How does an ARM (adjustable rate mortgage) work? Many ARMs are like the 5/1 ARM, where the rate is fixed for the first 5 years of the loan, and then adjusts every year thereafter for the balance of the loan term. There is another ARM product called the 5/5 ARM. This product has a...
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WHAT IF YOU CANNOT QUALIFY ON YOUR OWN?
Sometimes, you may not be able to qualify on your own. You may ask someone to sign with you to help you qualify. If so, the co-signer will have to complete a loan application and will have to qualify, too. Lenders will combine the incomes and debts of both borrowers and base the loan off...
DEBT-TO-INCOME RATIO: WHAT LENDERS LOOK FOR
Debt-to-Income ratio is a comparison of monthly debts to monthly income, this is a major factor lenders consider when underwriting a loan. Lenders like to see the ratio at or below 43%, but loans have been approved up to 50%. Example: Let’s say you are salaried and gross $4,000 per month; Lenders use your gross...
INTEREST ONLY JUMBO LOAN PRODUCTS
We offer many jumbo products, including primary residences, second homes, and investment properties, we can offer 5% down jumbo on primary residences. We also have an interest-only jumbo product available. The jumbo rates we are seeing are comparable to conforming rates. In the past when we would encourage borrowers to stay at the conforming loan...
APPRAISAL REPORT: AN OPINON OF VALUE
As you know, an appraisal provides an opinion of value of the property, but, did you also know the appraisal contains comments on the condition of the property? An appraiser will comment on the condition of the property based on what they see during their visit. They will not inspect the property like a property...
AGE QUALIFICATIONS FOR A MORTGAGE LOAN
Any adult, pursuant to that state’s laws, can apply for a for a mortgage loan. According to Fannie Mae, “borrowers who are natural persons and have reached the age at which the mortgage note can be enforced in the jurisdiction where the property is located” can apply; there is no maximum age limit for a...
ALWAYS OBTAIN A PAYOFF STATEMENT
If you have a loan and are looking to pay it off, make sure you obtain the payoff statement. The statement is a document provided by the lender which contains the final amount to be paid to release their lien. It contains the principal balance, interest up to the date of closing, penalties (if...
DEFINING PITIMI
The acronym PITIMI represents the components of the monthly mortgage payment. It is defined as follows: • P = Principal • I = Interest • T = Real estate taxes • I = Insurance • MI = Mortgage Insurance The principal is the amount paid against the borrowed funds per month. Interest is the...
HOW DO ADJUSTABLE RATE MORTGAGES WORK?
An Adjustable Rate Mortgage (ARM) is typically a mortgage that is fixed for a period of time, and then becomes adjustable. The typical ARMs are 3/1, 5/1, 7/1, and 10/1. The first number represents the time period the rate is fixed. The second number represents how often the rate changes. Example: A 3/1 ARM means...