After the popularity of my last post on mortgage acronyms, I thought it might be a good idea to add a second part which focuses on terms relating to the application and application process. I hope this list helps you in your attempt to purchase a home.

APR – Annual Percentage Rate. The rate of interest charged annually on a mortgage.

PR – Primary Residence. A home which will be lived in by the applicant.

IP – Investment Property. A house which will be purchased with the intention of collecting rent or flipping the house.

GFE – Good Faith Estimate. An estimate of closing costs for the mortgage terms quoted by the loan officer. This document should be sent within 3 days of application.

RESPA – Real Estate Settlement Practices Act. A federal law which determines what is and is not allowed in the sale of a house.

TIL – Truth in Lending. Documentation required by RESPA to be sent within 3 days of mortgage application, which discloses monthly payments and total costs of the mortgage over the life of the loan.

VOD – Verification of Deposit. A verification letter used to ensure the validity of bank assets, going back as far as 60 days.

VOM – Verification of Mortgage. A verification letter used to ensure all mortgage payments over the last 1-2 years have been made on time for any existing mortgages.

VOE – Verification of Employment. A verification letter used by mortgage companies to ensure employment is still active.

CWBR – Coborrower. The second applicant on an application. This person has to qualify for all mortgage guidelines

If you are in the market for a new house and have any questions about the process, please contact me and I will help you out. If you have anything to add about any of these words, please leave a comment.