What is the low down on loan / value?
It is not often that a borrower takes seriously into consideration, what is your loan to value when shopping for a loan. In fact, if the subject by the client, especially in terms of avoiding the payment of a monthly mortgage insurance. But sometimes, a loan to value can make even more aspects of your loan – influence, such as pricing and licensing! P>
What is the value of the loan? Well, that’s exactly what it says. The loan amount compared to the value of the house you are buying or refinancing. are, for example, if you buy a home of $ 100,000 and the loan amount is only $ 50,000, your loan to value or LTV is 50%. It is also very common in refinancing a home at a lower LTV and mortgage insurance drop, that is still required to obtain it. P>
different types of loans have different minimum requirements for LTV. ¹ purchases, for example, an FHA loan as high as 75% LTV 97th (soon changed to 96. 5% in 2009). A conventional loan can be up to 97% LTV (but more often is 95% LTV). The VA loans and rural housing can be 100% LTV. People who have money to buy to put on the property and that they are dealing with a conventional loan financing is often to accumulate 20% of the purchase price to avoid mortgage insurance. Mortgage insurance is necessary, issue when it is your principal residence for an LTV above 80% and independent mortgage insurance or PMI and Genworth Financial. Fannie and Freddie, the biggest buyers of conventional loans, requires one of these or other authorized issue mortgage insurance if the loan has a 80% value. And if you refinance home where you live? The complete network of authorized changes LTV mostly, with few exceptions. And besides, if we’re talking about investment properties, is a can of worms. P>
But if someone else does LTV mean something? Consider a credit specialist, the prices of your loan. Often there are price differences based on the loan to value. For example, if you use your mortgage insurance and 85 LTV 01% or higher, may actually a better interest rate than if you had a 85% LTV (but not too excited because his monthly mortgage insurance will be higher.) Or if your LTV of 60% or less, you also can get a better interest rate. If you are close to tip the balance in any of these conditions, it can be to your advantage, ask your loan specialist, how close to an equilibrium price in one way or another. You may be surprised to discover that it could be your account, decide how much money is set to change on your loan. P>
guess what else do you know yet? A low loan to value, the difference between loan approval and denial of credit. Why is this so? Because if you invest enough money in their own capital in a property, you probably are not in the failure credit. And if you do this, it is probably a last resort. Not to mention the lender, the note does not lose money because there is enough equity in the property to foreclosure, resale costs and cover the depreciation of a market in the head. The lender is covered. Therefore, check the lender the loan is less risky and higher debt / income will be tolerated if they are rated with a high credit score. P>
E-mail your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, the question kristinmortgage @. com or call direct: (865) 567-0113 Toll free: 1-800-489-8910. For more information, visit their website at www. kristinmortgage. Com Home Loans Talk normal. P>