| Mortgage Lingo | Out of Pocket Costs | General Mortgage | Ture or False | True or False 2 |
|---|---|---|---|---|
|
DTI
Debt Ratio - How much income you make, compared to how much you spend?
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What is a Down Payment?
Your portion of the sale price
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What is the minium credit score to purchase a home?
620 - Although some banks will allow a 580 credit score.
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Mortgage Insurance is required if you put less than 20% down.
True
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You need a 20% down payment to purchase a home.
False - First-time homebuyers only require 3% - 3.5% and anytime after that it is 3.5% - 5%
|
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APR
Annual Percentage Rate - APR is a calculation of the Interest rate and certain costs over time
|
After signing your purchase and sales agreement, this service will be the first thing you do. It protects you by giving you information about the house and it is an upfront cost to you.
Home Inspection
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What is an Escrow Account?
Taxes and Insurance - This is an account that a mortgage company holds for you, they put in money they are budgeting for your taxes and insurance.
|
Your interest rate gets locked automatically at the pe-approval.
False - You cannot lock a rate until you go under contract to purchase a home
|
A VA (Veteran) loan is the only loan that does not require monthly mortgage insurance
True
|
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EMD
Earnest Money Deposit - Deposit you put down at the signing of purchase and sales.
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This out-of-pocket cost cannot be performed until you have seen and signed your loan disclosures?
Appraisal
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What is included in your mortgage payment?
Principle Interest, Taxes, Insurance, Mortgage Insurance
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Banks require a home inspection on every home purchase.
False - Banks do not require a home inspection
|
Your APR is also your interest rate, meaning it's what you pay your mortgage back at.
False - The money you borrow is paid back at your interest rate, your APR is a calculation of that rate and certain costs. Your APR is also a way for you to shop for mortgage companies.
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LTV
Loan to Value - The amount of the loan compared to the home's value. 80k loan vs 100k home value would be 80% LTV.
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What is the most forgotten out-of-pocket cost by first-time homebuyers?
Closing Costs
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Do banks charge fees to escrow your taxes and insurance?
NO
|
Having a fixed-rate mortgage. Your mortgage payment will change throughout your mortgage
False - Although this could be a trick question. principal & interest will never change but taxes & insurance could. So your payment could change if you are escorwing.
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You purchased your first home using an FHA loan, you want to buy a new home without selling your current home and you also want to use FHA this time. This is okay?
False - You are only allowed to have 1 FHA loan at a time. (Although, there are 2 exceptions to this rule)
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PITI
Principal, Interest, Taxes, and Insurance
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What are the 5 costs included in your closing cost?
Lender/Bank, Attorney, State, Escorws, First Years Home Owners
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If you purchase a condo, can you include your HOA Fee into your mortgage payment?
NO
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All mortgages have a no money down option. (Conventional, FHA, VA, USDA)
False - VA and USDA are the only mortgage programs that allow for no money down. Conventional and FHA will allow first-time homebuyers to can get help with down payment using down payment assistance but still require the down payment.
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Steven Hawes is the only loan officer who I would recommend people to use for a mortgage, only because he is fun, handsome, amazing at what he does, and always puts his clients first.
True
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