The down payment stands as one of the most significant initial hurdles in the journey to homeownership. While the allure of a 20% down payment is ofte...
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Before you embark on the journey of applying for a mortgage, there is one crucial number you must know: your debt-to-income ratio, or DTI. This single...
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A cash-out refinance is a powerful financial tool that allows homeowners to access the wealth they have built in their property. Unlike a traditional ...
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The journey to homeownership is filled with critical decisions, and one of the most fundamental is choosing between a fixed-rate mortgage and an adjus...
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Embarking on the journey to homeownership is an exciting venture, but it can also feel overwhelming. Amidst the excitement of browsing online listings...
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Embarking on the journey to secure a mortgage is a significant financial undertaking, and the lender you choose becomes a critical partner in the proc...
Read MoreWhile requirements can vary, a general guideline is: ≤ 36% DTI: Excellent. You are in a strong financial position. 36% - 43% DTI: Acceptable to many lenders, though you may need to meet other compensating factors. 43% - 50% DTI: This is often the maximum limit for Qualified Mortgages, and approval may be more challenging. > 50% DTI: It can be very difficult to get approved, as it indicates a high debt burden.
Yes, beyond the principal and interest, a mortgage includes other costs that contribute to your overall financial obligation. These can include closing costs, property taxes, homeowner’s insurance, and potentially PMI or HOA fees. These are ongoing expenses that add to your total cost of homeownership.
The absolute minimum depends on the loan program:
Conventional Loan: Typically 620
FHA Loan: 500 (with 10% down) or 580 (with 3.5% down)
VA Loan: Varies by lender, but often 620
USDA Loan: Varies by lender, but often 640
It’s important to note that these are minimums, and a higher score will always secure better terms.
Making extra mortgage payments directly reduces the principal balance of your loan faster. This significantly decreases your overall debt load by reducing the total interest you will pay over the life of the loan and shortens the time it takes to become debt-free on your home.
Absolutely. This is often where brokers provide significant value. They have access to specialist lenders who are more flexible with their lending criteria for self-employed individuals, those with irregular income, or people with a less-than-perfect credit history. They know which lenders to approach and how to best present your application.
