Which loan saves you money on your mortgage — ARM or Fixed? If you’re buying a house or considering refinancing, at some point you will wonder if an ARM would save you money on your mortgage. ARM or fixed — which one is best? That depends on three things: Where you think rates are going…
Do you want to save money on your mortgage? Of course you do. Buying a home is the biggest financial investment most people make. You don’t want to throw your hard earned money down the drain. But what happens when you search the internet for advice? You find dozens of articles that promise to tell…
This is one of the most common questions borrowers ask when they’re thinking about buying a home. What is the correct answer? There isn’t one answer — there are two answers. The first answer is: a lender can determine the maximum loan amount you can be approved for based on underwriting guidelines, your income and…
What does a mortgage really cost? Okay, you’ve found a company you like, and their rate seems competitive. Now you have to find out what the closing costs are. Is the company in line with the competition or do they charge hidden “junk” fees that will make their deal more expensive? So you ask for…
Should I lock in my rate? Borrowers ask this question all the time. And you should — you’ve spent a lot of time finding the best deal. If you don’t lock it in, the rate could change. Obviously, if you thought rates were going up, you should lock in the rate. And conversely, if you…
If you are shopping for a mortgage, and you’ve decided you want an ARM (adjustable rate mortgage), here are three things you must look at: Index Margin Caps Why is this information important? Because ARMs work like this: they have an initial period that’s fixed for 5, 7, or 10 years. After that initial fixed…
What is a debt-to-income ratio or “DTI”? Debt-to-income ratio or DTI is a ratio lenders use to determine if you qualify for a mortgage. What does the ratio consist of? DTI consists of a “front” ratio and “back” or “total” debt ratio. How is the front ratio calculated? Lenders calculate the front ratio by first…
Imagine your loan is an apple, on a conveyor belt, along with tons of other apples. And there’s a sorter who’s paid to pull out the bad ones — the wormy apples, the bruised ones, the ones that won’t sell. The good apples — the ones that are standard size, color, shape — they get…
Where’s my what? You just met with your loan officer. You’ve chosen a lender, locked in a rate. He asks, “Where are your docs?” You give him a blank look. “My what?” Your income and asset docs. Your lender can’t approve a loan without your help. You need to provide certain specific pieces of paper…
So you’ve applied for your mortgage, and you decided to float the rate initially because you think rates will come down. You call your loan officer every day to check on rates. He tells you a rate you like. It’s Wednesday at 3:00 pm. You tell him you’re going to think about it and get…