FAQs

What is PMI?
Insurance for the mortgage lender that provides compensation in the event that the borrower defaults on the loan and the real estate foreclosure price is not sufficient to pay back the remainder of the loan. Generally a requirement if you are putting less than 20% down, however, depending on your credit, many people looking for 100% financing can get a an 80/20 loan where you have a first mortgage at 80 % of the loan and a second mortgage covering the other 20%. Your interest rate will be higher on the 20% portion, but this way you'll avoid PMI and can write off the interest. Please talk to one of our mortgage brokers to see if you can qualify.

What is GDS?
The percentage of gross annual income required to cover payments associated with housing. Payments include mortgage principal, interest, property taxes and sometimes include secondary financing, heating, and / or association fees. Example: a person that makes $50,000 and uses a 28% GDS ratio can afford $1166.66 a month in housing expenses. In the past, banks used 28% GDS as a hard-line percentage, but in today's market, that number can change dramatically if one has a good credit score.

What is TDS?
The percentage of gross annual income required to cover payments associated with housing and all other debts and obligations, such as car loans and credit cards. Again, 36% is a conservative figure and depending on your credit score, banks can raise this percentage drastically.

Current Interest Rate?
http://www.bankrate.com/brm/default.asp Please keep in mind that your interest is dependant on your credit score, employment situation, type of loan, etc. Padding the 30 year fixed rate from Bankrate.com by a point is recommended.