The journey to homeownership is often symbolized by the quest for the perfect mortgage rate, but the financial responsibility extends far beyond that ...
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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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The journey to homeownership culminates in two critical final steps: the final walkthrough and the review of the Closing Disclosure. While they occur ...
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Navigating the world of home financing begins with a fundamental understanding of mortgage types and terms. A mortgage is more than just a loan; it is...
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Private Mortgage Insurance, commonly referred to as PMI, is a crucial financial product that enables millions of Americans to achieve the dream of hom...
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For most homeowners, their monthly mortgage payment encompasses more than just the principal and interest on their loan. A significant portion often g...
Read MoreThe interest rate is the cost of borrowing the principal, while the APR includes the interest rate plus other fees and costs, giving you a more complete picture of the loan’s true annual cost. Always compare both.
Lenders use two key metrics to determine your borrowing capacity: your Debt-to-Income ratio (DTI) and your Loan-to-Value ratio (LTV). Your DTI compares your total monthly debt payments to your gross monthly income, and most lenders prefer a DTI below 43%. The LTV ratio compares the loan amount to the appraised value of the home.
Divide the total cost of the points by the amount of monthly payment savings. For example, if points cost $4,000 and save you $80 per month, your break-even point is 50 months ($4,000 / $80 = 50). If you plan to own the home longer than 50 months (about 4 years and 2 months), buying points could be beneficial.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs for eligible military service members, veterans, and surviving spouses.
Key Benefits:
$0 Down Payment: No down payment is required in most cases.
No Private Mortgage Insurance (PMI): Unlike FHA and low-down-payment conventional loans, VA loans do not require monthly PMI.
Competitive Interest Rates: Typically offer lower rates than conventional or FHA loans.
Flexible Credit Guidelines: Often more forgiving of past credit issues.
Technically, you can refinance as soon as you find a lender willing to work with you, and many have no waiting period. However, some government-backed loans (like FHA and VA streamline refinances) require a waiting period, often 210 days, and you must have made at least six monthly payments.
