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. Gross Monthly Income Income before taxes, insurance, or other benefits are taken out of your paycheck. Index A number used to calculate the monthly interest rate for an Adjustable Rate Mortgage . An index is usually a nationally published financial figure such as the 1 Year T-Bill rate or the Cost of Funds Index. The lender will calculate the interest rate by adding their margin to the index.