Conforming Loan - Loan which meets secondary market guidelines. Loan amount below $417,000.
Non-Conforming - Loan which does not meet secondary market guidelines. Loan amount above $417,000.
FHA - Federal Housing Administration; loan type requiring as little as 3.5% down payment
VA - Loan type with 100% loan financing offered by the US Department of Veteran Affairs.
PMI - Premium Mortgage Insurance; insurance premium paid by the borrower associated with a low down payment; utilized by banks to protect their assets; typically paid monthly.
UFPMI - Up Front Premium Mortgage Insurance
DTI - Debt To Income; Ratio of both housing expense vs. monthly income and total monthly expenses vs. monthly income.
LTV - Loan to Value; example: $100k purchase price with 20% down payment equals 80% LTV.
Term - Describes the length of the loan; 30 years, 15 years, etc.
Fixed Rate - Interest Rate does not change over the life of the loan.
ARM - Adjustable Rate Mortgages; interest rate adjust yearly following a brief period of a fixed rate; example; 5/1 ARM =fixed rate for 5 years then adjusts every one year after that.
Jumbo Loan - amount over $417,000.
Appraised Value - Market Value of the home following an analysis of comparable sales in the area.
Purchase Price - Price a home is being purchased for.
Down Payment - Amount of money being paid on the purchase price by the borrower to lower their initial loan amount from the bank.
Closing Costs - The fees that a bank will charge the borrower. This does not include any taxes, insurance, etc.
Purchase Contract - A written contract between a home buyer and a home seller brokered by their respective real estate agents. This must be signed by all parties before loan processing can take place.
GFE - Good Faith Estimate - document provided by the bank which outlines all potential fees that could be charged for your loan transaction.
Settlement Statement - Itemized document which outlines all fees, costs, and collections for the given real estate transaction.
APR - Annual Percentage Rate - Interest rate as expressed with any fees or additional costs associated with the transaction; example: 4% interest rate with fees of $800 equals about 4.045% APR.
Principal - Actual loan amount
Interest - Paid on top of the principal balance over the life of the loan.
Amortization Schedule - A complete table of periodic blended loan payments, showing the amount of principal and the amount of interest that comprises each payment so that the loan will be paid off at the end of its term.