The first step in purchasing a home is to figure out how much you can afford. There are several useful and easy calculators on our website to assist you in figuring that out or go to Free Pre-qualification to see if you pre-qualify for a home loan.

To receive your pre-qualification letter, go to the Apply Now section of this web page. Here you will begin an application for your home loan. The application will ask you several questions about your loan scenario, pull your credit report, review possible loan programs, and provide a pre-qualification letter. It's that easy!

While not necessary, it is highly recommended that you get pre-qualification before making an offer. It can be frustrating for both the buyer and the seller to make an offer on a home, only to find out later you will not qualify for it. It is very advantageous to know what you can afford before shopping.

To receive your pre-qualification letter, go to the Apply Now section of this web page. Here you will begin an application for your home loan. The application will ask you several questions about your loan scenario, pull your credit report, review possible loan programs, and provide a pre-approval letter. It's that easy!

A pre-qualification occurs when a prospective buyer discloses, either verbally or by providing documentation of, their income, assets and credit so that a loan agent may determine the loan amount that a buyer could likely qualify for based on standard lending guidelines. A pre-approval involves an underwriter (the lender's risk evaluator) actually reviewing a prospective buyer's loan application with a formal credit determination occurring that is subject to an appraisal, title report and purchase contract, along with whatever supporting documentation the underwriter may request. Cathay Bank currently offers pre-qualification only.

Points, also called a "discount point", are a form of pre-paid interest. One point equals one percent of the loan amount. By charging a borrower points, a lender effectively increases the yield on the loan above the amount of the stated interest rate. Borrowers can offer to pay a lender points as a method to reduce the interest rate on the loan, thus obtaining a lower monthly payment in exchange for this up-front payment. For each point purchased, the loan rate is typically reduced by 1/8% (.125%).

Paying Points represent a calculated gamble on the part of the buyer. There will be a specific point in the timeline of the loan where the money spent to buy down the interest rate will be equal to the money saved by making reduced loan payments resulting from the lower interest rate on the loan.

Selling the property or refinancing prior to this break-even point will result in a net financial loss for the buyer, while keeping the loan for longer than this break-even point will result in a net financial savings for the buyer. The longer you keep the property financed under the loan with purchased points, the more the money spent on the points will pay off. If the intention is to buy and sell the property or refinance in a rapid fashion, buying points is actually going to end up costing more than just paying the loan at the higher interest rate.

Points may also be purchased to reduce the monthly payment for the purpose of qualifying for a loan. Loan qualification based on monthly income versus the monthly loan payment can sometimes only be achieved by reducing the monthly payment through the purchasing of points to buy down the interest rate, thereby reducing the monthly loan payment.

Discount points may be different from origination fee or broker fee. Discount points are always used to buy down the interest rates, while origination fees sometimes are fees the lender charges for the loan or sometimes just another name for buying down the interest rate. Origination fee and discount points are both items listed under lender-charges on the Closing Disclosure (CD).

The difference in savings over the life of the loan can make paying points a benefit to the borrower. If you intend to stay in your home for an extended period of time, it may be worthwhile to pay additional points in order to obtain a lower interest rate. Any significant changes in fees should be re-disclosed in the final Loan Estimate (LE).

Also directly related to points is the concept of the 'no closing cost loan'. If points are paid to acquire a loan, it is impossible at the same time for a broker bank or lender to make a premium for a higher rate. When premium is earned by making the note rate higher, this premium is sometimes used to pay the closing costs. Certain loan types will allow a gift from a relative for down payment and closing costs. Please consult with your mortgage loan originator for more information.

Real property in most jurisdictions is conveyed from the seller to the buyer through a real estate contract. The point in time at which the contract is actually executed and the title to the property is conveyed to the buyer is known as the "closing". During the closing process, you should expect to sit with a Settlement Agency in your area to review and sign the final documents, including the Deed of Trust, which will transfer ownership of the property to you.