florida mortgage broker lenders considers your credit worthiness when choosing whether to extend a loan and how much of an interest rate you will pay. Your credit worthiness comes down to three things: your credit history, your income and the loan-to-value ratio.
Florida Credit history
Credit bureaus collect information about whether you pay your bills on time. They compile this information into a file called a credit report, and then boil all this down to a number between about 300 and 850. That number is your credit score, after Fair Isaac Corp., the company that pioneered credit scoring. Most lenders use the middle of the three scores. So for example if you had a 600, 620, and 640 score set… the lender would use the middle score or 620 in this example, as your qualifying score.
Income
florida fha loans want to know how much you make and how long you've been at your job, as well as how long you have been working in your particular field. They will look at your total debt-to-income ratio: How much of your monthly income goes toward paying the mortgage and other obligations, including the payments on the equity debt for which you are applying. Most lenders want to keep that ratio under 36 percent, but many programs such as FHA and non conventional loans will go to 55% or higher with compensating factors.
Be prepared to show your lender proofs of income and other earnings statements, or get ready to be turned down or pay a higher interest rate.
LTV
This is the ratio between what you owe on your house and what its worth. If your house is worth $100,000 and you still owe $80,000, your loan-to-value ratio is 80 percent, because $80,000 is 80 percent of $100,000. When you bought the house, calculating the LTV was straightforward: the mortgage amount divided by the home's price.
It's more complex when you get a home equity product, because the home's value probably has changed since you bought it. The lender will get an estimate of the home's current fair market value. Then it will add the current mortgage balance to the size of the equity loan or credit line that you want, and divide that by the home's current value. That results in the new Loan to value ratio ratio. Traditionally, equity lenders want to keep your total Loan to value ratio at 80 percent or less.
If you have been considering refinancing a home we urge you to call us or fill out our quick online application so that we can help you get qualified as quickly as possible. http://www.fivestarsmortgage.com
Sunday, June 7, 2009
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