Q: HOW DO I GET STARTED BUYING A HOME?

A: The first step is to obtain a pre-approval from Capitol Financial Services. Next we will show you a simplified step-by-step guide to buying a home. Our pre-approval process and guidance has saved thousands of dollars for our customers in comparison to those proceeding without good advice. We will help you analyze your finances and identify a program that best fits your personal needs.

Q: HOW DO I GET A MORTGAGE?

A: The first step is to talk with one of our experienced loan officers to determine the best approach to obtain your loan. Your options include: apply on line, application by phone or a personal appointment. In all cases, you will complete an application and may need to provide employment and/or financial documentation.

Q: HOW MUCH OF A MORTGAGE CAN I AFFORD?

A: The amount of mortgage you can afford is determined by how much you earn vs. how much your minimum monthly payments are. Based on the type of mortgage that is right for you, there are ratio guidelines that analyze your expenses. These ratios range from 28-55%.

To determine what your ratios are you first need to determine your gross monthly income. Your monthly housing expense payment should not exceed 28% of this amount. Next, calculate your monthly debt load. This includes credit cards, loans, alimony, child support and any other ongoing monthly obligations. Add it all up and this is your monthly debt load. Your monthly housing expense and total monthly debt load should not exceed 36% of your gross monthly income. These calculations are general guidelines and we have many other programs available that allow your expenses to exceed these figures. This is where you may benefit by discussing your situation with one of our professionals to determine your ratios for accuracy as well as discussing the available programs which allow your monthly housing expense to exceed these examples.

Q: WHAT IS THE BEST MORTGAGE FOR ME?

A: The best mortgage is one you can afford for as long as you plan to remain in the home and save the most money. Affordability varies with the type of mortgage. The two most common are fixed and adjustable-rate mortgages (ARM).

A fixed-rate mortgage is constant for the length of the loan, usually 30 years. Shorter term mortgages may offer lower interest rates however higher payments will apply but less money paid out than a longer-term loan. Long term fixed-rates have a smaller monthly payment and are easier to budget.

ARM's initially come with rates lower than a fixed rate mortgage but periodically rise or fall, depending on economic factors. Its lower initial rate (which can be fixed for up to 10 years) can help you qualify for a larger loan. If you plan to move in a few years, this type of ARM is a great choice.

Q: WHEN SHOULD I REFINANCE?

A: Refinancing makes sense if:

• Rates have lowered since obtaining your original loan.
• You wish to use the equity that's built up in your home.
• You wish to shorten your mortgage payment period
• You have an adjustable rate and you want to convert it to a fixed rate.

An old myth was to only refinance if you could lower your interest rate by two percent. This myth no longer exists with the wide range of options now available through Capitol Financial Services. The focus needs to be on the needs of the customer. Interest rate is only one component of the entire transaction.

Q: WHAT WILL MY MORTGAGE PAYMENT BE?

A: The easiest way to instantly determine what your approximate payment will be each month is to click on our mortgage payment calculator.

A mortgage payment is comprised of principal and interest and can include property taxes and insurance premiums to be placed in escrow for later disbursement as they become due. The principal and interest portion is based on loan amount, interest rate, and loan term. Larger down payments decrease the loan amount and its payments. With a down payment of 20%, you can avoid private mortgage insurance (PMI) but still must pay property tax and homeowner's insurance. Lower rates and longer terms reduce monthly payments. Short-term loans allow you to pay off the loan sooner with less interest paid but with higher monthly payments.

Q: WHAT IS A SECOND MORTGAGE?

A: Also known as a home equity loan or home equity line of credit. It is used to take advantage of your equity rather than refinancing your current first mortgage or to bypass private mortgage insurance on your purchase. It couldn't be any easier. In fact it can be done as easily as over the phone and we can close in 1 business day depending on the type of loan you are looking for. An appraisal may not be required to determine the value and your credit need not be perfect. You may not necessarily need to document your income to verify your ability to pay both loans.

Q: HOW CAN I IMPROVE MY BAD CREDIT HISTORY?

A: Cleaning up your bad credit report - - whether it's the result of unpaid credit card balances, a home foreclosure or a bankruptcy filing - - is not an easy task, but it's possible. We can help you . For the best and fastest results, call us for information that your creditors don't want you to know. This information is valuable to help expedite the process.

Our second chance mortgages allow for prior or current credit problems because we know what we show you will help you get on track and improve your credit rating.

Q: WHAT OPTIONS EXIST FOR FIRST-TIME BUYERS?

A: First time homebuyer loans typically require less money down and good credit to buy a home. One of the most popular programs is the 0% down payment loan. This is ideal for those who are looking to minimize out of pocket expenses when buying their first home. If you qualify, there is also the benefit of rolling in up to 3% of your closing costs.

Other programs include FHA, VA and Community Home Buyer Programs. Before determining what program fits you best, we analyze your situation and show you which program is best suited for you.

Q: WHAT ARE POINTS?

A: Also referred as discount points. One point equals 1% of your mortgage and is an amount used to buy down your interest rate. This allows you to obtain an interest rate lower than market rates. Although extremely beneficial in the long term, it may be unwise on a refinance or if you intend to be in the home short term. We analyze the needs with every client to determine what is best suitable for their situation. Maximizing savings is our top priority.