Having a “hot” car that looks good to their friends is not unusual for a new teenage driver. But it is important when considering the high price of student car insurance rates to follow certain guidelines before purchasing their first car.
When considering the price of student car insurance rates, it is important to follow certain guidelines concerning the type of car that they drive.
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Debt to Income Ratios, often referred to as “DTI’s”, are a key calculation used in the refinance, debt consolidation, and purchase mortgage application process. A debt to income ratio is arrived at by dividing your monthly debt payments by your pre-tax income. Debt to income ratios are finally used to determine how much money you can borrow, and a thorough knowledge of DTIs can help you get the most value from your refinance, debt consolidation or purchase mortgage transaction. There are two different types of debt to income ratios which are used in refinance, debt consolidation or purchase mortgage underwriting, a Front End Ratio (or “Front Ratio”) and a Back End Ratio (or “Back Ratio”). The Front Ratio is calculated by dividing the sum of your total monthly housing expenses, consisting of your mortgage payment including principal interest taxes and insurance as well as homeowner’s association fees, mandatory maintenance fees, common charges in a development and mortgage insurance if applicable. The Back Ratio is similar to the front ratio, but on top of basic housing expenses the back end ratio also includes your other monthly debt payments, particularly consumer debt payments, into the calculation. Examples of monthly consumer debts are your credit card bills, automobile payments, personal or student loans, etc. Examples of items not typically included in a back end ratio would be life, health & car insurance premiums. When your lender is evaluating your application, they are in fact trying to match your application with the lending criteria for the program which you want to see if you qualify for the loan. While there are many factors in determining how much money you can borrow and at what rate, debt to income ratio is amongst the most important. A good credit, conventional mortgage program will very often have a debt to income ratio requirement of 33/38 – front/back, meaning that your monthly housing costs should be less than one third of your gross income per month. If you make ,000.00 per month, that means the maximum mortgage payment you could qualify for under a 33/38 program would be ,000.00 per month inclusive of principal interest taxes and insurance as well as other housing costs, and your will only be allowed a total monthly expenditure including mortgage, credit cards and other consumer debts totaling ,140.00. That may seem very conservative, and it is. If you’ve ever been turned down by a brick and mortar bank for a mortgage refinance, debt consolidation loan or for financing a new home purchase, chances are it had something to do with your program’s low debt to income ratio. Many modern lenders are not as concerned about the back end ratio at all and decide solely on the basis of the front ratio, and in the case of a veteran’s VA loan, their guidelines only concern the back ratio and ignore the front. FHA loans allow you to carry more consumer debt but with a higher income requirement, with a standard debt to income ratio guidance of 29/41 – front/back. Progressive lenders now have programs with excellent rates which allow individuals to borrow up to 100% financing and in certain cases up to millions of dollars at even better rates than many of 33/38 programs, but which allow for a debt to income ratio of up to 55% or even 60% in some cases, whether you prove your income through tax returns and W2 forms or simply state how much you earn. These relaxed debt to income ratio criteria allow you to borrow more easily without the fear of rejection, and the better your credit and the larger your down payment in the case of a purchase or equity in the case of a refinance or debt consolidation the more relaxed these criteria can be. Debt consolidation programs can often make it much easier to qualify if you mandate that certain consumer debt accounts be directly paid off, thereby reducing your monthly consumer debt payments. Contact a nationally capable mortgage broker so that you have access to a wide variety of programs, and be honest with your loan officer about your earnings and debts and things will go smoothly. Remember, they want to get you the money you need, and will work with you to make sure that happens.
One of the vehicles that is liked world over are cars. And this phenomenon has continued now for ages. Cars have always attracted a huge fan following. And why not, after all they are supremely useful and add to the status symbol of any person immensely. No wonder there is such a craze for this majestic vehicle amongst people. Any new addition to the already existing fleet of cars send the entire population in a tizzy with people falling on each other to buy the latest variety. A car relieves people from the trauma of waiting long hours for taxi or bus. It also relieves them from the pain of jostling for seat with the fellow passengers. However, in spite of the fact that cars are multi-utility phenomenon they have one major draw back as well. their price. Indeed, this is one aspect that poses a big blockade between cars and their fans. Imagine, therefore, what happens if the car faces some damage. Needless to say that the cost that one might face on repair can very well shake the budget of any middle class household. It is here that car insurance comes into play and ensures that one is relieved from the trouble of arranging money for the repair as insurance companies would do that for their clients.