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Terms and Definitions

1. Property Value is appraisal value defined by a appropriate licensed appraiser
2. Down Payment is money down payment of borrower to purchase the property
3. Loan Amount ($) is the amount after the down payment
4. Loan-to-value ratio (LTV) (%) is a percentage of the loan amount to the property value. It is a different between down payment and the property value. If the down payment is 10%; then the LTV is 90%
5. Interest Rate (%) is the rate that offered by the lender in the term of your mortgage payment
6. Term (moths) is the numbers of months or years. Here we use numbers of months with 360 for 30 yrs
7. Mortgage Payment ($):   is calculation of the interest rate, term of payment and the loan amount
8. Hazard Insurance ($) is insurance protection of the property in case of natural hazard... required by the lenders
9. Property Tax (%)
is defined by the government - different from county and state
10. MI (Mortgage Insurance) ($) is insurance to protect lender in the situation of loan default. It is different based on the LTV requires by lender if LTV is higher than 80%
11. HOA ($) Home Owner Association known as a month fees for property locates in community with joint common area such PUD, townhouse and condo complex, etc.
12. Total Housing Expenses ($)   is total payment of mortgage payment, home insurance, HOA, MI and property tax. This payment is measured as the front debt ratio for loan qualification
13. Other monthly debts: include all evolving debt payments such credit card and car payment
14. Total family's debt expense: added all housing expense and other debt payments.
15. Qualified Debt Ratio (%): The total housing expenses is used to calculate for loan qualification debt ratio which is different from lender to lender at 40% to 50% known as debt to income ratio (DTI).
16. Qualified Income:

is how much gross income to qualify a loan. Ex. If the lender uses 50% DTI and the debt payment is $4,000 per month; then required income is $8,000 per month


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Click here to Loan Estimator System


Click Here to get pre-approval letter.