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Conforming Loan Single-family home loans with a maximum loan amount of $359,650 that is typically higher than FHA and VA loans with lower interest rates. | |
Debt ratio or Debt-to-Income Ratio The ratio, expressed as a percentage, is calculated by dividing the monthly payment of long-term debts by gross monthly income. | |
Gross Monthly Income The total monthly income earned before taxes and any other deductions. | |
Private Mortgage Insurance (PMI) In the event that you do not have a 20 percent down payment, lenders will allow a smaller down payment - as low as 3 percent in some cases. With down payments below 20%, borrowers are usually required to carry private mortgage insurance depending on your loan's structure. Private Mortgage Insurance, is paid on all non-government-insured loans and whose equity is less than 20%. When you have accumulated 20% in equity, your lender may waive PMI at your request. FHA and VA loans have different insurance and guidelines; see Mortgage Insurance Premium for FHA loans. | |