What are terms and phrases used in the mortgage industry?
There are many terms and phrases used in the mortgage industry that may be confusing for someone who is unfamiliar with the process of obtaining a mortgage. Here are a few examples of commonly used mortgage jargon:
- APR (Annual Percentage Rate): The annual cost of a loan, including interest, fees, and other charges, expressed as a percentage.
- Amortization: The process of paying off a loan over time through regular payments.
- Closing costs: Fees and expenses associated with obtaining a mortgage, such as appraisal fees, title insurance, and attorney's fees.
- Credit score: A numerical rating of a person's creditworthiness, based on their credit history.
- Down payment: The initial payment made by a borrower when purchasing a home.
- Escrow: Money held by a third party, usually the lender, to be used for property taxes, insurance, or other expenses related to the mortgage.
- Interest rate: The rate at which interest is charged on a loan.
- LTV (Loan-to-Value) ratio: The ratio of the loan amount to the value of the property.
- Principal: The original amount of a loan, not including interest.
- Refinancing: The process of obtaining a new mortgage to replace an existing one.
- Title: A legal document that proves ownership of a property.
This is not an exhaustive list, and there are many more terms and phrases used in the mortgage industry. It's always best to consult with a mortgage professional if you have any questions about specific terms or phrases.