Here’s our last set of terminologies you should know about when applying for a home loan:

• Pre-Approval: A lender’s preliminary assessment of your creditworthiness, giving you an idea of how much you can borrow.
• Pre-Qualification: An estimate of how much you might be able to borrow based on basic financial information you provide to a lender.
• Origination Fee: A fee charged by the lender for processing the mortgage application.
• Appraisal: An assessment of the property’s value by a professional appraiser to determine its fair market value.
• Escrow: An account set up by the lender to hold funds for property taxes and homeowners insurance payments.
• Points: Upfront fees paid to the lender to lower the interest rate on the loan.
• Closing Disclosure: A document that outlines the final terms of the loan, including the interest rate, fees, and other costs.
• Debt-to-Income Ratio (DTI): The ratio of your monthly debt payments to your gross monthly income, used to assess your ability to manage mortgage payments.
• Credit Score: A numerical representation of your creditworthiness, which affects your eligibility for a loan and the interest rate you’ll receive.
• Refinancing: The process of replacing your current mortgage with a new one, often to get a lower interest rate or better terms.
• Equity: The difference between the home’s value and the amount you owe on the mortgage.

Let’s avoid confusion and master these essential home loan terms.

Understanding home loan jargon is essential to securing the best deal for you. Learn the definitions of these final set of terms to streamline the home loan application process.

Have you encountered any confusing home loan terminologies? Let’s chat! I can connect you with a trusted lender if you’d like.