What Is The Meaning Of LTV In Real Estate?

Your loan-to-value ratio is a figure (expressed in the form of a percentage) that measures the appraised value of a home that you want to buy against the loan amount that you’re seeking to borrow. It’s commonly used in real estate transactions by lenders to determine your eligibility for a loan.

In effect, your LTV compares the size of the loan that you’re hoping to get with the value of the home. Lenders use LTV to determine just how much risk they’re potentially taking on if they decide to lend to you – and to figure out which loans that you are eligible for based on the size of your down payment or amount of equity that you have in a home. Put simply: The lower your LTV, the less risky your mortgage will be perceived to be by prospective lenders. Having a low LTV can therefore improve the odds that you’ll be able to obtain a competitive home mortgage.

How Lenders Use Your LTV Ratio?

Before deciding whether or not to extend you a home mortgage loan or assist with refinancing, your lender will consider your LTV. In effect, having to meet lenders’ LTV requirements (which will differ based on individual lender) can impact your interest rates, the size of your down payment, and whether you’ll pay private mortgage insurance (PMI) or not. For purposes of clarity, the lower your LTV, the lower the risk in the eyes of the lender.

What Is A Good LTV Ratio For A Mortgage?

Generally, a good LTV to aim for is around 80% or lower. Managing to maintain these numbers can not only help improve the odds that you’ll be extended a preferred loan option that comes with better rates attached. It can also boost your chances of being able to avoid paying mortgage insurance – and potentially being able to save thousands of dollars in mortgage payments.

Do you need more information?, Message me or Schedule your call today:- CALENDAR LINK

#mortgage2022 #mortgageloans #mortgagebroker #mortgagerates #mortgagelender #CANMortgage #Mortgage #MortgageLender #FirstTimeHomeBuyer #homeloan #homefinance #Refinance #mortgagetips #RefinanceMortgage #realestate #mortgagetips #loanmortgage #financehome #emortgage #JointMortgage

How To Get A Mortgage When You’re A Self-Employed Home Buyer?

When you’re self-employed and you want to buy a home, you fill out the same mortgage application as everyone else. Mortgage lenders also consider the same things when you’re a self-employed borrower: your credit score, how much debt you have, your assets and your income.

So what’s different?

When you work for someone else, lenders go to your employer to verify the amount and history of that income, and how likely it is you’ll keep earning it. When you’re self-employed, you are required to provide the necessary documentation to verify that your income is stable.

What Are Mortgage Lenders Looking For?

You can expect lenders will want proof of the following things before considering you for a mortgage:

• Income stability
• The location and nature of your self-employment
• The financial strength of your business
• The ability of your business to generate sufficient income in the future

What Documents Do You Need To Provide?

To start the home buying process, you’ll need a history of uninterrupted self-employment income, usually for at least two years. Here are some examples of documents a lender might ask for.

Employment Verification

• A professional organization that can attest to your membership
• Any Province or business license that you hold
• Evidence of insurance for your business
• A Doing Business As (DBA)

Income Documentation

Have proof of steady, reliable income, and you’re one step closer to getting approved for a mortgage. Note that even if you make consistent money now, your past income will also influence your ability to get a loan. Your lender will ask for the following:

• Personal tax returns (T1 General, Notice of Assessments)
• Profit and loss statements, which would include T2’s
• Bank statements, which are monthly or quarterly documents that help your lender verify that you have sufficient funds to cover a down payment.

Do you need more information?, Message me or Schedule your call today:- CALENDAR LINK

#mortgage2022 #mortgageloans #mortgagebroker #mortgagerates #mortgagelender #CANMortgage #Mortgage #MortgageLender #FirstTimeHomeBuyer #homeloan #homefinance #Refinance #mortgagetips #RefinanceMortgage #realestate #mortgagetips #loanmortgage #financehome #emortgage #JointMortgage

What Is Amortization In Real Estate?

Amortization is a way to pay off debt in equal installments that include varying amounts of interest and principal payments over the life of the loan. An amortization schedule is a fixed table that shows how much of your monthly payment goes toward interest and principal each month for the full term of the loan.

Fully Amortized Loans

A fully amortized payment is one where, if you make every payment according to the original schedule on your term loan, your loan will be fully paid off by the end of the term.

Positive Amortization

Lenders typically require a borrower to repay part of the principal with each loan payment to reduce their repayment risk. This results in the loan balance decreasing with each payment. This is called positive amortization.

Negative Amortization

Negative amortization is when a borrower is making the required payments on a loan but the amount they owe continues to rise because the minimum payment doesn’t cover the cost of interest.

Understanding how amortization works can give you great insight to the mortgage type that will work best for you and your family.

Do you need more information?, Message me or Schedule your call today:- CALENDAR LINK

#mortgage2022 #mortgageloans #mortgagebroker #mortgagerates #mortgagelender #CANMortgage #Mortgage #MortgageLender #FirstTimeHomeBuyer #homeloan #homefinance #Refinance #mortgagetips #RefinanceMortgage #realestate #mortgagetips #loanmortgage #financehome #emortgage #JointMortgage

Types Of Assets To Include On Your Mortgage Application

When a lender goes over your home loan application, they’ll take a look at your credit score, total monthly debt and total monthly income as well as your overall net worth. Your net worth matters because it tells your lender how much money – between your income and assets – you really have.

1. Cash And Cash Equivalent Assets

Be sure to list all of your cash and cash equivalents on your mortgage application. These assets include any cash you have on hand, the money in all of your checking or savings accounts, money market accounts, certificates of deposit (CDs) and more.

2. Physical Assets

Physical assets include anything tangible that you own that’s valuable – anything that can be touched. Physical assets that can be sold for funds to be used to qualify for a mortgage include – but are not limited to – properties, homes, cars, boats, RVs, Jewellery and artwork.

3. Nonphysical Assets

Nonphysical assets aren’t as liquid – and they don’t have a physical presence like a house or car. Pensions, 401(k)s, IRAs, bonds, stocks and even royalties fall into this category.

4. Liquid Assets

Any nonphysical asset that you can instantly convert to cash would fall into this category, like readily tradable bonds or stocks.

5. Fixed Assets

There are some physical assets that may take longer to receive cash for, such as furniture, some real estate and antiques.

6. Equity Assets

If you have any retirement accounts, stocks or mutual funds, these are considered equity assets. Be sure to include these on your home loan application.

7. Fixed-Income Assets

Fixed-income assets include any investment funds that have been lent in exchange for interest. This typically includes government bonds and some securities.

Take the first step towards the right mortgage, Message me or Schedule your call today:- CALENDAR LINK

#mortgage2022 #mortgageloans #mortgagebroker #mortgagerates #mortgagelender #CANMortgage #Mortgage #MortgageLender #FirstTimeHomeBuyer #homeloan #homefinance #Refinance #mortgagetips #RefinanceMortgage #realestate #mortgagetips #loanmortgage #financehome #emortgage #JointMortgage

Joint Mortgage: What To Know About Applying For A Home Loan Jointly.

What Is A Joint Mortgage Loan?

A joint mortgage is shared by multiple parties, typically a home buyer and their friend, partner or family member. Some people apply for a parent-child joint mortgages with their adult children. A joint mortgage allows two or more parties to pool their financial resources and potentially qualify for a bigger or better loan than they could have on their own.

Unlike joint ownership, which sees two parties sharing the legal ownership of a property equally, a joint mortgage has nothing to do with whose name is on the deed. With a joint mortgage, two parties are simply both responsible for the loan – even though one of them may not have their name on the actual title and doesn’t technically own the property.

How Joint Mortgage Loans Work

When you buy a house with a joint mortgage, you share responsibility for the loan with another person. While joint mortgage applicants are often married, you don’t have to be married to the other party on your loan – you just both have to qualify and be over the age of 18. The factors used to decide whether you qualify for the loan are pretty much the same as if you were applying for a mortgage yourself; your lender will look at borrower credit scores, income, debt, employment history, etc. All parties that will be on the loan have to submit their own mortgage application.

If you’re approved, both you and the other party involved will sign a promissory note. You will both be equally responsible for making payments on the loan, though one of you can make the payments on behalf of the pair or group.

Whose Credit Score Is Used On A Joint Mortgage?

When you get a joint mortgage, your lender will look at the credit history and credit scores of all applicants that will be on the loan. Since everyone’s credit will impact the loan you qualify for, it can be detrimental if you or the person you’re applying with has a poor credit score.

Take the first step towards the right mortgage, Message me or Schedule your call today:- CALENDAR LINK

#mortgage2022 #mortgageloans #mortgagebroker #mortgagerates #mortgagelender #CANMortgage #Mortgage #MortgageLender #FirstTimeHomeBuyer #homeloan #homefinance #Refinance #mortgagetips #RefinanceMortgage #realestate #mortgagetips #loanmortgage #financehome #emortgage #JointMortgage

12 Critical Questions To Ask When Buying A House

There’s a lot to keep in mind when buying a house, and if you’re not an experienced home buyer, you probably don’t know everything that should go into your home buying decision.

