Points are fees paid upfront to lower your interest rate. Typically, each point costs 1% of the loan amount and can decrease your interest rate by 0.25%. Paying points may be advantageous if you plan to remain in your home long-term and wish to save money on interest over the loan’s duration.
Q: Debt-to-Income Ratio: How Does it Affect My Mortgage Application?
Your debt-to-income ratio (DTI) is the percentage of your monthly gross income allocated to debt repayment. Lenders utilize DTI to assess your capacity to repay a mortgage loan. A high DTI may hinder your mortgage qualification or lead to a higher interest rate.
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