What is PITI? [INFOGRAPHIC]

The acronym PITI stands for principal, interest, taxes, and insurance. These are the four components that make up a monthly mortgage payment.

When determining your eligibility for a loan, your mortgage lender will look at your debt-to-income ratios, comparing your PITI (or PITI combined with other debt) to your monthly gross income. This helps them to determine how much you can afford.

The infographic below helps to illustrate how each component is different. We have also provided examples of the average home cost and the associated PITI for the states that First Bank serves. We hope it helps!

What is PITI [INFOGRAPHIC]

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Five Reasons to Refinance Your Mortgage Banking professionals suggest mortgage refinancing when homeowners want to replace their current loan with a new one, often to reduce monthly payments or lower interest rates. With a mortgage refinance, your current loan is paid off and replaced with a new one. This can be a great option for borrowers with good credit who want to alter their current loan. But refinancing could be risky for borrowers with less than perfect credit. Check out our list of reasons to refinance and see if you could benefit from refinancing your current mortgage. 5 Reasons to Refinance Lower interest rates—If mortgage rates have dropped since you first took out your loan, you could secure a lower rate by refinancing. Lower monthly payment—Lowering your interest rate could have a dramatic impact on your monthly payment. If you intend on staying in your home for several years, lowering your payment could help you save. Shorten loan term—When interest rates fall, homeowners can often significantly shorten their loan term by refinancing without much increase in their monthly payment. Convert between adjustable-rate and fixed-rate—With adjustable-rate mortgages, your initial interest rate may be low and and then increase over a period of time. Refinancing to a fixed-rate mortgage could allow you to avoid an increase in rate. Cash out to make a large purchase—If you have equity in your home, refinancing enables you to cash out on that equity without taking out a loan, such as a home equity loan. A lot of people will use this cash to pay for home repairs, college tuition, or make a large purchase, such as a car. These types of refinances are typically easy to complete and may even be tax deductible. If you still aren’t sure if a mortgage refinance is right for you, visit our online refinance calculator to see how much you could save, or visit your local First Bank branch to speak with a mortgage specialist. Loans subject to credit approval. ——— Sources: https://www.investopedia.com/mortgage/refinance/when-and-when-not-to-refinance-mortgage/ 2 min read

How to Get a Custom Homeowners Insurance Quote Without a Calculator Homeowners insurance may not be the most exciting part of buying a home, but it’s one of the most important. Buying a home is probably your biggest investment, so use every tool to make sure that you’re covered. Homeowners insurance calculators are powerful tools toward that end, but they aren’t always tailored to you. Contact Bankers Insurance for a free quote, and one of our experts will contact you within 48 hours to discuss what best fulfills your homeowners insurance needs. Customized Homeowners Insurance From Your Community Bank As a homeowner, it’s important to know you’re protected from unexpected disasters and your policy is reliable and cost-effective. That’s why Bankers Insurance provides insurance programs that utilize a custom design to fit your specific needs. As a representative of several leading insurance carriers, we’re able to provide you with quality products, competitive rates, and consistently excellent service. Our experts work with you to find the best home insurance solution for you at an affordable, competitive rate. What You Need to Know About Homeowners Insurance Basic homeowners insurance only covers damage caused by “fire, theft and certain natural disasters,” meaning you may have to purchase additional coverage depending on where you live and what materials were used to construct your house. For example, you may want to consider a home warranty to cover repairs and replacements that home insurance won’t cover. According to Forbes, there are 4 Costly Homeowner’s Insurance Mistakes to Avoid: Under-insuring your house. Without enough insurance to cover the cost of rebuilding your house if destroyed, you may be left in a financial crisis following a disaster. You should calculate the cost of rebuilding your house and make sure your protection matches that cost. Additionally, you might consider coverage for your valuables. Assuming you have flood insurance. Depending on where you live, flood coverage could be essential. Many homeowners are unaware that basic coverage does not include flood insurance, but for those living in coastal or other flood-prone areas, that extra coverage is critical. Thinking you have one, flat deductible. It’s common to assume that your policy has a set deductible (usually between $500-$1,000), but that’s not necessarily true. Depending on the cause of damage — hurricane, windstorm, earthquake, and 3 min read

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FHA Mortgage Loan Insurance If you’re in the market for a new home, it’s quite likely that you have thought about acquiring mortgage loan insurance through the Federal Housing Administration (FHA). Established in 1934, the FHA has helped millions of people insure their properties. Over the years, especially following the economic crisis of 2008, the FHA has implemented requirements for potential homebuyers. Loan Limits To remain eligible for FHA loan insurance, consumers must fall within the loan limits. These limits are not only divided by state but are also doled out per county. If you’re curious as to what your state’s FHA loan limits are, you can refer to the Federal Housing Administration’s website. Debt-to-Income Ratio This ratio was set to ensure homebuyers do not purchase a property that they cannot afford. By using these calculations, it can be determined whether or not a person has the potential to meet the demands of owning a home. The ratio is looked at in two different ways: Mortgage payment expense to effective income = Total mortgage payment divided by gross monthly income. The maximum qualifying ratio is 31%. Total fixed payment to effective income = Total mortgage payment added to monthly revolving and installment debt, which is then divided by gross monthly income. The maximum qualifying ratio is 43%. Credit FHA requires that a borrower have good credit standing. In order to receive approval, a lender analyzes the borrower’s past credit performance. Loan approval will likely be declined should the credit history reveal slow payments, poor financial decisions, and delinquent accounts. Other issues are having no credit history, filing for Chapter 7 or Chapter 13 bankruptcy, making late payments, being subjected to foreclosure, and receiving collections, judgements, or federal debts. Apply for an FHA Loan with First Bank You have a friend at First Bank to better understand the loan requirements. We work with the Federal Housing Administration to offer FHA insurance mortgages. In order to quicken the process, you can apply online. Just be prepared with some financial information, such as income, assets, and expenses; you will also have to know the property’s information, like the estimated purchase price and down payment (if buying) or estimated property value and loan amount (if refinancing). ——— Sources: 2 min read

What is PITI? [INFOGRAPHIC]

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