Debt-to-Income (DTI) is one of the key ratios lenders use to assess and approve loan applications. Determining your current financial obligations versus your existing earnings is one part of a lending institutions necessary evaluation of your capability to pay back a loan. Like the video states: financial obligations are existing monetary obligations; a vehicle payment is a financial obligation while a grocery expense is not. To compute your debt-to-income ratio, assemble your month-to-month financial obligation payments and divide them by your GROSS regular monthly earnings. (Gross earnings is the money you make BEFORE taxes and other reductions.) The Federally-established debt-to-income target is currently 43% for Qualified Mortgages, although some experts advise aiming for a more conservative figure — less than 36%. If your DTI is greater than the Federal guidelines, other loans might be available. These may also involve more documentation and data to establish your ability to repay. Rates for these are likely to be different from those offered for Qualified Mortgages. High debt-to-income ratio puts a property owner at higher threat of challenges to making regular monthly payments. Review your scenario and risks thoroughly if DTI is an obstacle.

Picture your home loan on one side of a see-saw, and the home itself on the other. Thats a simplified version of LTV — "Loan to Value". Its one of the key ratios involved in setting loan amounts. Lenders frequently set LTV limits. If you know the ratio, you know the upper boundary of loan size, like this: "LTV on this $500K home is 80%." 80% x $500K = $400K max loan. Buyer would need at least $100K down for that loan. LTV also measures equity. If you put $100K down for the example above, you have $100K equity in the home. As a result, higher-LTV loans may require mortgage insurance. With an LTV greater than 80%, the risk of default is high because the homeowner has a lower "stake" in paying off the mortgage.

Laws to provide stable, suitable home financing created a category of loans and lending practices called "Qualified Mortgages." They provide guidance to help lenders provide loans that borrowers can repay successfully. Following the guidance and practices — and assessing each borrowers ability to repay—gives lenders additional legal protection. The Qualified Mortgage guidelines provide predictable and more-easily-understood loan features. They also rule out some loan terms and practices. Qualified mortgages cannot be: Interest-only loans Loans with terms >30 years "Negative Amortization" loans (increasing principal over time) Most forms of "balloon" loans with large payment partway into the loan period. These consistent practices help lenders and regulators provide consumers with objective guidance about reasonable debt. If you are buying a home, ask about your Qualified Mortgage options.

Do high-tension power lines have long-term health impacts? Everybody uses electrical energy, and power lines are required to carry it. Rumors and notions about possible effects from high-tension power lines have been around for quite some time. However, as this video reveals, according to the HUD – the US Department of Housing & Urban Development— there are no conclusive research findings verifying that direct exposure to power lines leads to higher circumstances of illness or disease.

Make sure to check a few practical risks in the decision process for a new home, including: Natural disaster risks Is it in an earthquake-prone area? Is earthquake insurance available, and how much does it cost? Likewise, are hurricanes a risk? Tornadoes? How high does the property sit, and is there a risk of flood? (Watch the video on floods here on Video-Genius.) Are there hazardous materials in the area? Building Code compliance; the house should meet local codes. Local zoning and (if applicable) homeowner association rules can also play a big role in future changes. If you envision remodeling, making an addition, or other substantial changes, be sure you understand the regulations and permits that will be involved.

The Loan Estimate form helps you compare different loans; Page 3 of the form summarizes the key figures. Cost-over-time figures ("In ___ Years") chart out the total amount paid, and the amount applied against loan principal. This ratio usually changes over time. Annual Percentage Rate - APR - gives you the ratio of interest PLUS any applicable fees for a complete percentage cost, per year. Total Interest Percentage - TIP - shows interest over the life of the loan, in relation to the loan amount. For example, a $500K loan with a TIP of 20% indicates that you would pay $600K (20% of $500K = $100K) in total.