Plus-5
Mortgage Terms: Knowing the Definition Isn't Enough
Knowing what LTV, DTI, APR, and PMI stand for is helpful. But understanding how those concepts affect your mortgage options is what helps you make informed decisions. We look at two examples of why mortgage guidelines don't always tell the whole story - and why asking questions matters.
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Read the transcript
This isn't another mortgage glossary.
Anyone with a web browser can look up definitions for terms like LTV, DTI, APR, and PMI.
But knowing what those terms mean isn't the same as understanding how they affect your mortgage decisions.
For example, an 80% loan-to-value ratio means you can avoid mortgage insurance on a conventional loan. But sometimes paying for mortgage insurance makes more financial sense than putting 20% down.
Or you might read that FHA loans allow debt-to-income ratios as high as 57%. But can you actually qualify at that level? And even if you can, does that payment fit your budget?
That's where understanding the rules - and how they apply to your situation - really matters.
And remember - it's always okay to ask. We're here to help you get home.