A written document evidencing the lien on a property taken by a lender as security for the repayment of a loan. The term "mortgage" or "mortgage loan" is used loosely to refer both to the lien and the loan.

A request for a loan that includes the information about the potential borrower, the property and the requested loan that the lender makes a decision on. In a narrower sense, the application refers to a standardized application form called the "1003" which the borrower is obliged to fill out.

The fee that lenders charge to accept an application. The fee is normally nonrefundable and covers misc. expenses.

A written estimate of a property's current market value prepared by an appraiser.

It estimates the fees you will pay at closing.

Approval means that the borrower meets the lender's qualification standards and also it's underwriting requirements. In most cases, the approval is contingent upon further verification of information.

Your debt, income and mortgage payment make up the Debt to income ratio. This is the primary factor whether you get the loan and normally has to fall below 50%. In some cases, lenders programs will allow up to a 60% DTI

A mortgage on which the interest rate and monthly mortgage payment remain unchanged throughout the term of the mortgage.

A mortgage on which the interest rate, after an initial period, can be changed by the lender. While ARMs in many countries abroad allow rate changes at the lender's discretion ("discretionary ARMs"), in the US most ARMs base rate changes on a pre-selected interest rate index over which the lender has no control. These are "indexed ARMs".

All mortgages have an interest rate, term, and annual percentage rate (APR). For example, a mortgage might be defined as a 30-year fixed-rate loan at 7.625 percent, with an APR of 7.800 percent. In this example, the mortgage term is 30 years. As the borrower, you will pay back the loan in installments over the course of 30 years.

The annual percentage rate (APR) is a measure of the cost of credit, expressed as a yearly rate. Because APR includes costs such as origination fees, it's usually higher than the advertised rate.

Most pre approvals in the lending business aren't really worth the paper it is printed on. A true pre approval focuses on the following: Your lender or mortgage company does a financial review of your credit and finances to determine how much of a home you can afford.

You than receive a loan commitment which is based on the market that day, and could change based on economic factors in the economy and marketplace. This shows sellers that you are a qualified buyer.

Your mortgage company normally focuses on the following four items: Income/debt ratio: How much money you make vs. how much money you pay in monthly bills equals your debt ratio. This helps the lender determine whether you can afford to make monthly mortgage payments.

Assets: Your mortgage company needs to make sure you have enough money to cover the costs of buying a house.

Credit: Your credit is an indicator to your lender of how responsible you are as a borrower.

House/Property: The house you want to purchase has to be worth enough to act as collateral for the mortgage.

In some markets home buyers can put as little down as 3.5% with a government insured FHA loan. Conventional funding sometimes has to be as much as 20% but contacted us. Let us evaluate your situation and develop a plan of attack to accomplish your goals and dreams.

Closing costs may vary based on several reasons but might include location of property (county & state), lender and whether concessions are given by the seller. Normal charges will include:

Lender fees: Your mortgage company may charge for expenses related to making the loan, including an appraisal fee, a credit report fee, origination points, and discount points.
Third party fees: Charges normally include settlement fee, title insurance, and attorney's fees.

Prepaid items: The most common are pre-paid interest, hazard insurance, property taxes and deposits to set up an escrow account. The common term is “reserves” which sometimes equates to 3 to 6 months worth of the above items.

Your credit history is only one factor in qualifying for a loan. Give us a call and speak with a loan consultant to see which program is right for you. We will map out a direction if you will not qualify to get you closer to that home of your dreams.

For most borrowers, each monthly mortgage payment includes the following:

Principal: total outstanding balance of the loan

Interest: rate of return paid to the lender

Taxes: fees paid on your property to your county or local government

Insurance: protects the lender from losses caused by fire, hurricanes and natural disasters

PMI: private mortgage insurance (usually required with loan amounts higher than 80% loan to value