Loan Info
Hook and Ladder Lending is a Texas mortgage lending company with over 20 years of experience. We understand that navigating the mortgage landscape is never easy, and with so much information out there it can become overwhelming. That’s why our dedicated team is here to provide you with essential mortgage information, ensuring you make informed decisions about your home financing needs.
What is a Mortgage
A mortgage loan is designed to help individuals and families purchase or refinance a home. It becomes a legal agreement between the borrower and the lender by allowing the borrower to secure funds to purchase the property. The lender is provided with a lien on the property as collateral.
Once you have a mortgage, you will make regular payments, including principal and interest, over a specified period until you are able to fully repay the loan. There are various mortgage terms, but the most common amount of time it takes borrowers to pay back their mortgage is 30 years.
Rates vs APR
The interest rate of a mortgage is the cost of borrowing money, which in turn determines your monthly payment. Annual Percentage Rate (APR), on the other hand, includes the interest rate and fees that may be associated with the loan, such as closing costs or discount points to represent the true cost of the loan expressed in the form of a yearly rate.
Debt-to-Income Ratio
When lenders consider mortgage applications, the debt-to-income (DTI) ratio is a crucial factor. DTI compares your monthly debt obligations to your gross monthly income. Lenders will use the DTI ratio to assess if you are capable of managing additional debt and making your monthly payments. Having a lower DTI ratio means you have a greater chance of receiving loan approval.
When to Refinance
Refinancing is a great way to replace your existing mortgage with a new loan to take advantage of better interest rates or to modify the loan terms. For individuals looking to refinance in Texas, there are several times when you could consider refinancing, including:
Lower Interest Rates
Change in Loan Term
Access to Equity
Change in Financial Situation