When it comes to the world of homebuying in Washington, Oregon, Idaho California or Colorado there’s a certain lingo that’s unique to this realm. This can make it a bit difficult for buyers who are new to the homebuying game to follow and understand.
As such, it’s worthwhile for buyers to take a little bit of time to get to know some of the acronyms that are frequently used in the industry.
For instance, do you know what these acronyms mean?
APR – Annual percentage rate
This represents the annual cost of borrowing money based on the loan amount, interest rate, and any other applicable fees.
FRM – Fixed-rate mortgage
This type of home loan comes with an interest rate that remains fixed throughout the term and never changes. If rates are really low when you buy a home, it may be best to lock in at a low rate with a fixed-rate mortgage.
DTI – Debt-to-income ratio
Your DTI represents how much of your monthly income is dedicated to paying your monthly debt bills.
PMI – Private mortgage insurance
This type of insurance is required if you make less than a 20% down payment towards the purchase of your home. PMI protects lenders from losses if you are unable to pay your mortgage.
P&I – Principal and interest
These represent the portion of your monthly mortgage payment that will go towards paying off the loan amount you borrowed to buy a home.
While these phrases might sound foreign to you when you first hear them, knowing what they are and what they mean can help you better understand the homebuying process.
If you’re in the market to buy a home, Sammamish Mortgage is available to help. We offer a wide variety of mortgage programs and tools with flexible qualification criteria. We’ve been helping buyers obtain the mortgages they need in Oregon, Washington, Colorado, California and Idaho for over 30 years, and we’d love to help you too. Please contact us today to get started.
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