Understanding Home Mortgage Loans
Understanding home mortgage loans and how they work can be confusing for a first-time home buyer. All one needs is a bit of planning and a good advisor helping you with all the mortgage loans basics and guidance necessary. At Mortgages Done Right Inc, our site will provide you with the basics you need to know and for more information please feel free to contact one of our agents.
Listed are some common vernacular one can run across when looking for a mortgage and will be able to help you understand the mortgage loan basics, how much you will be paying, how the repayment terms are calculated, and the importance of these factors in the approval process for mortgage loan.
- Debt-To-Income (DTI) Ratio - This is evaluated based on the measurement of the borrower’s income to the monthly credit & housing liabilities. Essentially, the lower one’s DTI ratio is the more confidence a lender has in giving that person a loan.
- Loan-to-Value (LTV) – This is the difference between the loan amount and the property’s actual value. This is done to see whether or not the buyer will have to or should purchase mortgage insurance in the case the loan is defaulted on.
- Credit Scores & History – Lenders use this information to check the credit-worthiness of the buyer; it helps them ascertain the amount of the estimated-risk if any the borrower has
- Property Types - The kind of property you want to buy and the manner in which you plan to occupy that residence is one of the key factors in securing a mortgage loan. This is important because certain loans are only applicable to certain types of properties, either condos, townhomes, or single-family homes.
- Mortgage Programs - Regardless of whether you are looking for 100%-financing, a rehab loan or a low down-payment, the qualifying guidelines for every mortgage program are different. There are conventional & jumbo loans as well as FHA, VA and USDA loans. The latter three loan programs are government backed loans.
When you are applying for a loan, the mortgage professional will help you in understanding mortgage loans and decide which programs match your goals & needs. For additional information about mortgage loans basics, call Mortgages Done Right experts at (561)449-2999.