5 Home buying Acronyms You Need To Know

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Real Estate

APR (Annual Percentage Rate)

Annual cost of borrowing money based on the loan amount, interest rate, and certain other fees.

FRM (Fixed-Rate Mortgage)

Interest rate that does not change during the entire term of your loan.

DTI (Debt-to-Income)

Percentage of your monthly income that goes toward your monthly debt payments.

PMI (Private Mortgage Insurance)

Insurance that protects lenders from losses if a homeowner is unable to pay their mortgage. it is required for home buyers who make down payments less than 20% of the home purchase price.

P&I (Principal and Interest)

Principal and interest are the portions of your monthly mortgage payment that go toward paying off the money you borrowed to buy your home.