Buying a home and getting a mortgage will be one of the biggest financial decisions of your life!
Whether this is your first home or you’re a seasoned pro who just needs a refresher, here are the terms you need to know to help you make the most of your mortgage!
Appraisal: A report, made by a qualified person that sets forth an objective value of the home and property. This is ordered by the lender to ensure that the amount of money being requested by the borrower is appropriate. Read more about how an appraisal can affect your mortgage.
Closing Costs: This is not included in the home price but should be budgeted for when purchasing a home. It includes an origination fee, discount points, appraisal, credit reports, title insurance, attorney’s fees, survey and pre-paid items such as tax and escrow payments.
Conventional Mortgage: A mortgage not obtained under a government-insured program such as aVA loan.
Debt-to-Income Ratio (DTI): The Debt-to-Income ratio is the percentage of your gross income that goes towards paying debts, including credit card debt, car payments and student loans.
Earnest Money: A portion of a down payment delivered with an offer to the seller as evidence of good faith. Also known as a deposit.
Gift Letter: You can be given a gift to help you with a home’s down payment. This should be accompanied by a gift letter, written by the person giving the gift money, that there is no obligation to repay.
Gross Monthly Income: Your total monthly income before taxes and other deductions.
Non-Conforming Loan: Loans not eligible to be sold to Fannie Mae or Freddie Mac due to various reasons.
Origination Fee: The amount charged for services handling the initial application and the loan processing. This is included in closing costs.
PITI: Principal, interest, taxes, and insurance that make up the monthly mortgage payment.
When you’re buying a home make sure you work with a mortgage lender that can answer any of your questions and help guide you to make the best choices for you and your family. The mortgage experts at PCU can help you, contact us today to get started! Get your home loan questions answered by one of our knowledgeable Rockland and Bergen County Mortgage lenders. Visit one of our convenient locations in Nanuet, New City, or Orangeburg.
For more information about the mortgage loan process, see Everything You Need To Know About Home Loans. and How To Save For Your First Home.
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