Loan paperwork can be full of acronyms and abbreviations you may not be familiar with. Arm yourself with knowledge before diving into your loan paperwork to ensure you understand everything in the document:
FICO: Fair Isaac Corporation is the industry-standard credit score organization. Most lenders use a FICO credit score as part of your application.
APR: The Annual Percentage Rate is the interest rate you’ll pay yearly as part of your mortgage.
ARM: An Adjustable Rate Mortgage is a mortgage that starts at a fixed rate for a predetermined amount of time and then adjusts regularly.
GPM: A Graduated Payment Mortgage is a type of mortgage in which initial payments are low and slowly rise over the course of the mortgage.
HELOC: The Home Equity Line of Credit is a type of loan in which the lender provides a maximum amount in exchange for collateral in the form of equity from the borrower’s home.
LTV: The Loan-to-Value ratio describes the division of the loan amount by any money put down by the borrowers in a down payment.
P&I: The Principal and Interest are the main components of the mortgage.
PITI: The Principle, Interest, Taxes, and Insurance are all the components included in the mortgage payments.
PMI: Private Mortgage Insurance is often required for buyer that put less than 20% down on their home.
Sources: Lending Tree
We are ready to help you find the best possible mortgage solution for your situation. Contact Sheila Siegel at Synergy Financial Group today.
