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Frequently Asked Questions

HOA Hurdles to be Aware of When Looking at New Properties

by Jonas Kruckeberg March 28, 2010

A Home Owner Association (HOA) can have a huge impact on your life when you buy a home in a PUD (Planned Unit Development) or Condominium Project.
According to Wikipedia:
A homeowners’ association (abbrev. HOA) is an organization created by a real estate developer for the purpose of developing, managing and selling a development [...]

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How Are Mortgage Rates Determined?

by Jonas Kruckeberg March 28, 2010

Many people believe that interest rates are set by lenders, but the reality is that mortgage rates are largely determined by what is known as the Secondary Market.
The secondary market is comprised of investors who buy the loans made by banks, brokers, lenders, etc. and then either hold them for their earnings, or bundle them [...]

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Why Do I Need To Pay A VA Funding Fee?

by Jonas Kruckeberg March 28, 2010

The VA Funding Fee is an essential component of the VA home loan program, and is a requirement of any Veteran taking advantage of this zero down payment government loan program.
This fee ranges from 1.25% to 3.3% of the loan amount, depending upon the circumstances.
On a $150,000 loan that’s an additional $1,875 to almost $5,000 [...]

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Why Do I Need Mortgage Insurance?

by Jonas Kruckeberg March 28, 2010

Mortgage Insurance, sometimes referred to as Private Mortgage Insurance, is required by lenders on conventional home loans if the borrower is financing more than 80% Loan-To-Value.
According to Wikipedia:
Private Mortgage Insurance (PMI) is insurance payable to a lender or trustee for a pool of securities that may be required when taking out a [...]

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How Do I Calculate My Mortgage Payment Without Using A Mortgage Calculator?

by Jonas Kruckeberg March 28, 2010

Calculating an exact mortgage payment without a calculator on a loan is no small task, but there are some simple rules-of-thumb you can use to get a close estimate.
With the exception of the MIT Blackjack Team, performing this type of complex math in your head often leads to frustrating rants.
When coming up with a rough [...]

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Do I Have To Continue Making My Mortgage Payment If My Lender Goes Bankrupt?

by Jonas Kruckeberg March 28, 2010

When mortgage banks go out of business and are essentially taken over by the FDIC, homeowners are left wondering if they still need to make a monthly payment.
Great thought, and a very common questions for many borrowers in 2009 and 2010.
The short answer is YES, you still have to continue making mortgage payments if your [...]

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Is There A Rule-of-Thumb Regarding The Number Of Credit Lines To Have Open?

by Jonas Kruckeberg March 28, 2010

While the actual credit score has a big impact on a loan approval, it’s not the only component of the credit scenario that underwriters consider for a mortgage approval.
Since loan programs, individual lenders and mortgage insurance companies all have their own credit report restrictions, it’s difficult to define a standard Rule-of-Thumb to follow.
However, the number [...]

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What's The Difference Between A Single Family, Second Home and Investment Property?

by Jonas Kruckeberg March 28, 2010

When applying for a mortgage, a borrower’s “Occupancy Type” is a major factor in the amount of down payment required, loan program available and mortgage interest rate.
Whether you are purchasing, doing a rate/term refinance or taking equity out of your property through a cash out refinance, occupancy type is always considered by the [...]

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What's My Debt-to-Income (DTI) Ratio?

by Jonas Kruckeberg March 28, 2010

Debt-to-Income (DTI) is one of the many new mortgage related terms many First-Time Home Buyers will get use to hearing.
DTI is a component of the mortgage approval process that measures a borrower’s Gross Monthly Income compared to their credit payments and other monthly liabilities.
Debt-to-Income Ratios are designed to give guidance on acceptable levels [...]

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Calculating Loan-to-Value (LTV)

by Jonas Kruckeberg March 28, 2010

Understanding the definition of Loan-to-Value (LTV), and how it impacts a mortgage approval, will help you determine what type of loan amount and program you may qualify for.
Since the LTV Ratio is a major component of getting approved for a new mortgage, it’s a good idea to learn the simple math of calculating the amount [...]

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