FAQs – General Finance Questions

Mortgage interest rates are subject to change on a daily basis. You can view mortgage rates on the AskChristee platform, on the internet, or from your lender.

USDA loans are guaranteed by the U.S. Department of Agriculture. These loans are for buyers with low to moderate incomes which means there are income and asset restrictions. The loans are available in rural areas and small towns which means they are area restrictions.

Interest rate, rate lock options, processing or underwriting fees, and loan origination fees. You should also make sure they process the loan type most advantageous for you.

Insurance that covers the lender against loss due to loan default. Conventional loans with less than a 20% down payment require mortgage insurance (PMI). Government insured loans such as FHA and USDA also require mortgage insurance.

The PMI rate is influenced by the borrower’s credit score, the loan-to-value (LTV), the loan term, marital status, debt-to-income ratios, and if the property is a primary residence. Rates may different between lenders. AskChristee calculates the monthly PMI premium based upon user inputs.

Mutual mortgage insurance (MMI) is applicable on all FHA and USDA insured loans. The FHA rate is influenced by loan amount, the loan-to-value, and loan term. The USDA utilizes a flat rate. AskChristee calculates the monthly MMI premium when applicable.

Due to the potential complexity of finances, most agents are not involved beyond referring the homebuyer to a lender. Does the referral constitute an involvement?

The basic mortgage payment is referred to as PITI, which includes Principal and Interest, monthly escrow payment plus any mortgage insurance and condo fees. AskChristee will calculate the total monthly mortgage payment.

Closing costs are fees associated with purchasing real property. Closing cost also include initial deposits in a lender escrow account for future payment of property taxes and homeowner’s insurance AskChristee calculates closing cost for all transactions.

For a better understanding of closing cost, please visit our Resources page for articles or videos on closing cost.

Yes, you can compare those fees that are directly paid to the Title company such as closing fee, abstract fee or document prep fee to name a few. Please read ‘Closing Cost Guide’ for a better understanding.

Yes. However, this does not relieve you of the responsibility to compare fees between Title companies.

You should discuss income, credit score, and monthly debts. Based upon these variables, the loan officer should suggest an allowable or target monthly payment. AskChristee will provide in-depth analysis based upon the target payment.

In some circumstances, they may want to confirm your credit score and monthly debts which are very important in arriving at a ‘target payment’. In other situations, it could be a ploy to obtain your loan application.

The simple answer is the income you disclose on your Federal Income Tax Return. However, the process may become more complicated for self-employed individuals, people with Tax Free income, bonuses, or overtime. The promise of future earnings may be considered under certain conditions. A qualified loan officer will review your last two years of earnings plus other contributing factors to arrive at acceptable qualifying income.

Qualifying ratios establish the relationship between your gross monthly income and monthly debt obligations including your mortgage payment. These ratios play an important role in the mortgage approval process. Each AskChristee PDF report provides the front-end ratio (mortgage payment only) and back ratio (mortgage payment plus recurring debt).

The condo payment will be added to the mortgage payment and become part of the qualifying ratios. Thus, the prospect of a condo fee could lower the affordable price home.

Yes, the mortgage payment on your primary home will be considered a debt in the qualifying ratios.

Generally only those debts that appear on your credit report that have more than 12 months payments remaining.

The simple answer is the loan type which requires the less amount of down payment and/or the lowest monthly payment. While there aren’t any absolute formulas, there are some guidelines to help you (and loan officer) make this decision.

VA Loans – Generally, this is the best loan option for veterans because you can borrow 100% and acceptable credit score is lower than conventional loans.

FHA Loans -Require a 3.5% down payment and accept lower credit scores than conventional loans. If you have credit scores of 660 or higher, a conventional loan may be a better choice.

USDA Loans – A great option for moderate income people looking to purchase in a small city or rural area. 100% financing and lower monthly mortgage insurance make this a better choice when compared to an FHA loan.

Conventional Loans -The most popular loan type. Conventional loans can require as little as a 3 – 5% down payment. If credit score is 620 or below, then FHA is probably a better fit.

We suggest you run the appropriate AskChristee module for all loan types and then discuss the report with a qualified loan officer.

Annual mortgage interest for loans up to $750,000 and property taxes up to $10,000 per year are deductible for primary home. AskChristee will calculate annual deduction and estimate tax savings based upon your marginal income tax bracket.

Computing the possible tax deduction on a vacation home is difficult and far different than calculating the deduction on a primary home. The deduction will be based upon the year and amount of your primary mortgage. AskChristee will estimate the deduction for a vacation home and we suggest you review the findings with a qualified tax consultant.

A first time home buyer can purchase a home with as little as a 3% down payment on a conventional loan. Additionally, some states reduce closing costs for 1^st time homebuyers.

Within mortgage guidelines, you may acquire funds via a Gift letter. Another option is to either borrow or make an early withdrawal from your retirement account. For additional insight, please read ‘Best Use of Cash’ article under the ‘Resources’ tab.

A lender agrees to pay a portion of your closing cost based upon a higher interest rate. Some lenders will exclude prepaid items from the eligible amount and the credit is based upon the total loan amount and not the purchase price. AskChristee will calculate any lender credits toward closing cost.

Seller credits (concessions) are the sellers’ agreement to pay all or part of the buyers’ closing cost. Each loan type has specific parameters for allowable seller credits. AskChristee will calculate seller credits in accordance within acceptable mortgage guidelines.