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What Part of “Thou Shalt Not” Don’t You Understand?

February 9, 2014 Leave a comment

THE TEN COMMANDMENTS When applying for a Real Estate Loan

  

•·       Thou shalt not change jobs, become self-employed or quit your job.

•·       Thou shalt not buy a car, truck or van (or you may be living in it)!

•·       Thou shalt not use charge cards excessively or let your accounts fall behind.

•·       Thou shalt not spend money you have set aside for closing.

•·       Thou shalt not omit debts or liabilities from you loan application.

•·       Thou shalt not buy furniture.

•·       Thou shalt not originate any inquiries into your credit.

•·       Thou shalt not make large deposits without first checking with your loan officer.

•·       Thou shalt not change bank accounts

•·       Thou shalt not co-sign a loan for anyone.

  

 

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What does PITI stand for?

September 2, 2010 Leave a comment

Principal, Interest, Taxes, & Insurance

 

 

Consider PITI when determining how much house you can afford.  Most online calculators only calculate P&I which can mislead some buyers into thinking they can manage to pay for more home than they can actually afford.   Below is PITI  defined:

Principal-The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage.

Interest- The interest charged on a loan used to purchase a residence. (Not the same as MIP or PMI which protects the lender in case of default)  

Taxes- Local tax assessed on property owned. Usually federal income tax-deductible.

Insurance– An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents. Hazard Insurance- coverage that in the event of physical damage to a property from fire, wind, vandalism, or other hazards. Liability Insurance– coverage that offers protection against claims alleging that a property owner’s negligence or inappropriate action resulted in bodily injury or property damage to another party.)

PITI reserves

A cash amount that a borrower must have on hand after making a down payment and paying all closing costs for the purchase of a home. The principal, interest, taxes, and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.

If you are considering buying a home don’t forget to consider Taxes & Insurance into your monthly budget!

The 10 “Thou Shalt Nots” When Applying for a Real Estate Loan

February 10, 2010 Leave a comment

  Thou Shalt Not

•·       Thou shalt not change jobs, become self-employed or quit your job.

•·       Thou shalt not co-sign a loan for anyone

•·       Thou shalt not use charge cards excessively or let your accounts fall behind.

•·       Thou shalt not spend money you have set aside for closing.

•·       Thou shalt not omit debts or liabilities from you loan application.

•·       Thou shalt not buy furniture.

•·       Thou shalt not originate any inquiries into your credit.

•·       Thou shalt not make large deposits without first checking with your loan officer.

•·       Thou shalt not change bank accounts

•·       Thou shalt not buy a car, truck or van (or you may be living in it)!  

Depending on your credit score, a one point drop could be the difference on whether you get final approval.  Your mortgage company will run your credit again just before closing to make sure there are no changes which negatively affect your score.  Just because you were pre-approved, doesn’t mean you can’t get UN-approved!