Check out my interview on the Kansas City Real Estate podcast with Joe Stephenson. We have a great discussion about mortgages and the mortgage industry. If you’re in the market for a new home, or just curious about how mortgages work, this is a great listen!Verify your mortgage eligibility (Aug 12th, 2022)
You can find the episode here: https://ksrealtyagent.com/real-estate-podcast/
Just like anything else, there is a lot of jargon in the mortgage industry. Here are some common terms you may hear your mortgage broker say, and what they mean:
- Amortization: This is the process of spreading out a loan into equal payments over its life.
- Annual Percentage Rate (APR): This is the cost of borrowing money, including interest and fees, expressed as a yearly rate.
- Closing costs: These are the costs associated with finalizing a mortgage, including things like appraisal fees, title insurance, and loan origination fees.
- Credit score: This is a number that lenders use to evaluate your creditworthiness.
- Debt-to-income ratio (DTI): This is the percentage of your monthly income that goes towards debt payments. Lenders use this to assess your ability to repay a loan.
- Fixed-rate mortgage: This is a mortgage with an interest rate that remains the same for the life of the loan.
- Interest: This is the cost of borrowing money, expressed as a percentage of the loan amount.
- Loan term: This is the length of time you have to repay a loan. Mortgage terms are typically 15 or 30 years.
- Points: These are fees paid to the lender at closing, in order to lower the interest rate on the loan. One point equals 1% of the loan amount.
- Pre-approval: This is a process where the lender evaluates your financial situation and gives you an estimate of how much they would be willing to lend you.
- Private Mortgage Insurance (PMI): This is insurance that protects the lender if you default on your loan. It is typically required if you have a down payment of less than 20%.
- Refinance: This is the process of taking out a new loan to pay off an existing one.
We get into the details and talk about what one can expect when going through the mortgage process on the show. We talk a little bit about the real estate agent world vs. the real estate mortgage broker as well.Show me today's rates (Aug 12th, 2022)