One can get confused with the terms of the lending industry; it is like a different language. Your lender or mortgage services should be able to help you comprehend the ones that are relevant to your situation. But it is a good idea to understand some of the basic lending terms.
Paying off principal through time. Normally you pay off the principal of a mortgage loan over the loan’s term through a fixed schedule.
A qualified professional will write this report and it will estimate the value of the property that is being purchased.
These are the expenses in addition to the price of the property that buyers and sellers sustain when transferring the ownership of said property. Some examples of these costs are loan-origination fees, appraisal fees, attorney fees, taxes, title insurance, surveys and discount points.
This is the cash that a buyer will put toward the purchase of a property. The amount needed for the down payment will vary depending upon the type of loan.
This is a unbiased account where the documents and money in a real estate transfer are held until the sale is finished.
Simply the amount you owe.
PMI is private mortgage insurance that protects the lender from any default on mortgage loans. A lot of lenders will expect the borrower to purchase PMI and a monthly fee will be added to the mortgage payment, if the down payment is less than 20% of the price the property is purchased for.
This policy will confirm that the owner of the property does in face own the property and can transfer that ownership to someone else.
Loan-to-value (LTV) ratio
LTV is how much is borrowed in comparison to the value of the property. For example and 80% LTV on a property that is valued at $300,000 means the borrower put down $60,000 and mortgaged the remaining $240,000.
There are hundreds of lending terms, but these ones apply to most mortgage loans. Your lender will make certain you understand the ones that concern your financing.
Meta Description: Mortgage and lending terms can be confusing almost like a different language, you should learn some basic ones to help you through the mortgage process.