If buying a home is in your future, there are some terms you are going to need to know. We are breaking down 7 of the most common home buying acronyms on the blog today!
- HOA = Homeowners Association. Many neighborhoods are governed by a Homeowners Association. If you choose a home in a HOA-regulated neighborhood, you’ll pay association fees and will be subject to the HOA’s rules. On the plus side, you’ll also benefit from some nice services like trash removal, amenities, lawn care or maintenance!
- FRM = Fixed Rate Mortgage. A fixed-rate mortgage has an interest rate that does NOT change during the entire term of your loan.
- ARM = Adjustable Rate Mortgage. An adjustable rate mortgage generally has lower monthly payments at the beginning, but will adjust over time depending on the interest rates.
- P&I = Private Mortgage Insurance. This is the extra fee you pay when your down payment is less than 20%.
- LTV = Loan to Value. This is the ratio that is calculated by dividing the loan amount by the home’s purchase price. This is important because if you put down less than 20%, you could be able to tap into a special program from your lender.
- PITI = Principal, interest, taxes and insurance. Also called your “monthly housing expense”, this includes your mortgage payment and a monthly portion of your homeowners insurance and real estate taxes.
- CD = Closing Disclosure. A document that provides important information about your loan, like the interest rate, monthly payments and closing costs. You’ll want to make sure that the information in this document matches the Loan Estimate you received when you applied for the loan.
Real estate terms can seem complicated! We are here to help. Contact us today to help you navigate the home buying process.