Tag: Mortgage

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A mortgage is a loan that helps individual borrowers purchase a home or other real estate property. With a mortgage loan, lenders provide the funds needed for a borrower to purchase the property. The mortgage loan is secured by the property itself; if the borrower doesn’t make the payments, the lender is allowed to seize the house or property. Mortgage loans can also be used to refinance existing mortgages or to help buyers complete a home renovation or improvement project. Getting a mortgage is a big financial decision, and one should consider the terms, interest rate, repayment plans, and other factors before making a decision.

Income

Calculating Debt to Income Ratios for Mortgage Approvals

By Penny Grimes
September 4, 2023

5 min read

Debt to income ratio (DTI) is an important factor to consider when applying for a mortgage. It is calculated by dividing your total monthly debt payments by your gross monthly income. The lower your DTI, the more likely you will be able to get approved for a loan. Lenders prefer a low debt-to-income ratio because it ensures that a borrower can handle their monthly loan payments in addition to their other expenses. Borrowers with a high debt-to-income ratio may be viewed as too risky for a loan and may be turned down. It is important to maintain a healthy DTI to ensure you have a better chance of getting approved for a mortgage.

Income

Understanding Your Mortgage Debt to Income Ratio

By Penny Grimes
August 20, 2023

1 min read

Mortgage Debt-to-Income (DTI) Ratio Forex trading is an important factor when determining a borrower’s eligibility for a loan. Mortgage lenders use this ratio as a way to assess a borrower’s ability to make their mortgage payments, so it is important for any potential borrower to understand what their loan-to-value (LTV) ratio and mortgage DTI ratio are. The DTI ratio is calculated by dividing the total housing expenses of the borrower, including mortgage payments, into their pre-tax gross income. A higher DTI ratio could indicate that the borrower has more debt than income, making it difficult to repay the loan. As such, prospective borrowers need to ensure they have a healthy debt-to-income ratio before entering into a loan agreement.