Mortgage Broker Acronyms Explained
Have you ever been in a discussion with a real estate specialist and been completely perplexed by their industry’s jargon? Industry jargon can be confusing and frustrating for customers in any area in which we do not work. This situation is more than likely to occur several times while purchasing a new house. When a specialist, such as a Mortgage Broker, often uses certain terms and acronyms on a regular basis, it is clearly an assumption on their part that you are aware of their meanings. Although mortgage brokers are the most common perpetrators of this form of misunderstanding, they are often the first to take a step back and illustrate them to you so that you have the expertise and, more importantly, the confidence to acquire one. To help you get started, here are some of the most popular acronyms used by mortgage brokers. Finance Broker Sydney offers excellent info on this.
EMD stands for Earnest Money Deposit.
Your EMD will be referred to by a mortgage broker at the start of the loan process. Earnest Money Deposit (EMD) is an acronym for Earnest Money Deposit. Your Earnest Money Deposit is a monetary deposit made on a real estate property in order to validate a purchase bid.
LTV stands for Loan To Value.
Mortgage brokers would also recommend that a seller’s property be appraised in order to determine the Loan To Value ratio (LTV). The loan-to-value ratio is expressed as a percentage. A loan of $50,000 on a property valued at $100,000, for example, has an LTV of 50%.
TIL stands for Truth In Lending.
Mortgage brokers are required by law to provide a Truth in Lending report to any potential borrower (TIL). The TIL contains important loan details such as the total sum financed, the annual percentage rate (APR), finance costs, and a timeline for repaying the loan.
APR stands for Annual Percentage Rate.
For those who are not familiar with statistical and financial calculations, the Annual Percentage Rate can be difficult to comprehend. Simply put, it is the rate that would be paid on a specific loan amount depending on a variety of factors, including but not limited to the loan amount, the loan life, and any extra costs associated with the loan.