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Learning greater details about a borrower’s Mortgage Number

Learning greater details about a borrower’s Mortgage Number

    Once a buyer starts learning about their Mortgage Number, they want to know more. The more the consumer knows about their financial picture the more informed they are about their potential home-buying power.   At the Mortgage Number website, there is a very important percentage number under the “Detail” tab on the Result page. It is found just to the right of the ‘Total payment’ (this information is found towards the bottom of the results page, the percentage of 35.2 in the above image). That percent represents the potential buyer debt to income ratio (known by the lender as “DTI”). The lower the percentage, the stronger the candidate. If the number is beyond 40% (in most cases) that would put buyer into the Gray on the Mortgage Number dial, which signals more risk for the lender. Lenders don’t like risk. The result page was designed to allow the consumer to reevaluate their buying potential. Only the buyer can eliminate some debt (pay-off or pay-down a credit card or pay-down their student loan); or the buyer can put more money down on the home purchase to lower the payment or maybe the buyer can anticipate a potential pay raise at their job. Additionally, as the mortgage industry is experiencing right now, a very low interest rate can improve the financial picture when buying a home. Anyone of these (or all of these!) can greatly increase the buyer’s Mortgage Number and move them from “Red” or “Gray” to the most favorable result, “Green.”   Now, the potential buyer can move to the “Advanced tab” which provides the opportunity to utilize a drop-down menu to calculate what the property taxes are for the state where the home is located. The consumer can also adjust the figure for the monthly insurance cost. The additional field allows any other miscellaneous costs like a neighborhood maintenance fees or a Home Owners Association (HOA) fee that can be added. Now, if the potential buyer intends to put down less than 20% Mortgage Number allows the user to turn on the private mortgage insurance (PMI) switch in the Advanced tab. This is defaulted to be “off” because a lot of lenders will bake that number into the interest rate so Mortgage Number keeps it simple. But the consumer can play with the scenario either way by turning it on or leaving it off to get a more precise outcome.   Something else that appears under the Advanced tab is ‘Disposable income.’ This can be quite revealing to see how much money the buyer has left over after the PITI (which stands for principal, interest, taxes and insurance payment) and the monthly debt payment. It simply takes the PITI total + debt and adds up what the federal and state income taxes are and subtracts it from how much money the potential buyer makes. Once that is calculated, the amount left over is broken down on an annual, monthly and daily basis for the consumer to see. The objective with the Mortgage Number site is to bring transparency and understanding of mortgage prequalification so a potential buyer is confident to move forward with whatever the next step may be… buy now… save more… buy later.

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