The mortgage principal on a loan is simply the amount borrowed to buy the house excluding interest. In other words, it’s the price of your new home minus your down payment. On purchase transactions, unlike a refinance, the closing costs are generally not added to the loan amount. When a consumers shop for a mortgage,
An amount equal to one percent of the principal amount of the mortgage. Points are fees paid to the mortgage lender to obtain the home loan. Points will reduce the amount of the loan available in a refinance transaction. For a purchase transaction, points will increase the amount of funds needed to close the loan.
A person is considered self employed in the mortgage industry if they own more than 25% of the company they work for or they are paid as an independent contractor. A self employed borrower’s income is calculated by taking a two year average of the borrowers’ net income plus depreciation if they own the business