Mortgage Pre-approval Glossary
When it comes to an Arizona home loan, there are literally thousands of different industry specific terms that lenders use. During the pre-approval phase of your mortgage experience, there is only a handful of mortgage related phrases and terms that you will come across. Below is a select section of terms that you should know during the initial pre-approval phase of your mortgage journey.
Loan Officer – a representative of a bank or broker who originates mortgages on their behalf.
Pre-approval/Pre-qualification – processes to determine what you can afford to ensure you can obtain mortgage financing when purchasing a property.
Automated Underwriting System – A computer-driven process for informing the loan applicant very quickly whether the applicant will be approved. The quick decision is based on information provided by the applicant, which is subject to later verification, and other information retrieved electronically including information about credit history, income, and work history.
Down Payment – an upfront payment made by the home buyer toward the property purchase price, usually ranging from five to 20 percent. The remainder of the sales prices makes up the mortgage loan amount.
Debt-to-income ratio – the ratio of monthly liabilities and housing expenses divided by the monthly gross income of the borrower.
Underwriter
Income Documentation
Asset Documentation
4506/Tax Transcript Form
Borrower’s authorization
Credit Inquiry
Loan to Value