A balloon mortgage can appear as an attractive, low-cost entry into homeownership, but it carries a unique set of financial risks that borrowers must ...
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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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When embarking on the significant journey of securing a mortgage, one of the first and most crucial decisions is choosing where to obtain your loan. T...
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The journey to homeownership is a monumental financial achievement, yet the initial mortgage payment and down payment are often just the beginning of ...
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The moment you receive the keys to your new home is a monumental achievement, but it also marks the beginning of a new financial chapter. The transiti...
Read MorePMI is generally required on conventional loans when your down payment is less than 20%. This means your Loan-to-Value (LTV) ratio is greater than 80%. It is not required for FHA loans, which have their own mortgage insurance premiums (MIP).
A credit score is a three-digit number, typically ranging from 300 to 850, that represents your creditworthiness based on your credit history. For a mortgage, it’s critically important because it directly influences:
Loan Approval: Lenders use it to gauge the risk of lending to you.
Interest Rate: A higher score almost always secures a lower interest rate, which can save you tens of thousands of dollars over the life of your loan.
Loan Terms: It can affect the down payment required and the type of mortgage you qualify for.
The best preparation is to have your key financial documents organized and be ready to discuss your financial goals openly. Before calls or meetings, write down any questions you have. Being prepared helps us have more productive conversations and move the process forward efficiently.
When you refinance your mortgage, your old loan is paid off and the existing escrow account is closed. The remaining balance in that account will be refunded to you, usually within 30-45 days after the payoff. When you sell your home, the escrow account is closed as part of the settlement process, and any remaining funds are returned to you after the sale is finalized.
Lenders look at your entire financial profile, which is often called the “Three C’s of Credit”: Credit (your score and report), Capacity (your debt-to-income ratio), and Capital (your assets and down payment). While your credit score is critical for determining your rate, a lender will also thoroughly examine your income, employment history, and existing debts to ensure you can afford the mortgage payment.
