While most real estate web sites offer an index of terms containing hundreds of Miami real estate and lending related terms, we wanted to highlight the top Miami mortgage terms that most Home Buyers will hear several times throughout the mortgage loan approval and home buying process.

Understanding the “Shop Talk” between the various industry professionals that you’ve assembled on your home purchase team will hopefully give you greater confidence when discussing important topics that may impact your transaction.

Mortgage Related Terms:

Amortization Schedule:

A schedule of payments showing the amount applied to the principal and interest through the payoff.

Annual Percentage Rate (APR):

The effective rate of interest that includes loan related fees. The APR helps determine the total cost of borrowing a loan and is used to compare loans that are advertised with different note rates.

Adjustable Rate Mortgage (ARM):

As opposed to a fixed-rate mortgage where the payment is set for the full term of the loan agreement, an ARM is tied to a specific financial index and may adjust after a set amount of time.

Buydown:

Where a borrower pays an up-front fee to lower the mortgage rate and monthly payment. Rate Buydowns can be used to help a borrower qualify for a loan, or as a means of negotiation where the seller would contribute to a lower rate in order to entice a buyer to purchase their property.

Combined Loan-to-Value (CLTV):

The total amount of mortgage obligations on a particular property compared to the fair market value.

Debt-to-Income Ratio (DTI):

A borrower’s minimum monthly liability payments divided by their gross monthly income.

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Be sure to watch for the next installment for Top Miami Mortgage Terms to Know.  If you do have questions between now and then, however, call now and we will answer them for you in a casual conversation about buying a Miami home for sale.

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