Debt ratios are utilized by lenders during the loan approval process. It’s an important piece, just one of several. Other factors such as credit, employment and assets are also pieces of the approval puzzle. Debt ratios on the other hand are the primary tool to determine affordability. Today, most loan programs set the guidelines for […]
Lenders today have multiple rules they must follow in order to be in compliance with federal and state regulations. One of those regulations can be found in the “Ability to Repay,” or ATR rule issued by the Consumer Financial Protection Bureau, or CFPB, back in 2014. Affordability was inserted after regulators discovered more and more […]
Mortgage lenders want to make sure applicants can afford a new mortgage payment, and this means looking at your current revolving debt and installment debt. This mortgage payment includes not just the principal and interest amount toward the outstanding balance but also includes a monthly amount for property taxes, homeowner’s insurance and mortgage insurance when […]
More and more students as well as parents are resorting to loans to pay for college. Public universities have had the ability to set their own tuition rates for years now and for many, attending college means going into debt just for the privilege. And that’s just the tuition, never mind the multitude of fees […]
Some recent good news came out recently that took effect last July. Fannie Mae, the largest purchaser of residential home loans announced their new policy addressing debt-to-income ratios. Now, the new debt ratio guideline tops out at 50, up from 45. Debt-to-Income Ratios Explained To interpret those numbers, a debt-to-income ratio, or debt ratio, compares […]
If you’re looking to buy your first home, but still paying off student debt get ready for some good news. It’s expensive to go to college. Ask any parent with a kid in school or college student and you’ll find out just how expensive it can be, even for a public college. That means student […]
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