Frequently Asked Questions (FAQs)

As your trusted Michigan mortgage lender, we’ve provided answers to many of the questions you may have about the best home loan solution for you. If you don’t see your question here, give us a call and just ask us; we’re here to help and provide a personalized mortgage solution.




What is the difference between a fixed and adjustable-rate loan?


An index is an economic indicator that lenders use to set the interest rate for an ARM. With a fixed-rate home loan, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest varies in relation to an index. While monthly payments made with a fixed-rate mortgage are relatively stable, payments on an ARM fluctuate. There are advantages and disadvantages to each type of mortgage; let us help you decide which solution is right for you.



How is an index and margin used in an ARM?


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).



Which type of mortgage is best for me?


It depends on a number of factors, including your current financial picture and how long you intend to keep your house. Our mortgage lenders can help you evaluate your choices and help you make the most appropriate decision. We take the time to get to know you and your goals, and then we provide you with the best solutions from which to choose.



What does my mortgage payment include?


 For most homeowners, the monthly mortgage payment includes three separate parts:


Principal: Repayment on the amount borrowed

Interest: Payment to the lender for the amount borrowed

Taxes and Insurance: Monthly payments are normally made into a special escrow account for items like hazard insurance, property taxes and monthly mortgage insurance, if applicable. Otherwise, you pay the fees directly to the county tax assessor and property insurance company.



How much cash do I need to purchase a home?


It depends on a number of items, but here is what is typically needed:


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 home

Reserves: Monthly portion of taxes and insurance set aside to establish escrow accounts, if applicable

Learn how to save $250 on your closing costs.

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