So about those mortgage rates you see advertised.
They’re fakes, mostly. Well, not fake because lenders can only advertise rates that are real, but nobody actually gets those advertised rates and let me tell you why.
Mortgage rates are complicated.
They’re the output from a formula. The answer to an equation with a dozen plus inputs and – because of that – whenever you see rates advertised online or on TV or sent your email inbox, you can know that you won’t get that advertised rate.
Because those rates are generic. And you are not.
Also because the fine print says so.
Whenever you see advertised rates, check the conditions behind that rate because lenders are required to talk about them.
You’ll see the rates assume you’re buying a home. It assumes you’re making a downpayment. It assumes your credit is impeccable. That you’re buying a house, and not a condo or a townhome or multi-unit. That you’re closing no more than 30 days. That your loan siae will be the two hundred thousand. That you’re using a 30 year fixed-rate loan. That you’re paying some random amount closing costs which might not be disclosed at all, and the list goes on.
That’s why, friends, those mortgage rates you see advertised are not really real. They’re fictitious rates for fictitious people buying fictitious homes and states they’ve never really identified and that’s not you.
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Debt-to-income ratio is the basis and building block for almost every mortgage approval.