11 May Sheryl’s Mortgage Term Glossary
Here is another set of terms and acronyms that Real Estate Agents use. These focus on the Mortgage side of selling a home. Visit my post “Sheryl’s Realtor Terms Glossary” for more terms.
Mortgage Terms
FHA Mortgage- Federal Housing Administration Mortgage
This is a home loan issued by the government for approved lenders.
Conventional Mortgage-
These loans are not guaranteed by the government. They come as fixed rate or adjustable loans. Fixed rate loans have a set interest rate while adjustable interest rates go up and down with the market.
LTV- Loan to value
This is the amount of the loan or balance of your loan divided by your purchase price or current Appraisal. This will give you a percentage or LTV ratio.
MCL- Mortgage Commitment Letter or Written Statement
A lender will send this to you. It’s their commitment to back your loan. Sellers will require this from buyer to ensure the financing will go through.
PMI- Private Mortgage Insurance
This insurance is payed on Conventional Mortgages if you can’t put down 20% as a downpayment. After paying your mortgage down to an LTV of 78% your PMI is eliminated. You can also ask in writing of the lender to cancel the PMI at 80% LTV but this has a few more requirements such as on time payments and possibly a current Appraisal.
MIP- Mortgage Insurance Premium
This is an insurance payed on all FHA loans and the rules have recently changed. If your original LTV is above 90% you will have to pay MIP for the life of your loan no matter how low you pay it. If it’s 90% or lower you’ll have a MIP for at least 11 years.
DVA- Department of Veterans Affair
The DVA offers a special Mortgage to veterans with 0% down.
I’m happy to help with any questions, please call me at 612-889-6496 or email at [email protected]
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