Question 1

How much house can I afford?

Accepted Answer

It is recommended to spend no more than 1/4 of your take home pay on housing (1/3 for high cost of living areas). Don't forget that includes house maintenance and upkeep. With low interest rates around 3%, you can borrow about 15X your annual housing budget for a 30 year mortgage. Using the 15X multiplier and 1/4-1/3 your income, you should borrow at a Maximum 3.75X-5X your income, depending on the COL of your area.

Question 2

How to get a mortgage or prequalified?

Accepted Answer

While getting a mortgage can seem like a daunting task, it is a completely normal process that several million households go through each year. In order to get a mortgage, you must first get prequalified for a loan. Prequalified just means that a lender has evaluated your income and credit history and judges you to be suitable to qualify for a home loan. Generally, prequalification standards are the same across different lenders so it is important that you get prequalified with a lender that is known having competitive and low rates. One easy way to find the most competitive lenders is to use MortgageHog.com's rate search tool which will give a detailed breakdown of lenders mortgage rates, fees, and products offered. Get started today, by going to the home page.

Question 3

How do I compare current mortgage rates?

Accepted Answer

Comparing mortgage rates, comes down two things - the interest rate of the loan and lender fees. To help make an apples to apples comparison, lenders use APR (Annual Percentage Rate) which combines fees to originate a loan as well as your annual interest rate. The lower the APR, the better the loan. In order to get the lowest APR, it is best to see rates from multiple lenders. That is where MortgageHog.com comes in. MortgageHog has the largest inventory of national and regional lenders to instantly give you the lowest rates to start your mortgage search.

Question 4

What is a mortgage?

Accepted Answer

A Mortgage is just a fancy name for a bank loan given for the purpose of purchasing a home. Mortgages have some unique properties where the monthly payment is fixed and the loan slowly pays down over the life of the loan. Typically, mortgage loans consist of a term (how long the loan payment lasts) for 15 or 30 years - Though most people end up staying in their loans for an average of 7-8 years.

Question 5

How much is PMI (private mortgage insurance)?

Accepted Answer

PMI is a monthly payment to cover losses to a mortgage lender in the event a borrower defaults on a mortgage loan. Typically, primary mortgage insurance is paid by the borrower and is a part of their monthly mortgage payment. PMI goes down the larger your down payment is and the higher your credit score is. For Conventional loans, PMI will actually go away if your down payment is over 20%. Typically, PMI can vary between 1/8% - 1%, depending on your credit. PMI can vary across lenders so its an important piece of information to not forget about, even when utilizing the rate search tool on the MortgageHog.com home page.

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