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Terminology
Here Are Some Helpful Terms Used Throughout The Real Estate,
Mortgage, and Title Processes.
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Qualifying Ratios |
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Lenders use certain guidelines to determine a potential borrower's credit-worthiness. The two guidelines used are the housing and debt ratios. They are expressed as two numbers like 28/38 where 28 would be the housing ratio and 36 would be the debt ratio. It means that:
1. Your housing expenses (PITI) should not exceed 28 percent of your gross monthly income and
2. Housing expenses plus long- term debt should not exceed 38 percent of your gross monthly income.
The housing expenses include monthly mortgage principal, interest payments, property taxes and homeowner’s insurance. There may be other expenses, such as condominium fees, homeowners fees, special assessments, etc., that are included. Long-term debt is defined as monthly expenses extending more than 10 months into the future. The qualifying ratios may vary but 40% is common (40/40 ratio).
Please note that qualifying ratios are only a rough guidelines and underwriters consider many variables in their analysis. Many times, borrowers fall outside the guidelines, but have strong compensating factors that reflect low credit risk. Some compensating factors are history of savings, long-term job stability, a substantial down payment or excellent credit history will influence the decision to approve or deny a particular loan with ratios up to 30/50% common.
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Quitclaim Deed |
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A deed which transfers whatever interest the maker of the deed may have in the particular parcel of land typically for no sales price. A quitclaim deed is often given after a divorce to remove one person from the deed or for family transactions. By accepting such a deed the buyer assumes all the risks. Such a deed makes no warranties as to the title, but simply transfers to the buyer whatever interest the grantor has. See Deed
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