Category Archives: Mortgages
What Types Of Mortgage Loans Are Available?
[wistia id=”6a8vjsy75d”] This video tells you about the most common types: Fixed Rate, ARM, Balloon and 2-Step. First, Fixed Rate Mortgages: Payments remain the same for the life of the loan generally 15 years or 30 years. Interest rates remain the same, so payments are predictable. A second common type is an Adjustable Rate… Read More »
What Is Loan To Value (LTV) And How Does It Affect The Size Of My Loan?
[wistia id=”zgqmn2vprw”] While this video simplifies things to help you remember, the loan to value ratio is the amount of money you borrow compared with the price or appraised value of the home you are purchasing. Each loan has a specific LTV limit. For example: With a 75% LTV loan on a home priced… Read More »
What Are Discount Points?
[wistia id=”9p583nlecz”] Discount points allow you to lower your interest rate. While this video simplifies things to help you remember, “points” are essentially prepaid interest with each point equaling 1% of the total loan amount. Generally, for each point paid on a 30-year mortgage the interest rate is reduced by 1/8 (or.125) of a… Read More »
What Is “Prime”?
[wistia id=”nhwmpn5j9z”] The Prime Lending Rate – sometimes just called “Prime” – is the interest rate that banks charge each other for overnight loans. Some consumer rates – like ARMs – are set in relation to Prime. In the US, Prime is affected by the Federal Reserve lending rate to banks; historically, Prime is… Read More »
What Is The Debt-To-Income Ratio (DTI)?
[wistia id=”gyk73op0hb”] Measuring your existing debts against your existing income is one part of a lender’s required assessment of your ability to repay a loan. Like the video says: debts are existing financial commitments; a car payment is a debt a grocery bill is not. To calculate your debt-to-income ratio add up your monthly… Read More »
What Does Ability To Repay Mean?
[wistia id=”r89k86hmou”] What are the “Ability to repay” rules about? In a nutshell, as this video shows, new laws require lenders to make a good-faith assessment of a borrower’s capacity to pay back their loan over time. It’s a longer-term view that goes beyond immediate income, debt and credit rating. These new Federal laws- supervised by… Read More »
What Is A Qualified Mortgage?
[wistia id=”niz2bduopn”] As this video explains, Federal laws put into effect in 2014 and supervised by the Consumer Financial Protection Bureau define lending practices and loan terms for a new category called “Qualified Mortgages.” They provide stable loan features for consumers and improve legal protection for lenders who follow the guidelines. These guidelines require lenders to assess each borrower’s… Read More »