Many lenders will require a written explanation of any negative items on your credit report. If there is false information on your credit report, your credit reporting company will help you to clean it up. Ratios used in qualifying for a loan. Your Total DTI ratio is calculated by dividing your gross monthly income by all of your out going bills, including your new mortgage payment plus taxes and insurance. Your Mortgage DTI ratio only includes your mortgage payment and taxes and insurance.
Lenders charge discount points in order to raise their yield.
Discount points are charged for lowering the interest rate, to Buydown the rate, and for loans where the lender takes on extra risk. Discount points may be paid by the borrower or seller, or split between the two. Escrow Money that is collected by the lender and held in trust to assure payment for property taxes, MI fees, and other liabilities. Money is paid into the escrow account both at closing and with each mortgage payment. A federal disclosure that is required to be given to each mortgage applicant.