Confused by Mortgage Acronyms?


Sometimes real estate and mortgage professionals forget that consumers don’t know the meaning of the terms and acronyms they use on a daily basis. And sometimes consumers are too shy to speak up and say “What does that mean?”

If you’re confused and not asking, here are a few of the most common terms and acronyms you’ll run across during your home buying adventure.

GFE – Good Faith Estimate.

This is a document your lender must supply to give you an idea of what you’ll be paying in closing costs. Use it to compare costs and fees between lenders and loan programs.

One section of the GFE deals with lender fees, title insurance, appraisal and inspection fees, courier fees, etc. These fees can vary from lender to lender, so deserve special attention. The document is labeled “good faith” because some of these fees can’t be precisely determined until you’re into the loan process. However, they should be very close.


The other section is Prepaids. The prepaids include interest, homeowners insurance, property taxes, and mortgage insurance that must be paid or deposited into an escrow account prior to closing.

LTV – Loan to Value

The amount of your loan as a percentage of either the appraised value or the selling price – whichever is less.


DTI – Debt to income ratio

This is the percentage ratio that compares your monthly obligations (including your new mortgage payment) to your monthly income.  Other obligations included are credit card payments, school loans, car loans, retail accounts, child support payments, and payments on other real estate you own.


The percentage you’re allowed will depend upon the kind of loan you’re getting – so talk with your lender before shopping for a new home.




As the name suggests, these are documents designed to verify all the information you’ve given your lender during the application process. Much of the information can be verified in other ways, but when needed, these forms are sent directly from your broker to the entity who will issue the verification. This could be your bank, your employer, your landlord, etc.


VOD is verification of deposit.

VOL is verification of loan.

VOR and VOM are verifications of rent or mortgage payments.
VOE is verification of employment.


Ready to get started? Call us.


Here at Homewood Mortgage, the Mike Clover Group, we’re always willing to get you pre-approved before you shop. With a pre-approval in hand you’ll never be disappointed by setting your sights on a house that’s out of your reach – and home sellers will give your offers prime consideration because they’ll know you can close.


So if you’re thinking of becoming a Texas homeowner, call us at 1-800-223-7409 or apply on line at


Mike Clover

Mortgage Banker

Homewood Mortgage, LLC

Toll FREE: 1-800-223-7409

O: 469-438-5587

F: 972-767-4370

NMLS# 234770


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