A rate lock is a contractual agreement between the lender and buyer. There are four components to a rate lock: loan program, interest rate, points, and the length of the lock.

On a fixed-rate loan, the interest rate doesn’t change over the life of the loan. An adjustable-rate mortgage (ARM) has an interest rate that is fixed for a set number of years and then afterwards will go up or down based on a market index such as the LIBOR. Consider factors such as the length of time you plan to stay in your home. Therefore, if you plan to stay in your home for many years, a fixed-rate may be the better choice for you. Otherwise, an adjustable-rate might be better if you plan to sell your home before the rate becomes variable, since initial ARM rates are typically lower than fixed-rate mortgages.

Contact us to get started with your mortgage pre-qualification. We’ll need some preliminary information from you, review it, and determine whether you might qualify for a mortgage loan. Once you get your mortgage pre-approval, you’ll know how much you could borrow and can look for a new home with confidence. Sellers and realtors will also feel more comfortable knowing that they have a serious buyer.

The interest rate is the cost to actually borrow the money disbursed in the loan. In addition to the interest, the APR (annual percentage rate) adds in some of the upfront costs of getting the loan, including points and lender fees.

You will need to know both personal and financial information. You will be asked detailed questions and will possibly need to provide employment history for two years, current income including pay, commissions or bonuses, alimony or child support that you would like to be considered, dividends, asset information, and personal information such as your Social Security number, birthday, current address, and address history for the past 2 years.

VA Loans, for qualified military families and veterans, have many benefits not offered by conventional loans. Typically, VA Loans usually have more competitive rates than conventional loans. VA Home Loans also give you the ability to refinance to a lower rate without having to re-qualify for the loan, a process known as a VA Streamline Refinance, or IRRRL.

No, at this time the VA does not guarantee HELOCS. The VA will allow you to cash out on your existing property with a cash-out refinance.

Here is a list of commonly needed documents that you will need to gather in order to start the loan process:

• Most recent two months bank statements for all checking and savings accounts listed on the applications (all pages)
  Most recent two months or quarterly statements for all stock, mutual funds, retirement accounts, bonds, etc (all pages)
• If you are selling a home, please provide a copy of the contract and we will also need to see a copy of the Closing Settlement Statement to show that it has been closed. We will need this also if you are using these funds for any part the downpayment or closing costs of the purchase of your new home.
• Please provide a copy of your drivers license (s)
• Please provide the most recent two years tax returns and W-2's (all pages and all schedules).
• If you are employed, please provide your most recent two paystubs showing Year To Date earnings and past two years W-2's
• If you are using alimony and/ or child support for qualification purposes, please provide a copy of your divorce decree (all pages).
• Name and telephone number of someone in your Human Resource department or of your office managerto verify employment and income.
• If receiving a gift for down payment and/ or closing costs, please provide a copy of the withdrawl slip from the donor, a copy of their bank statement, a copy of the check and a copy of the deposit ticket going into your account.
• If you are buying a second home or an investment property, please provide a copy of your mortgage statement to show that your taxes and insurance are escrowed. If not, please provide a copy of your tax bill and your insurance bill.
• If you are receiving pension, disability income, child support, alimony, or Social Security Income in order to qualify for your loan, please provide a letter from the respective agency to show the amount and duration.
• Please provide a copy of your current mortgage statement.
• Please provide a copy of your social security card.
• Please provide the name and telephone number of the managment company or landlord for your rental verification.
• Please provide the name, number and a copy of the declaration page for your home owner's insurance (if refinancing)
• Please provide a copy of your Prior Owner's Policy (if refinancing)
• Please provide a copy of your survey (if refinancing)

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).

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.

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. Cornerstone Lending Group can help you evaluate your choices and help you make the most appropriate decision.

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.

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

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.