Like many other fields and industries the mortgage world has it’s jargon. Unfortunately for you and unlike most other fields this one is important for you to understand. This may very well be the biggest decision you make in your life. With that being said, it’s of the utmost importance that you understand what some of this means. Here are some of the more used terms and acronyms.
This basically means you have “defaulted” on your loan. You have missed at least one payment. In this scenario it is extremely important you stay in contact with your current lender. Don’t hide from this.
DTI is the ratio of your income to the debts (all revolving and loan debt combined) you currently carry. There are a lot of factors here as some loans carry a debt-to-income ratio as high as 58% and some have a much smaller ratio. It is important you know these ratios when considering what loan program you choose versus your goals and other financial factors.
The amount of ownership stake you have in your home. It is the down payment and principal you have paid while in the home. This is effectively the investment you have made in your home.
LTV is the ratio of your home’s value to the size of the loan. Much like DTI each loan program carries a different LTV requirement or maximum. It is imperative to know what these requirement are and if they fit into your needs before moving forward on any one program.
PITI (Principal, Interest, Taxes and Home Owners Insurance)
PITI is the acronym for all of the costs added together to make your whole mortgage payment.
The prime rate is the interest rate charged by banks to the most credit worthy customers.
There are a lot more words and facts that you should know going in to this transaction. Click HERE for a list of more and do your homework before you get into this process, you’ll thank yourself later!
If you are ready to move forward and want to know what you qualify for, CLICK HERE and let’s start that discussion, go through all of your ratios and find a loan program that matches your wants and needs. There is a program out there that’s right for you but that does take work. There isn’t a one size fits all program, let’s talk today!