Sarasota Mortgage Rates | The Mortgage Skinny

Many people these days are looking to purchase too much home for what they can afford. Buying a home for $400,000 when your house hold income is only $30,000 does not make sense and it has to do what’s called your debt to income ratio. Most people do not qualify for their dream home because of this. How does the debt-to-income ratio work?

The debt-to-income ratio indicates how high your debt is as compared to your income. The higher the ratio, the higher a credit risk you are. The ratio is a calculation of your total monthly debt payments divided by your monthly gross income.

Example:
Total debt payments = $600
Total monthly income = $3000
Debt to income ratio = 20% (600 / 3000)

The acceptable debt-to-income ratios and calculations vary slightly among lenders (some include the sought-for mortgage in their debt payment totals.) However, even if your debt load is high, an excellent credit history (or credit score) can make it possible to qualify for a mortgage loan. Read the rest of this entry »

If you're new here, you may want to subscribe by Email. Knowledge is Power!

No Comments Yet »

What kind of insurance do I need?
Obtaining the appropriate insurance for your home can bring peace of mind.  Some insurance decisions must be made prior to the loan closing.  Certain types of insurance are often required by the lender and will be included in the closing costs; other insurance is optional to the buyer.  Typically, property related insurance payments are managed through the escrow account.  There are three main types of insurance plans to consider when you purchase a home. 

Title insurance provides a protection from uncovered claims against the title of the property you are acquiring. Private mortgage insurance (PMI) protects the lender against default. Homeowners insurance packages several types of coverage aimed to protect you from damage or loss to your home.

Title Insurance
Title insurance provides protection from financial loss due to claims made against the title of the property including legal defense of the title against those claims.  This insurance is usually provided after a title search is done to uncover any interests or liens on the property, in order to clear the title of any claims against it.  This type of insurance provides protection against past defects, not future faults. The last thing you want is to have purchased a home and then find out their is an existing lien from a third party. Read the rest of this entry »

1 Comment »

If you’re a homeowner and you’re looking for the right time to refinance then I hope this article will help you in making that decision. Homeowners consider refinancing in order to gain some benefit, generally lower payments, lower interest or an increase of cash to meet some current need such as necessary home improvements. In order to decide when it is appropriate to refinance, a homeowner should evaluate the possible benefits and concerns.

Depending on the circumstances there are a variety of possible benefits, including:

Lower monthly payments
Often, when you have enough equity, you may refinance without any additional down payment and still lower your monthly payments. Also, refinancing under a different loan structure may result in reduced monthly payments.

Lower interest rates
Refinancing offers a number of options for lowering your interest rates:

• Market interest rates may be generally lower inviting refinancing options before they rise again and the opportunity for locking in a low interest rate is gone
• A special low-interest loan plan may be available
• Your equity may be sufficient to allow for a restructuring of the interest plan (such as converting from an ARM to a low fixed rate mortgage)
• Conversion of high-interest-rate debt (such as credit card debt) to low-interest-rate mortgage debt
• Pay-down of a mortgage, providing options for better terms and less interest Read the rest of this entry »

  1 Comment »

Are you in the preliminary stages of getting a home and thinking about getting a mortgage loan? The task of getting a mortgage loan can be rather difficult or easy if you are not prepared for what is to come.  It is helpful to see an overview of the process.  A Mortgage Planner can be useful in guiding you through this process, even before the search for a house begins.  The mortgage planner takes you through the four basic phases from the preliminary decisions through the final loan funding.  Let’s take a closer look at these steps:

Preliminary decisions
First step is making the appointment whether it be over the phone or in person with a trusted and qualified Mortgage Planner. The loan officer will help guide you down the right path in determining the type of loan that will benefit you most.  Based on factors such as your overall short and long term goals, employment history, income and debts, and credit history, they can decide the general amount that a lender would loan you and how large of a payment you would be comfortable in making.  They will also consider the best terms available and the legal ramifications of ownership.

Pre-Qualification      
Next, the Mortgage Planner will gather and review the necessary information (such as residence and employment history, assets, etc.) and run a credit score in order to give you a Pre-Qualification Letter.  This letter is perfect in presenting to the seller becfause it tells the seller that you are a viable buyer.  Read the rest of this entry »

No Comments Yet »

Are you interested in trying to improve your credit scores so that you can get a better interest rate on your mortgage?  In this article I’ll show you how to go from that sub prime loan with prepayment penalties and high interest rates to an A-paper loan with low closing costs and low interest rates.  Consumers interested in purchasing or refinancing a home will pay an interest rate based on current market conditions and their ability to pay back the loan. The borrower’s income and debt ratios are taken into consideration by the lender, as well as the predictability factor provided by credit scoring. It’s important to have a mortgage professional in your corner that has a keen eye for solutions to improving credit scores in an effort to get the best interest rate possible.

Interest rates associated with various loan programs are broken down into schedules based on credit score ratings. While each lender has its own guidelines, it’s safe to assume that as the consumer’s credit score goes down, interest rates will go up.

A borrower with an outstanding credit rating will get what is called an A-paper loan. This type of borrower is rewarded with a lower interest rate because they have a proven track record of using credit sensibly and paying their bills on time.

Loans designed for consumers with less-than-perfect credit – sometimes referred to as “sub-prime” – can range anywhere from A-minus, B-paper, C-paper or D-paper loans. Read the rest of this entry »

1 Comment »

The Fed Chairman Bernanke delivered the Federal Reserve’s semiannual report on monetary policy to both the House and Senate Banking Committees yesterday. What was the outcome you ask? How does this affect me and why am I even reading this ever so boring post about what some chairman has to say?

Well I’m so glad you asked! The report given is one of the most important speeches for the Charmain. The areas addressed usually have to do with the overall state of the US economy, recent developments, economic fundamentals, foreign developments, economic outlook, ranges for growth, and concluding remarks. Wow that’s a mouth full!

Bernankes testimony indicated inflationary pressures were decreasing and economic growth was improving with an easing of the housing slump. Mortgage interest rates bounced favorably to Bernanke’s remarks before Congress in which he indicated, “So far, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing of core inflation.” This makes it possible for mortgage interest rates to remain low for the time being. Read the rest of this entry »

1 Comment »