Internal Rate of Return (IRR) and Return on Investment (ROI) are financial metrics that gauge the potential of your investments. These metrics give insight into the expected returns and viability of your investments. Because they broadly serve the same function, new investors might get a little confused about which metric they should use. The Mortgage …
Although the APY and the APR serve distinct purposes when it comes to borrowing money for investment, they are both crucial in helping you make smart choices about investment loans and mortgages. Both metrics impact how much interest you’ll pay or earn on your mortgage investments. Let’s break down the APR vs. APY mortgage concepts …
The Annual Percentage Rate (APR) and the interest rate are key components of mortgage loan acquisition. These two metrics influence monthly payments and the overall cost of borrowing. Simply put, if you are looking to get a loan for property investment, these two formulas will enable you to borrow money wisely. While both the interest …
Mortgage Rates: Annual Percentage Rate Vs. Interest Rate Read More »
As the lending market has evolved, lenders have adopted various metrics to assess risk and determine loan provisions. This includes debt yield ratios which are used in combination with Loan-to-Value Ratios (LTV) and Debt Service Coverage Ratios (DSCR). Rather than relying on property values or amortization schedules alone when evaluating operations, this metric allows for …
Unlike traditional loans, debt service coverage ratio (DSCR) loans are designed for borrowers who want to avoid the income verification standards, slower approvals, and underwriting complexities of conventional mortgages. The DSCR loan pros and cons vary depending on the borrower’s goals, financial situation, and property investment. Before You Apply for DSCR Loans If you’re considering …
One of the first important decisions you’ll need to make when buying or refinancing a property is whether you prefer a 15-year or 30-year mortgage. While both choices offer a set monthly amount over a lengthy period of time, there are more distinctions between the two than simply how long it would take you to …
FHA loans and conventional mortgages are common mortgages used to finance homes. Whereas Federal Housing Administration (FHA) mortgage loans are insured by the government, conventional loans come solely from private lenders such as credit unions, banks, and mortgage brokerages. FHA loans have lower qualifying standards and lower down payment criteria than conventional loans. Conventional mortgages, …
Fixed-rate and variable-rate mortgages are two types of mortgage loans that homeowners use to finance their homes over years. The basic difference between variable rates vs fixed rates is the interest rate. Fixed-rate mortgages have a fixed interest rate that does not fluctuate, no matter the market conditions. Meanwhile, variable-rate mortgages have variable interest rates …
In the world of mortgages, there are two major categories: jumbo loans vs. conventional loans. While conventional loans conform with the loan limit and conditions set by the Federal Housing Finance Agency or Fannie Mae and Freddie Mac, jumbo mortgages do not. Jumbo mortgages make up only a tiny percentage of all mortgages in the …
When looking for a way to finance or refinance your home, it’s essential to answer the mortgage broker vs. lender question. While both mortgage brokers and lenders can help you get the financing you need to buy a home, there are differences in their duties and the way they operate. Understanding the differences can help …
