Mortgage Broker Jargon Defined
All industries develop their own particular jargon and it is often this very trait that makes it that much harder for outsiders to become familiar with the exact goings on inside another interest, occupational, or service group. The mortgage industry is no exception.
eChoice Home Loan Comparison Service
Your eChoice mortgage broker is happy to spend time answering all of your questions about first home buying, investing, refinancing and more, to give you peace of mind, and make sure you get everything you are entitled to.
- Compare home loans from over 30 lenders to make sure you are getting the loan which is right for you now and into the future.
- eChoice can help you further manage your responsibilities by organising life insurance and income protection insurance for you.
- Interest Rate of 6.55%
- Comparison Rate of 6.55%
- Application Fee of $0
- Maximum LVR With LMI: 90%
- Minimum Borrowing: $0
- Maximum Borrowing: $0
You might pick up a magazine, or newspaper even, to help you learn the latest happening in the mortgage sector only to find the report is full of mortgage broker jargon that goes above your head. Many people tire of such inconvenience and turn off but the taking out of a home loan is a very big investment for you to make, in most cases the biggest investment you will ever make, therefore it is in your interests to learn and fully understand all aspects of what you are about to get involved in. It then makes sense to spare a couple of moments to learn the jargon that is causing you so much difficulty.
If you don’t care to understand the jargon that takes place in the mortgage business you might not fully understand what your mortgage broker is telling you. A mortgage broker is a person who makes a living out of finding the most suitable home loans for their clients and in doing so is constantly talking to other people in the industry, the conversations they undertake between themselves is full of professional jargon that is hard for them to shake off when talking to a client about the same subject. Many do and most will be apologetic when pulled up, but people being who they are, many home buyers will not want to show their ignorance and just nod along but not understand a word being spoken.
All mortgage brokers will fully explain to you any aspect of their offer that you do not understand but you must make them aware of your lack of knowledge of their professional jargon before they realise who they are talking to. The following few tips might prevent you from being one of those people being left in the dark regarding the jargon being spoken by your mortgage broker:
GFE
A GFE is a document your mortgage broker will hand you to familiarise you with the costs connected with the closing of the loan. It is simply an abbreviation of a Good Faith Estimate. Simple enough once you are told but quite hard to follow when thrown at you in conversation. The fees on this document will include title closing, mortgage and deed recording, lenders fees, and any other cost that has to be pre-paid such as your hazard insurance premium.
APR
In its simplified definition the Annual Percentage Rate (APR) is the interest rate that will be charged on the amount of money loaned , the life of the loan and any additional costs associated with the loan.
TIL
The TIL is a legislative requirement that all mortgage brokers have to comply with. It is a Truth In Lending (TIL) disclosure document that must include all pertinent loan information. This document must outline the amount of finance being offered, the APR (Annual Percentage Rate), all finance charges and the term of the loan.
LTV
In some countries this can be known as the LVR. It is essentially the Loan to Value Ratio. Mortgage brokers and lenders will require an appraisal of the sellers property so that its loan to value ratio can be found. The LTV is depicted as a percentage, for instance, if you took out a loan of $50,000 to pay for a property with an appraised value of $100,000 it would have a LTV of 50 percent.
EMD
You will hear your mortgage broker refer to your EMD at the start of your home loan process. It means your Earnest Money Deposit or EMD. It is the down payment you are prepared to place on the property to make the offer you have made a legitimate offer recognised by law.
Although you may have difficulty in memorising all these many acronyms at the moment, your mortgage broker will let them slide off his or her tongue with amazing ease. At least you will now have something to refer to and it won’t be all that long before you too will be doing the same. Perhaps in exhibiting this knowledge your mortgage broker will be more inclined to treat you as a person who has done the homework and take more time to explain other aspects of the loan you might not be so fully conversant with.
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