Spelling Out Mortgage Understanding

Mortgage Lender Solana Beach, CA

Spelling Out Mortgage Understanding

A Quick Guide To Common Mortgage Acronyms

Applying for a mortgage can feel a little overwhelming, largely because there is not much new vocabulary. So you can know what is happening at each step of the process, here is a guide to the most common acronyms used in the mortgage industry.

  • GFE, Good Faith Estimate: This is a document your lender provides to you that will outline the taxes, fees, and other costs you will likely have to pay at closing. Generally, your GFE will give you an idea of escrow closing fees, lender origination fees, title insurance, and more.
  • DTI, Debt-To-Income: This ratio is the measure of how much money you have going out to your existing debts against how much money you have coming in. Lenders use the DTI ratio to determine if you can assume more debt.
  • PMI, Private Mortgage Insurance: You will pay for this insurance in order to protect your lender. If you put less than 20 percent down on your home, be prepared to cover the cost of PMI.
  • ARM, Adjustable-Rate Mortgage: This type of mortgage has an interest rate that will fluctuate over the life of the loan with the movement of an agreed-upon index.
  • FRM, Fixed Rate Mortgage: This mortgage will maintain the same interest rate over the entire life of the home loan.

You do not have to learn a whole new language to get the mortgage you need. So you can have the right home loan for your family, contact Ranch & Coast Mortgage Group Inc. in Solana Beach. We are here to serve California families, understanding their specific needs and using our expertise to make sure they are fully met. To have an expert guide you through the more confusing parts of the mortgage process, call us today!