MORTGAGE TERMS

Discount Points -Discount points are a one-time, upfront mortgage closing cost which give a mortgage borrower access to “discounted” mortgage rates as compared to the market. When discount points are paid, the bank collects a one-time fee at closing in exchange for a lower mortgage rate.

  • 1 discount point on a $200,000 loans costs $2,000
  • 0.5 discount points on a $200,000 loan costs $1,000
  • 0.25 discount points on a $200,000 loan costs $500

 

Closing Disclosures (CD) – The closing disclosure list the final numbers of your transaction.  Lenders are required to provide your Closing Disclosure three business days before your scheduled closing.

Loan-To-Value Ratio – Loan-to-value, or LTV, refers to the relationship between a property’s sales price or appraised value and the amount of loans against it. It’s the mortgage balance / the property value. So a $100,000 house with a $90,000 mortgage against it has an LTV of 90 percent. When there is more than one loan involved, perhaps a first and second mortgage, the calculation is called the combined loan-to-value, or CLTV.

Debt-to-Income Ratio (DTI) -The ratio between a borrower’s monthly payment obligations divided by his or her or gross monthly income.

Earnest Money – Deposit in the form check or cashiers check, given to a seller by a buyer as good faith assurance that the buyer intends to go through with the purchase of a property. These funds are typically held with a title company or attorney.

Hazard Insurance -A form of insurance that protects the insured property against physical damage such as fire and tornadoes. Mortgage lenders often require a borrower to maintain an amount of hazard insurance on the property that is equal at least to the amount of the mortgage loan.

Origination Fee – when applying for a mortgage loan, borrowers are often required to pay an origination fee to the lender. This fee may include an application fee, appraisal fee, fees for all the follow-up work and other costs associated with the loan.

Title Insurance – the lender is using the home as collateral for the mortgage transaction. Because of this, they need to be certain that the title of the property is clear of any liens which could jeopardize the Mortgage. So, lenders will require borrowers to get title insurance on the property, which will ensure that the homes are free and clear.

Title Insurance – the lender is using the home as collateral for the mortgage transaction. Because of this, they need to be certain that the title of the property is clear of any liens which could jeopardize the Mortgage. So, lenders will require borrowers to get title insurance on the property, which will ensure that the homes are free and clear.

Appraisal- An estimate of the value of property made by a qualified professional called an appraiser. Based on an appraiser’s knowledge experience and analysis of the property.

Interim Financing – A construction loan made during completion of a building or a project. A permanent loan usually replaces this loan after completion.

Mortgage Insurance –Money paid to insure the mortgage when the down payment is less than 20 percent.

PITI – Principal interest taxes and insurance. Also called monthly housing expense.

Why Southern Home Loans?


JASON PETTERSONInvestor at Pear Inc.

Marion County Service Providers

Current turn times for Loan Submissions 48hrs – Conditions 48hrs