Archive for the ‘Mortgage Basics’ Category

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How to Calculate Your Loan to Value Ratio

Saturday, March 15th, 2008

When you are applying for a refinance or to purchase a home the loan to value (LTV) is usually the first value a loan officer will compute. Most borrowers under estimate the ramifications loan to value LTV has on pricing and qualifying for a loan.

 

What you really need to know here is how to arrive at the loan to value ratio. It’s pretty simple. You take the expected loan amount and divide it by expected appraisal value.

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Types of Mortgage Companies and Their Business Models

Saturday, March 15th, 2008

In order for you to get your best deal on a mortgage, we have found that it helps to understand how each mortgage company operates. Once you understand the types of companies offering mortgages and how they earn a profit you can begin to negotiate with greater certainty. There are different business models for mortgage companies they can be simplified as:

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How Long will I be in this Loan?

Saturday, March 15th, 2008

Believe it or not, being able to answer this question correctly is the determining factor for how to get your best deal on your next mortgage.We have all heard about the no closing costs loans. I also believe that very few of us who have the ability to own a home believe that anything in this world is free.

 

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Know Your Goals Before Refinancing

Saturday, March 15th, 2008

 

It is very important to enter into a mortgage with a clear set of goals which contain the best possible scenario and the least attractive scenario you are willing to take. As simple as this sounds, many people begin the mortgage process with the plan “get me your best deal”. This rarely works in the borrowers favor.

 

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How to Calculate a Debt to Income Ratio

Saturday, March 15th, 2008

Figuring your debt to income ratio can be tricky. Most wage earners and salaried employees will breeze through this section, however if your commissioned or self employed you may want to pay close attention to this section. When underwriters figure your debt to income ratio (DTI) they will use the same methods from lender to lender as it pertains to conventional mortgages. Below are a few rules when making these calculations. For this exercise we highly suggest that you have a copy of you credit bureau in hand.

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