:: It's Greek to me!

Terms to know

The mortgage industry is full of terms that are foreign to many people. The following glossary of terms should help you translate the mortgage language into English and help you make sense of the mortgage process.

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Rate vs. Price
Rate refers to the interest rate. Price refers to points. It is easy to become confused as both rate and points are usually referred to in 1/8 percent increments. A good rule of thumb is that often a 1/8% change in interest rate reflects a 1/2% change in points (actual rate and points may vary slightly)

Single Family Residence
Standard, one unit home, as opposed to a Condo/Town Home with a homeowners association

Title Company
Company that prepares title work and is where the closing is held

Title Insurance
Policy provided by the title company on their title work guaranteeing the accuracy and completion. Lenders Policy is required and only protects the Lender from loss, Owners Policy is available at buyers discretion and protects the owner

Title Work
Document prepared by title company which outlines the ownership of the property and other various details

Underwriting
Act of approving a loan application. Underwriters are bound by guidelines set forth by Fannie Mae, Freddie Mac, FHA or VA as applicable

VA Financing
Government backed financing available only for service veterans, characterized by no down payment, no mortgage insurance, but with a funding fee

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