Understanding the mortgage process will be complicated, especially with all of the loan-specific terminology. Learning common lending lingo may help the process. In this blog you will find definitions on common lending lingo in NH.
Common Lending Lingo
A pre-approval is paperwork written by a lender detailing the price and type of loan that a buyer may possibly be approved for given their current income, debt, and credit report. This is not the same as a pre-qualification, which provides merely an “unverified” estimate. Full approval is usually obtained after a buyer enters into a contract to purchase a specific home.
After a buyer finds a property, a mortgage company carefully reviews all of a personal documentation and the details on the property. A loan commitment is subsequently offered to declare that the initial criteria have been met and that the loan will be officially authorized pending a few final conditions.
An appraisal is ordered by a mortgage company to confirm the value of a home. It is due before a mortgage commitment or approval.
There are many charges associated with buying and selling a property. These are called closing costs. They often include broker commissions, transfer fees, mortgage fees, attorney costs, title insurance, and county recording fees. Pre-paid expenses such as home owners insurance are sometimes also lumped into the closing cost category, but they are technically a different type of charge billed at closing.
Title insurance protects against defects with a title and the costs associated with defending your ownership. Although title searches are performed before a property transfer, there may be issues that impact your title to a home that are not clearly included in a title search. Title insurance is a one-time expense at closing that protects you the entire time that you remain the owner of a property.
Mortgage Insurance (MI)
MI stands for mortgage insurance and is almost always charged on loans more than 80% of the home price. There is frequently an up-front fee and a monthly charge, both based on the starting loan amount. MI remains in place until the balance falls below 80% of the original value.
Additional Definitions On Common Lending Lingo In NH
This article offers definitions on common lending lingo in NH. There will be other phrases that you come across while obtaining a home loan or during the home buying process. For more guidance, contact Donna DuFour at 800-639-4405 or firstname.lastname@example.org.