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…
Ever heard of sticker shock? It’s when you’re shocked or surprised by an increase in an item’s price. It happens with cars, it happens with houses, and it happens with mortgages. What causes sticker shock with a mortgage? Sticker shock with a mortgage happens when you apply for a loan, don’t lock in the rate,…
A “float down” is an option a lender might offer you, and it works like this: you apply, lock in your rate, but you still want to be able to get a lower rate if rates go down. There are a variety of float downs available. Some say that if you lock in your rate…
Sounds too good to be true, doesn’t it? But at Amerifund, it’s real. A no closing cost loan. No closing costs – zero – zip – nada. How do you get one? Just ask any Amerifund loan officer. First, let’s be very clear – these loans are usually (not always) at a higher…
LTV stands for loan-to-value. It is simply your loan amount divided by the lower of the purchase price or appraised value. How to Calculate LTV on a Purchase Let’s say you are buying a house. You negotiated a sales price of $500,000. You are putting down 10%, so you will be borrowing 90% of the…