Shopping for a mortgage means you’ll hear many terms and acronyms. Some make sense, like a down payment, and others, like PITI, may make your head spin.
Just what is PITI and how is it calculated?
You want to buy a home, but you’ve heard your debt ratio is too high. What does that mean and how can you fix it?
Lenders take a big risk lending you money to buy a home. They loan money for as long as 30 years, with the expectation that you’ll pay every penny back. What if you can’t? If you lose your job, fall ill, or have financial difficulties, you may fall behind or stop making your payments altogether.
Lenders must pay close attention to your debt ratio to prevent this from happening. While they can’t control what happens in your life, they can control who they lend money to, which is why getting out of debt is important.
COVID-19 has changed the way we do most things, including buying a house. Sellers are cautious about who they let in their house – reserving times for only serious buyers that already did the preliminary work of viewing the home.
So how can you find a home with little to no contact?
Try these tips.
It’s a debate many people have – should you pay off debt or save money? It’s kind of a case of what came first, the chicken or the egg because paying off debt is important, but so is saving money.
No one likes to stay in debt, but most people don’t like not having a savings account either. It’s a double-edged sword, but we’ve got a few words of advice, especially for those looking to buy a home or refinance.
Some changes to your home value you can’t help. If the market falls, it falls – there’s not much you can do. But, when the market is steady or even increasing, there are ways you can make sure your home keeps the same pace and appreciates like the other homes in the area.
Here’s how.
You’ve likely heard you need a 2-year job history to get a mortgage.
It’s true – but that’s not the whole story. You can get a mortgage if you don’t have a two-year job history. It’s not an automatic reason to decline a loan, so don’t give up until you know the truth.
Lenders want proof of your creditworthiness (good credit) and the ability to repay the loan (income). But many factors make up both situations; it’s not a one-size-fits-all approach.
Let’s look at some scenarios.
Did the pandemic wreak havoc on your credit score? You aren’t alone.
The good news is that credit scores are fluid. Just because your score fell now doesn’t mean it will stay there forever. With a few simple steps, you can bring your credit score back up where you need it.
You want to buy a home but the thought of paying Private Mortgage Insurance doesn’t thrill you. If you don’t have the 20 percent down payment, though, you don’t have much of a choice, unless you use the piggyback loan option.
Did you know there are more reasons to buy a home than just to call a place your own? Of course, that’s one of the largest reasons – who wouldn’t want to own their own home? But there are many other reasons you may want to consider it, whether you currently rent or are thinking of buying another property.
Building equity in your home is like getting a good return on your investment. Even if you don’t cash out the equity and use it while you still own the home, it’s nice to know it’s there should you need it. Some people rely on their home’s equity for an emergency fund and others use it to reinvest in their home, making home renovations.
If you didn’t make a large down payment, how can you build equity faster? Check out the top ways.
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