Welcome back to RealtyMyths weekly word wizard. Here are some terms that you should know before buying your first home.
DTI — Debt-to-Income. The total percent of a borrower’s income that is paid toward debt each month calculated as a ratio of a borrower’s gross monthly income over his debts including car payments, student loans, and credit card bills. A borrower’s DTI affects his credit rating.
FSBO — For Sale By Owner. The owner of the property is selling without a real estate agent.
LTV — Loan-to-Value. The ratio of the amount of money borrowed over the appraised value of the home. It is a key risk factor that lenders consider when evaluating a loan application.
PITI — Principal, Interest, Taxes, and Insurance. The major homeownership costs included in many monthly mortgage payments.