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Q
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Why do interest rates change daily? |
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A
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Mortgages are pooled together into mortgage securities which act similiar to coporate and treasury bonds and any inflationary news translates into smaller values for fixed-rate securities and necessitates a rise in mortgage interest rates.
The simple answer is as the secondary market changes so can interest rates. Poor economic news translates into little or no inflation and lower mortgage interest rates. |
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Q
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How much are closing costs, and why do they vary? |
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Closing costs, according to the national average, are typically 4%-5% of the loan amount. However, there virtually hundreds of different mortgage loan programs available at the consumers' disposal. Some of those mortgage loan programs have little to no closing costs due from the borrower at closing. You should get a Good Faith Estimate as soon as you can from your lender. Furthermore, be aware that sometimes lenders do not put all the costs associated with a mortgage loan on the Good Faith Estimate. Be sure you do your homework and work with a mortgage professional you trust it will payoff in the long term. |
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Q
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What does L.T.V. mean? |
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L.T.V. is a acronymn for Loan To Value which is the percentage you get when you divide the amount of the loan, or the amount owed, by the market, or appraised value. For example: If you are refinancing your home and you owe $90,000.00 and your home appraises for $100,000.00 then you would have a current LTV of 90%. Furthermore, if you are purchasing a home selling for $100,000.00 and you borrow $90,000.00 then you are borrowing 90% of the value, or in this case the sales price. |
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Q
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What does P.I.T.I. mean in reference to my monthly payment? |
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PITI is an acronymn for explaining a mortgage payment which contains escrow payments. In other words the "P" stands for the "principle" of your mortgage payment. Next, the first "I" stands for the simple interest in your payment. Then, the "T" stands for your total property taxes divided by 12 months. Finally, the last "I" stands for insurance which is homeowners insurance, (sometimes referred to as hazard insurance), or a combination of homeowners insurance and mortgage insurance. |
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Q
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Does mortgage insurance payoff my mortgage if I die? |
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No. In fact it does absolutely nothing for you as the consumer. If you put less than a 20% down payment on the purchase of a new home you maybe required to carry mortgage insurance. Your monthly payment goes to pay for a mortgage insurance policy that protects the lender in case you default on your mortage. However, there are some programs, such as V.A. and Rural Development that do not require a 20% down payment nor do they require mortgage insurance. |
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If I have mortgage questions can I talk to a mortgage professional without any obligation? |
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Absolutely, we here at Delta Mortgage Group strive to educate any and all individuals as to how the mortgage process works. Please feel free to contact any of our licensed mortgage professionals with your questions. |
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