What is a primary benefit of a fixed-rate mortgage?
Fixed-rate mortgages provide stability in monthly payments over the life of the loan.
How does an adjustable-rate mortgage (ARM) differ from a fixed-rate mortgage?
ARMs start with a fixed interest rate, then adjust periodically based on market conditions.
Which borrower is best suited for an interest-only loan?
Interest-only loans may benefit borrowers expecting increased income or short-term ownership.
What does 'loan-to-value' (LTV) ratio indicate?
The LTV ratio compares the loan amount to the appraised value of the property.
How can mortgage planning support long-term financial goals?
Strategic mortgage planning can help clients align home financing with retirement or investment goals.
What is a key characteristic of FHA loans?
FHA loans are government-backed and often require lower down payments.
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How does prepayment impact mortgage strategy?
Prepaying a mortgage can reduce total interest costs and shorten loan term.
What is a common goal of using mortgage refinancing?
Refinancing can reduce monthly payments or take advantage of lower interest rates.
Why is debt-to-income ratio important in mortgage qualification?
The debt-to-income ratio helps lenders assess a borrower's ability to repay the mortgage.