1. What Is The Risk Of Natural Disaster?

2. Are There Health Or Safety Hazards?

3. How Old Is The Roof?

4. Are The Major Appliances In Good Condition?

5. What Is The Cost Of Utilities?

6. What’s Included In The Sale?

7. Have There Been Any Additions Or Renovations?

8. How Much Do Homes Sell For In The Area?

9. Why Is The Seller Leaving?

10. How Long Has The House Been On The Market?

11. What Is The Neighborhood Like?

12. Does The House Have A Reputation?

Take the first step towards the right mortgage, Message me or Schedule your call today:- CALENDAR LINK

#mortgage2022 #mortgageloans #mortgagebroker #mortgagerates #mortgagelender #CANMortgage #Mortgage #MortgageLender #FirstTimeHomeBuyer #homeloan #homefinance #Refinance #mortgagetips #RefinanceMortgage #realestate #mortgagetips #loanmortgage #financehome

In cases of mortgage fraud for profit, scammers most commonly promise victims to save their homes from foreclosure with term modifications and debt management, or to entice buyers with free services and reduced interest rates. Scammers prey on vulnerable homeowners and prospective homeowners who lack education or financial security.

How To Spot Mortgage Scams:

‘Too Good To Be True’ Interest Rates

Mortgage rates that are noticeably lower than market interest rates are typically a sign of various hidden fees or even a bait-and-switch tactic. Predatory lenders may try to tell you that you no longer qualify for the advertised rate, or tack on additional fees after locking in the original rate if they think they can get away with it.

Your Loan Estimate Isn’t Honored

Your Loan Estimate gives basic loan information in a standardized format from the U.S. Department of Housing and Urban Development. It includes itemized costs of a loan, including fees, and is sent within 3 business days of a mortgage application. Lenders aren’t allowed to charge fees outside of the credit report fee prior to accepting the terms.

Under the Real Estate Settlement Procedures Act (RESPA), mortgage lenders are required to honor the Loan Estimate within the relative tolerance level. If these estimates aren’t honored outside of changed circumstances, be wary of predatory lending.

Mortgage Payment Scams

A mortgage payment should remain under 28% of your monthly income. The higher your debt-to-income ratio (DTI), the riskier you are for a mortgage lender. If your lender is recommending a type of home that requires a loan larger than 28% of your disposable income, be wary.

Homes Overvalued

Overvalued property creates risk for legitimate mortgage lenders by generating an inaccurate resale valuation or an inflated borrower income that will be difficult to pay off with existing income.

Penalties For Prepayment

A prepayment penalty is charged for paying off your mortgage too quickly or for refinancing. While prepayment penalties can offer lower overall interest rates, oftentimes, they’re hidden in the fine print of agreements. As a result, many borrowers don’t realize the stipulations of the penalties and are hit down the line with fees. Generally, these penalties are included as a way for lenders to make money on interest payments at the expense of the borrower.

Your Credit Score Doesn’t Matter

Your credit score will always affect your mortgage rate, without exception. If you’re being offered a home loan that states this score won’t affect the mortgage, be wary. These tactics are typically schemes that prey on low-income borrowers and generally come with undesirable terms.

Take the first step towards the right mortgage, Message me or Schedule your call today: https://calendly.com/beatawojtalik/30min

#mortgage2022 #mortgageloans #mortgagebroker #mortgagerates #mortgagelender #CANMortgage #Mortgage #MortgageLender #FirstTimeHomeBuyer #homeloan #homefinance #Refinance #mortgagetips #RefinanceMortgage #realestate #mortgagetips #loanmortgage #financehome

What would you rather have: a Lamborghini or a rental home creating passive income for you?

Lambo = $4,546 per month (and that’s a USED one too!)
Home = $3500 per month (for a $758,874 home)

Run the numbers – it always makes more sense to hold an Appreciating Asset rather than a Depreciating Expense. 

When your money works for you, you don’t have to work as hard for your money.

To find out how much you qualify to buy in today’s market just send me a Email: beataw@dominionlending.ca

Source:
https://www.nerdwallet.com/mortgages/how-much-house-can-i-afford/calculate-affordability