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1.	*How much will I be required to put down?* Answer
2.	*What does my mortgage payment include?* Answer
3.	*How do I know how much house I can afford?* Answer
4.	How do I know which type of mortgage is best for me? Answer
5.	*What is the difference between a fixed-rate loan and an adjustable-rate loan?* Answer
6.	*How is an index and margin used in an ARM?* Answer

Q :	*How much will I be required to put down?*
A :	In MOST cases a substancial down payment is best. For those with limited down payments the following are minimum. Earnest Money: The deposit that is supplied when you make an offer on the house to secure purchase intent. This money is paid to the Escrow company listed on your Purchase Contract. Down Payment: A percentage of the cost of the home that is due at settlement. FHA requires a 3% investment, Conventional requires a 5% investment based on the purchase price. These funds must be seasoned for 60 days prior to application. Closing Costs: Costs associated with the loan, deed, appraisal, impounds, and title transfer from one owner to another on a purchase transaction. Cost associated with the loan, appraisal, impounds and title clearance on a refinance transaction. (Most loan programs allow for the seller in a purchase transaction to pay a percentage of the buyers closing costs.) The average closing cost is 3% of the purchase price depending on loan amount.

Q :	*What does my mortgage payment include?*
A :	Principal: Repayment on the amount borrowed Interest: Payment to the lender for the amount borrowed Taxes & Insurance: Annual Tax and Hazard Insurance Premiums are collected into and Impound escrow account held by the lender to pay these annual liabilities on the subject property. These premuims are collected monthly. (This feature is optional for those borrowing 80% or less, in which case the borrower will be required to pay the County Tax Assessor and Hazard Insurance agent directly the full premium once a year.) Mortgage Insurance: Private mortgage insurance (PMI) is insurance written by a private company that protects the lender from losses in the event the borrower defaults on the mortgage. Borrowers are required to pay the premium for private mortgage insurance. Private mortgage insurance limits a lender's exposure to financial loss resulting from loan default. If you make a down payment of less than 20%, even if you have a good credit profile, lenders generally require mortgage insurance.

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 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. Give us a call, and we can help you determine exactly how much you can afford.

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 situation and long term goals. Community First Bank can help you evaluate your choices and help you make the most appropriate decision.

Q :	*What is the difference between a fixed-rate loan and an adjustable-rate 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 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. To discuss your mortgage options and find out which loan would best fit your needs contact one of our Loan specialists.

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).

Home Loan Rates

30 Yr Fixed

5.000% 5.164%

15Yr Fixed

4.500% 4.765%

FHA & USDA rates Available upon Request!

The above rates are quoted on a 30 day lock. The APR is calculated on a loan amount of $150,000 with a 1% loan fee and a $295.00 processing fee. Rates and fees are subject to change daily.