5 Home buying Acronyms You Need To Know

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.