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, and the best way to select a loan product is by
talking to us.

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).

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. MPG Mortgage
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.