Citizens State Bank- Frequently Asked Questions

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1.	How do I know how much house I can afford? Answer
2.	How do I know which type of mortgage is best for me? Answer
3.	What does my mortgage payment include? Answer
4.	How much cash will I need to purchase a home? Answer
5.	What do I need to know when comparing mortgage rates? Answer
6.	What are discount points? Answer

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. 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.

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 picture and how long you intend to keep your house. Citizens State Bank can help you evaluate your choices and help you make the most appropriate decision.

Q :	What does my mortgage payment include?
A :	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.

Q :	How much cash will I need to purchase a home?
A :	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

Q :	What do I need to know when comparing mortgage rates?
A :	Often times homeowners and potential home buyers will call Citizens State Bank to inquire about mortgage interest rates. It is important to remember that interest rates differ for each applicant depending on many factors. In order to accurately quote mortgage interest rates, a loan application is needed. By completing an application you are assured that the interest rate quoted is accurate and not simply an estimate.

Q :	What are discount points?
A :	A discount point, or more simply referred to as a point, is a way homeowners are able to reduce the interest rate on their mortgage loan. Paying points can lead to lower monthly payments and interest savings over the life of the loan. To break it down, one discount point is equal to one percent of the mortgage loan amount. If a person chooses to pay a point, the cost of the point, or points, will be added to the closing costs.