by Andrew Augustyniak, Peoples Morgage

As we continue to go through this crazy time, we are seeing refinances still hold strong and purchases begin to pick up again. I have been asked by many people what I think of the market and where it is going. The reality is before this all happened, the market was an extreme sellers’ market with homes selling in minutes after going live. After this occurred and certain industries began to be affected, it took out a portion of the competition. From there, we continue to have multiple offers within hours, but the competition has just been slightly less from before.

Many who can, are taking advantage of these low rates and putting themselves in a healthier financial position in life. Investors are increasing their cash fl ow positions on their rentals or even picking up more rental properties. Once more people get back to work, the competition will grow, and I predict even more people will begin to move to warm climate states like Arizona.

With everything going on, I wanted to stay simple in today’s article and just have a refresher on terms in my traditional mortgage world. Perhaps the most aggravating aspect of the mortgage process for a borrower is the mortgage specific lingo. As with any industry, the insiders have created their own abbreviations and slang. In order to help you navigate the mortgage process with less stress and greater understanding, we have put together a list of common terms that you may hear throughout the process.

VOE – This is an abbreviation for Verification of Employment. Mortgage companies are required to collect a verification of employment that breaks down how the borrower is paid, as well as if their employment is expected to continue.

LTV – Th is is an abbreviation for Loan-to-Value. LTV is a ratio that is calculated by dividing the loan amount by the lesser of the appraised value or purchase price. Each loan type has minimum LTV requirements.

DTI – Th is is an abbreviation for Debt-to-Income. DTI is a ratio that takes your minimum monthly debt obligations plus your projected mortgage payment, divided by your monthly income. This ratio is one of the most important in regards to mortgage qualifying, as it helps determine how much a borrower qualifies for.

LE – Th is is an abbreviation for the Loan Estimate. This government mandated form is included in the initial disclosure package and is designed to show the borrower an estimate of the monthly mortgage payment and closing costs.

CD – This is an abbreviation for the Closing Disclosure. This government mandated form is received by the borrower after underwriting. It shows the closing figures for the borrower. It is required to be received three days before closing.

Knowing what these terms whether you are an investors or random individual may not seem too important, but it never hurts to acquire more knowledge in this real estate world. Stay Healthy!


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