The mortgage industry loves jargon and it can quickly confuse a real estate professional and all the moreso a borrower. The Fannie Mae Sellers Guide alone has 91 different acronyms and abbreviations.
The National Mortgage News recently offered up a few of the most common acronyms buyers and professionals should know while going through the homebuying process.
DTI: Debt to income
UETA: Uniform Electronics Transactions Act
- Underwriters turn to this ratio to determine if a borrower can financially meet a mortgage obligation.
PITI: Principal and interest plus taxes and insurance
- One of this Act’s purposes is to help harmonize state laws with the recognition of electronic signatures on documents.
ATR: Ability to repay
- Lenders often will break a borrower’s monthly payment down into this equation.
HOEPA: Home Ownership Equity and Protection Act
- The Dodd-Frank Act mandates that lenders ensure borrowers have the ability to repay their debt.
SFHA: Special Flood Hazard Area
- The law helps to determine when a loan becomes considered a high-cost mortgage.
- Lenders must monitor flood maps to see if the property has been placed into these zones.
Test yourself on more mortgage-related acronyms at National Mortgage News
Source: “10 Mortgage Abbreviations Everyone in the Industry Should Know,” National Mortgage News (2017)