 states and Washington, D.C. There are eligibility requirements regarding income as well as property location. Visit www.usda.gov for details.
To learn more about USDA loans and other mortgages, call ZABE Mortgage.
A jumbo loan is a mortgage that is larger than the conforming loan limits published by the Federal Housing Finance Authority (FHFA). You will probably pay a higher interest rate on a jumbo loan. Also, jumbo loans typically require more than 20% down payment.
To learn more about loan options, call ZABE Mortgage.
Your debt-to-income (DTI) ratio is used to calculate how much mortgage you can afford. In general, lower your DTI, the easier it will be for you to pay your mortgage.
Here’s how to calculate your DTI:
- Add up all of your monthly debt payments, including rent or mortgage, credit cards, car loans, student loans, etc.
- Divide that number by your gross monthly income (earnings before taxes)
Your lender will calculate your DTI to help you choose an affordable mortgage. To learn more about loan options, call ZABE Mortgage.
Your mortgage interest rate is how much you pay each year to borrow money from your lender. It is a percentage of your loan amount.
Your mortgage rate is also referred to as the simple interest rate. That is different than the Annual Percentage Rate (APR), which includes points, lender fees and other charges that are part of the cost of your loan, as well as the simple interest rate.
Interest rates change daily. To learn more about loan options and interest rates, call ZABE Mortgage.
Points are interest charges that you pay up front when you get a mortgage. One point is equal to 1.00% of the total loan amount. Points are also called discount points or loan origination fees.
- You can pay points to get a lower interest rate
- Paying points can lower your monthly mortgage payment
*There may also be a tax benefit from buying points. Consult a tax professional and/or financial advisor to calculate the benefit that you would obtain from paying points.
To learn more about loan options and obtain an interest rate quote, call ZABE Mortgage.
A rate lock happens when a lender guarantees, in writing, to give you a specific interest rate as long as your loan closes in a certain time period (usually 30 or 60 days) and there are no major changes in your loan application.
Rate lock agreements usually spell out:
- Interest rate
- Points to be paid (if any)
- Rate lock period
A rate lock gives you peace of mind, especially when interest rates may be going up.
To learn more about loan options, call ZABE Mortgage.
