A small guide to get you through all the jargon.
Reading all of the acronyms in a mortgage contract can leave you saying, “WTF?” If you’ve ever confused any acronyms in your texts, you’ve probably had a good laugh. Confusing the acronyms found in your mortgage contract, however, can end up being a costly mistake. For example confusing ARM for “A Rough Musketeer” could leave you paying a very high mortgage rate. Be confused no longer; know what the mortgage acronyms stand for with the list below:
- ARM: Adjustable-Rate Mortgage
- DTI: Debt-to-income
- FHA Loans: Federal Housing Administration Loans
- CFPB: Consumer Financial Protection Bureau
- HELOC: Home Equity Line of Credit
- PITI: Principal, Interest, Taxes, and Insurance
- QMs: Qualified Mortgages
- VOE: Verification of Employment
- LTV: Loan-to-Value
- LOX: Letter of Explanation
- IO: Interest Only
- P&I: Principal and Interest
Understanding exactly what is in your mortgage contract is essential to make sure you’re not getting the raw end of the deal. The same thing goes with your homeowners insurance policy: you want to make sure that you have the right amount of homeowners insurance coverage. Contact the insurance professionals at Massive Insurance in Pasadena, California for all of your home insurance needs.