Accescompetences.com | Business – Financial News

It’s not very often that a borrower takes into heavy consideration what his loan to value is when shopping for a loan.  In fact, if the subject is brought up by the customer, it’s mostly in relation to avoiding paying monthly mortgage insurance.  But sometimes, a loan to value can affect even more aspects of your loan – like pricing and approval!

What is loan to value?  Well, it’s exactly what it says.  The loan amount compared to the value of the home you are buying or refinancing.  For example, if you are buying a $100,000 home, and your loan amount is only $50,000, your loan to value or “LTV” is 50%.  It’s also very common to refinance a home to obtain a lower LTV and drop mortgage insurance that was before required.

Different types of loans have different minimum requirements for LTV’s.   With primary residence purchases, for instance, an FHA loan can have as high as a 97.75% LTV (soon to change to 96.5% in 2009).  A conventional loan can have as high as a 97% LTV (but more common is 95% LTV).  VA and Rural Housing loans can have 100% LTV’s.  People who have cash to put down on the property they are buying and financing with a conventional loan oftentimes try to amass 20% of the purchase price in order to avoid mortgage insurance.  Mortgage insurance is required when your LTV for a primary residence is above 80% and is issued by independent mortgage insuring companies like Genworth Financial or PMI.  Fannie and Freddie, the big purchasers of conventional loans, will require one of these or other approved companies issue mortgage insurance unless the loan has an 80% LTV.  And if you’re refinancing the home you live in?  The whole grid of acceptable LTV’s changes for the most part, with a few exceptions.  And furthermore, if you’re talking about investment properties, it’s another can of worms.

But when else does LTV mean something?  Consider when a loan specialist prices your loan.  Oftentimes there are pricing differentials based upon the loan to value.  For instance, if you carry mortgage insurance and your LTV is 85.01% or higher, you might actually get a better interest rate than if you had an 85% LTV (but don’t get too excited because your monthly mortgage insurance will be higher).  Or if your LTV is 60% or lower, you might also get a better interest rate.  If you are close to tipping the scales on one of these ratios, it may be to your benefit to ask your loan specialist how close you are to a pricing break one way or another.  You’d be surprised to find out it might change your mind as to how much money you decide to put down on your loan. 

And guess what else?  A low loan to value may be the difference between loan approval and loan denial.  Why is that?  Because if you are investing enough of your own money into the equity of a property, chances are you won’t default on the loan.  And if you do, it’s probably a last recourse.  Not to mention, the lender who holds the note won’t lose money because there is enough equity in the property to cover foreclosure costs, re-sale costs and any value loss from an upside down market.  The lender is covered.  So, the lender will consider the loan less risky and a higher debt to income ratio is tolerated when reviewed with a high credit score. 

Tips you can use car insurance rates comparison

There are so many ways that you can use to keep your auto insurance rates down and some of them you can use at the same time as other discounts to maximize your savings.

Here are some things that you can ask your auto insurance company for:

- Ask if you can receive a discount if you have more than one type of insurance with their company. For instance, you may find that you can have your auto insurance and your homeowner’s insurance with this company and they will provide you with a combined discount. Carry all of your insurance policies with them, such as auto, home, and life and you may find that you can get even more money off.

- If the driver of the car is a student or is listed as a driver on the car, you may find that you can get a good student discount. This is where the student maintains at least a B average on their report card. You may be required to take that report card to the automobile insurance company each time it comes out, but it really pays off. If grades go down, the discount may disappear until the grades go back up.

- See if there are any safe driver discounts available. When you haven’t had a ticket or an accident, you may find that there are discounts available for you.

- If you are a senior citizen and you’ve not had any accidents in a specific amount of time, there may be discounts available to you.

- You can always raise your deductible to cheaper car insurance premium online from auto insurer. However, you need to keep in mind that doing so will result in a higher out-of-pocket expense if an accident does occur. The standard deductible is $500, but some individuals will go as high as $2,000 to save some money on their premium. If you can pay $2,000 if an accident occurs, then that will work fine. Just make sure your deductible is not higher than what you can afford in case damage is done to your car and you need to pay it.

- You may wish to shop around. You may find a company that offers the same coverage for a lower price. You always want to compare before you make a commitment.

You want to use all of these tips so that you can save yourself quite a bit of money.

How you can compare auto insurance quotes online?

When finding the right company to do business with, it is very important that you compare. You can do this by calling companies and recording the different rates that they quote you. You can also do this by going to their websites and filling out the forms on their websites to receive quotes for the auto insurance you want. This allows you to compare in a much easier way. Take all of that information and make an informed decision.