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A: Why use a Connecticut Mortgage Broker?
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Alethea C in Bridgeport, CT.

"I feel so blessed by God right now because of what he has bestowed upon me through you all at Acorn Home Mortgage. You did an awesome job! This is nothing short of what I new you could do. Your staff were fabulous! They put up with me 3 to 4 times a day and their attitude never changed. I am still trying to take it all in, and I'm sure it will take many months before I understand the fullness of this blessing which was also my heart's desire.

May God Forever Bless you. Rev. C."

Why using a Connecticut mortgage calculator will not give you the whole picture…

Whether you are trying to determine: How much home you can afford? Using a mortgage calculator will not supply sufficient information to let a person determine how much the total monthly payment will be. In order to perform a complete review the following additional information needs to be considered:

The interest rate is determined by evaluating each of the following factors:

FICO (Credit score) – The middle FICO score for the borrower will be the primary factor to determine the rate for loans / mortgages (first or second).

INCOME TYPE – Depending on your income and employment, it should be determined if you want a full document or stated mortgage program.

DEBT RATIO – This is the percentage of your total income (Documented or Stated) spent on your total expenses. Total expenses include principle, interest, taxes, homeowners insurance, condo monthly dues, car payments, credit cards, alimony, child support, student loans, etc. This is all the debt that appears on a borrower’s credit. The guidelines may go as high as 55% of the gross total income.

FULL DOCUMENT – You submit your income as it is reported on your W-2 or your Tax returns. The lender does set minimum limits. These limits vary from lenders, FICO score, reserves, etc. This type of program will yield you a slightly lower interest rate.

STATED PROGRAM – This program type is used for several reasons. These may be that the borrower is self employed or paid a low base pay with large commissions, or is aware that near term income changes will occur such as the eliminations of debts, higher reoccurring debt, a pending job promotion or a spouse returning to the workforce. This loan type will enable the borrower to meet the lender’s debt ratio requirements. Therefore, the borrower may decide it is better to state their income however the lender will charge more for this type of loan/mortgage. The lenders do have guidelines and do utilize geographic salary information to see if the stated income makes sense.

TAXES, INSURANCE, ASSOCIATION DUES – Any property will have taxes and insurance required. If the property is a condominium or cooperative, there will also be a monthly maintenance fee. These items will be included in the monthly debt.

LOAN TO VALUE (LTV) – When applying for a loan, either a purchase or a refinance loan/mortgage, the higher the amount of money that you ask to borrow, when compared with the total value of the property, the greater the amount of risk that has to be taken by the lender. We call this the percentage of Loan to Value (LTV) and this will also impact the interest rate offered by the lender. The larger the percentage of LTV, the greater the risk to the lender, and therefore the higher the interest rate. If 100% financing is an option, the programs vary however the lender’s exposure remains the same which is high.


TERM – The term is the length of the mortgage which the loan is amortized or period that the interest will remain constant. The term is part of the equation to qualify the borrower. In today’s mortgage industry, there are hundreds of different programs such as 15, 30, 40 and even 50 year mortgages or a wide range of adjustable rate mortgages. Deciding the correct program requires a close review of your specific situation.

 
RATE FACTORS : BASE RATE WILL: BASE RATE WILL:
FICO SCORE BELOW 680 INCREASE .
FULL DOCUMENT . DECREASE
STATED INCOME INCREASE .
DEBT RATIO ABOVE 45% INCREASE .
LTV (GREATER 80%) INCREASE .



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Acorn Home Mortgage
1720 Post Road East, Suite 214
Westport, CT 06880
Office:1 203 682 0246
Toll Free:1 800 339 0680
Fax:1 203 682 0248
 



Tel. 203 682 0246
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