R.E. Vocabulary 101

DEBT RATIO
Percentage established by the lender to determine one's ability to pay back a loan in relation to one's debts-to-income. A lower percentage reflects a healthier financial state. The average range is 33-36%.

ESCROW ACCOUNT
Part of the mortgage payment that is deposited into an account specifically set aside to pay real estate taxes and homeowner's insurance.

HOUSING RATIO
Percentage established by the lender to provide protective equity base for mortgage lending. The average acceptable range is 25-28%, based upon the size of the borrower's down payment.

ORGANIZATION FEE
Fee charged by a mortgagee for processing a mortgage loan application.

PITI
More commonly known as Principal + Interest + Taxes + Insurance.

POINTS
Amount of discount on a mortgage loan stated as a percentage. One point equals one percent of the face amount of the loan.

PRIVATE MORTGAGE INSURANCE
Borrower is charged an insurance premium that covers the extra risk to the mortgage of making a loan greater than 80% of the appraised value.

COMMUNITY HOME BUYER PROGRAM
Loan programs are available for low to moderate income families. Easier qualification with less down payment makes more dreams come true.

 

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Greg Sapp, GRI, CRS

645 E Missouri Ave. - Ste #210
Phoenix, AZ 85020

Tel: (602) 861-3300
Fax: (602) 861-3301

Email: greg@gregsapp.com


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