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Mortgage Choice - How to find the best home loan

Kristy Sheppard from Mortgage choice discusses about the importance of finding a home loan most suitable to your financial situation as well as ...

Avoid Paying Mortgage Insurance Despite Low Down Payment

If you are stretching your funds to purchase a home with a minimal down payment, you are probably familiar with private mortgage insurance (PMI) . It is generally required in any home purchase in which the down payment is less than 20%. PMI is insurance for the lender, not for you it covers the lender for the increased default risk that you present.

Typically, lenders arrange PMI through a third-party insurer. The premium is calculated based on a percentage of your loan amount and incorporated into your monthly payment. The PMI lasts until you no longer pose a heightened risk of default, usually near the 20-22% equity range.

If you have a hard time accepting this approach, consider a variation of PMI offered through lenders. In this lender-based alternative, known as LPMI, the lender pays the PMI and passes that cost on to you through a higher interest rate on your loan and/or an upfront fee. LPMI often results in a lower initial monthly payment, which could make the difference in being able to afford your dream home.

Should Value Investors Consider Ellington Residential (EARN) Stock?

Free Report ) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:

PE Ratio

A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.

On this front, Ellington Residential has a trailing twelve months PE ratio of 7.44, as you can see in the chart below: