Loan to value or LTV has to fall in a certain range for mortgage approval. You could have 800 credit scores but if your LTV is not there, you do not get approved. Because of falling home values, many people with great credit and income will not be able to refinance due to a high […]
Adjustment Period
An adjustment period is just one of the confusing aspects of a mortgage with an adjustable rate. And if you are confused do not feel bad. Most originators have trouble figuring it out too! Adjustment Period Definition On an adjustable rate mortgage (ARM), the adjustment period is the time allotted between interest rate recalculation. The […]
Amortization Schedule
An amortization schedule tells you how much of your monthly payment is going to pay down your principal and how much is going to pay the interest. This can be very eye opening. In the beginning of your mortgage, your payment is almost all interest with very little going toward paying down the balance. Towards […]
Annual Percentage Rate
What is the APR rate you find on your Truth in Lending disclosure and why is it different and higher than the mortgage rate you thought you were getting? This is very confusing to most people. Either you know about APR or annual percentage rate and are told it is a way to compare mortgage […]
ARM - Adjustable Rate Mortgage
An adjustable rate mortgage is one where the interest rate can change periodically. Many people do not think they have an ARM because of the initial fixed rate portion of the mortgage. But remember…if the rate can ever change..even once..it is an adjustable rate mortgage. Adjustable Rate Mortgage Definition Conventional ARM’s are typically 1 year […]
Automated Underwriting
Automated underwriting is performed on every mortgage these days whether you know it or not. It can be done upfront when you take the application or later when the mortgage is submitted to underwriting. Obviously, it is much better to know upfront instead of wondering if you are approved farther into the process. Automated Underwriting […]
Balloon Mortgage
A balloon mortgage is a mortgage that has a payment calculated over a long period like 30 years. However, the mortgage balance is due and payable before the 30 years are up. For example, a 15 year balloon mortgage would mean the payment is calculated or amortized over 30 years but at the 15 year […]
Biweekly Mortgage Payments
Bi-weekly mortgage payments are another way to pay extra principal and therefore pay down your principal faster. You can do this with a company or by yourself. Biweekly Mortgage A bi-weekly mortgage payment is when you break up your mortgage payment in half and pay it every two weeks instead of the whole payment just […]
BPO - Broker Price Opinion
A Broker Price Opinion or BPO is used to establish the value of a piece of real estate (ie. a house) quickly and inexpensively. The BPO is predominantly used during a foreclosure process when an offer of a short sale is in the making. Lender mitigation departments are dealing now with a ton of short […]
