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Frequently Asked Questions

Got questions? We got answers!

Frequently Asked Questions

Looking for answers to your home loan questions? You are in the right place. Browse our Frequently Asked Questions below to find answers that will help give you peace of mind, bring clarity and may help in your decision-making process.

  • How do I know what I can afford?

    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 may also be able to take advantage of special loan programs.

  • What is the difference between a Fixed-Rate Loan and an Adjustable-Rate Loan?

    With a fixed-rate mortgage, the interest rate stays the same throughout the life of the loan. With an adjustable-rate mortgage (ARM), the interest rate 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 are likely to 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.

  • How do I know which type of mortgage is best for me?

    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. Jersey Mortgage Company can help you evaluate your choices and assist you in making the most appropriate decision.

  • What does my mortgage payment include?

    For most homeowners, a monthly mortgage payment consists of three  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.
  • How much cash will I need to purchase a home?

    The amount of cash that is necessary depends on a number of items. Generally speaking, 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
  • What should I avoid doing during the mortgage process?
    • DON’T APPLY FOR NEW CREDIT OF ANY KIND - If you apply for a credit card, your credit report will be pulled, and this will have an adverse effect on your credit score. Co-signing a loan will also lower your credit score.
    • DON’T PAY OFF COLLECTIONS OR CHARGE-OFFS - Don’t pay off collections unless it is required by the lender to secure the loan.
    • DON’T CLOSE CREDIT CARD ACCOUNTS - If you close a credit card account, it can affect your ratio of debt to available credit. This ratio can hurt your credit score. Ask us for guidance and get more details about this issue.
    • DON’T MAX OUT OR OVERCHARGE CREDIT CARDS - Overcharging your credit cards can have a negative impact on your credit score. Once you are engaged in the loan process, try to keep your credit cards well below the available limit.
    • DON’T CONSOLIDATE DEBT TO ONE OR TWO CARDS - Changing your ratio of debt to available credit will complicate your loan process.
    • DON’T RAISE RED FLAGS TO THE UNDERWRITER - When applying for a loan, drastic measures such as changing your name, address, or occupation are discouraged. These are important underwriting considerations.
    • DON’T FALL BEHIND ON EXISTING ACCOUNTS - One 30-day late payment on any existing loan can negatively impact your credit score.
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