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9 Mortgage Terms You Should Know

9 Mortgage Terms You Should Know

December 13th, 2015 | Home Owner Tips

It’s like a different language. APR, Fannie Mae, FHA, Freddie Mac, CFPB, PMI, HELOC—you can get lost in the terms of the lending industry.

Don’t worry. Your Utah mortgage broker can help you understand the ones relevant to your situation. But it’s a good idea to understand some basic terms that apply in many circumstances. Here are nine to get you started.

Amortization

Paying off principal (see below) over time. You normally pay off the principal in a mortgage loan over the loan’s term through a fixed schedule.

Appraisal

A written report by a qualified professional that estimates the value of the property being purchased.

Closing Costs

Expenses in addition to the price of the property that buyers and sellers incur when transferring ownership of that property. Examples of such costs are loan-origination fees, appraisal fees, attorney fees, taxes, title insurance, surveys and discount points.

Down Payment

Cash that a buyer puts toward the purchase of a property. The amount required for a down payment varies depending on the type of loan.

Escrow

A neutral account where the documents and money in a real estate transfer are held until the sale is completed.

Principal

The amount of money you owe.

PMI

Private mortgage insurance, which protects the lender against default on mortgage loans. Many lenders require the borrower to purchase PMI, a monthly fee added to the mortgage payment, if his down payment is less than 20% of the purchase price of the property.

Title Insurance

This policy ensures that the owner of the property in fact owns the property and can transfer his ownership to someone else.

Loan-to-Value (LTV) Ratio

How much is borrowed compared to the value of the property. An 80% LTV on a property valued at $300,000 means the borrower put down $60,000 and mortgaged the remaining $240,000.

Hundreds of lending terms exist, but these nine apply to many mortgage loans. Your Utah mortgage broker will make sure you understand the ones that relate to your financing.



Your Local Utah Mortgage Broker

As a Utah mortgage broker we work with several different mortgage lenders, enabling us to offer you a variety of mortgage programs at the best mortgage rates and lowest fees available. Working with several lenders allows us to offer more options to help you achieve your goals. Whether you're buying a new home or refinance your current home, Advanced Funding is here to help. Our loan professionals are available to help you during regular business hours or time that is more suitable to your needs. Call today for more information, 801-272-0600.

Utah VA LOAN ADVANTAGE

Veterans Affairs mortgages, better known as VA loans, make it easier for veterans to get financing to buy a home. Utah VA loans usually do not require a down payment and are available to military veterans and active military members. The Utah VA mortgage remains one of the few mortgage options for borrowers who don’t have the money for a down payment. VA loans are somewhat easier to qualify for than conventional mortgages. It offers a great benefit to those who are serving or have served our country.

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