What does Loan-to-value (LTV) ratio mean?
To calculate this ratio, you need to compare the amount you want to take out compared to the apprasial value of your home.
ex.) If you buy a house that appraises for $150,000 and put down $15,000 (10% of the appraised price) you will then need to borrow $135,000 from the bank. The loan-to-value ratio will then be 90%. The higher the LTV ratio, the greater the risk because defaults are more likely. LTV decreases as you put more down.
What is an Escrow Account and what are the requirements for this loan?
Escrow accounts are like savings accounts that are managed by your mortgage lender. Your lender will deposit a portion of every mortgage payment into your escrow account to cover estimated property taxes, homeowners, and mortgage insurance premiums, long with flood insurance if necessary. It does not cover water/sewer bills, one-time assessments by your local government, nor homeowners association dues, or supplemental tax bills.
This refinance loan will requires you to deposit payment into an escrow account regardless of Loan-To-Value.
What type of housing qualifies for this type of refinancing?
Primary residents of Michigan and parts of Ohio including Cuyahoga, Lake, Lucas, Sandusky, Summit, and Wood counties are eligible. Condos and single-family homes qualify if there have been no prior bankruptcy or foreclosures.