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Q: What does LTV mean?
A: Loan to Value ratio, simply divide the loan amount by the property value.  It is used to determine risk and sometimes the rate. Most underwriting guidelines use LTV.

Q: What is a debt ratio?
A: It is obtained by dividing the monthly debts by the gross monthly income.  It is used to qualify borrowers on full doc and stated income programs.  The front ratio is the total house payment (P.I.T.I.) divided by gross income, the back ratio adds other installment or revolving debt to the P.I.T.I. then divides by the gross income.

Q: What is P.I.T.I.?
A: It is Principal, Interest, Taxes & Insurance( Homeowners) and Flood & Mortgage if needed.

Q: Why is mortgage insurance required on some loans?
A: In some cases when the LTV is higher than certain published guidelines, mortgage insurance may be required.  It protects the lender in the event of a default, it is NOT life or credit insurance.

Q: Is there an advantage refinancing conventional instead of FHA?
A: We think so, with FHA you have mortgage insurance regardless of the LTV until the loan is paid in full.  With conventional, it is not always needed.  When it is required, it is only until the loan balance reaches a certain LTV, improvements have been made, or the value has appreciated to a certain level in a certain number of years.  Then it may be possibly dropped*.

*Congress is currently considering laws regarding mortgage insurance, call the office for up to date answers.  Click for additional information.

Q: I am moving from out of state to your area and don't have a job yet.  I have plenty of money for a down payment, but I have been told that I can't get a loan without a job.  Can you help me?
A: Yes, with our no doc loan program.

Q: Can borrowers facing foreclosure get a new mortgage?
A: Yes, generally we can go to 65% LTV on foreclosures (70% LTV on an exception).  These usually are full doc loans requiring an acceptable credit explanation.  The loan must make sense, we will not put someone into a worse situation.  We have received approvals and closed these types of loans in the past.  We recommend that the borrower contact an attorney A.S.A.P. for legal advice and options.

Q: Why do I need a down payment?
A: This shows a lender that the borrower is serious about his obligation to repay the mortgage and that the borrower has a financial stake in the transaction too.  No one wants or plans to default, but the default rates on no or low down VA & FHA mortgages far exceeds conventional financing defaults requiring at least five percent down, just check the foreclosure notices in your local paper...    It is possible to buy a house with no money down...  Call our office for the details or see our No Money Down page.

Q: Is there a special purchase program for single parents?
A: We are not aware of any special programs for single parents, but all of our programs are available to all borrowers on an equal basis, check out our First Time Buyer Program.

Q: What is a balloon payment?
A: It is a payment in full of the remaining outstanding principal balance at a certain future date as specified in the Note.  As an example, if a borrower had a five year balloon payment on an original loan of $100,000 at "30 year fixed" current rates; the balloon payment would be about $94,375+-.

Q: What is full doc and stated income?
A: Full doc usually means  fully documented income and verification of assets, etc., stated income means that it is stated at time of application but the income is usually not verified.  The application does say that all information is true as stated...

Q: What is a "point"?
A: Typically  "points" are a one time charge to lower the rate (discount point).  A point is 1% of the loan amount.  On a $15,000 loan, it is $150.  On a $75,000 loan it is $750, on $100,000 it is $1,000, etc.  It is important to note that Origination Fees are sometimes also called points  (we consider the loan Origination Fee points)...  it is important to compare true points when shopping rate quotes, some mortgage companies play "The Origination Fee is not a really a point" game.  We have also seen Good Faith Estimates from other Mortgage Brokers showing a 5% Broker Fee that clearly pointed out that the fee was not "Points".  We disagree, we consider the Broker Fee points,  why else would Brokers be required to include it in the A.P.R. along with the Origination Fee, Discount Points and other lender or broker fees???   It really is a good idea for you to call Dave Pick and compare other offers...  410-310-8893 

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