By: Sarah Morard - Mortgage Expert at First Integrity Mortgage Services
If you've gone through the home buying process, you understand it can be overwhelming, and if you're a first-time buyer, it can seem daunting. Terms like "earnest money," "escrow," "origination fee" are standard terms used in mortgage lending that you may have never heard before.
At First Integrity, we understand the mortgage process can be confusing and we work to help our borrowers navigate the process step-by-step. When you shop for a home, you will hear some industry jargon you're not familiar with.
To help you, we've created an easy-to-understand glossary of some of the most common mortgage terms:
Fannie Mae – Formally known as the Federal National Mortgage Association. Fannie Mae purchases mortgages from lenders and helps facilitate the flow of capital into the housing market by issuing and guaranteeing mortgage-related securities. Their work helps promote the 30-year, fixed-rate mortgage—a mainstay of the U.S. mortgage financing market.
Freddie Mac – Formally known as the Federal Home Loan Mortgage Corporation. They operate similar to Fannie Mae purchasing mortgage loans from lenders so they, in turn, can provide more loans to qualified borrowers. Its mission is to provide liquidity, stability, and affordability to the U.S. housing market in all economic conditions.
Earnest Money – This is when you are making an offer on a home at the beginning of the purchasing process. This is a deposit showing you're serious about purchasing that home. It's also known as a good faith deposit.
Appraisal – The formal document that determines the property's market value, which a third party authorizes.
Origination Fee – The lender fee that covers the processing of the loan.
Escrow - The use of a third party holds an asset or funds before transferring from one party to another. The account is used to pay the insurance premium and property taxes.
Closing Costs – Closing costs involve all the fees and expenses that need to be paid before or at the time of closing. Typical closing costs include but aren't limited to: Down payment, lender fees, title fees, appraisal, escrows, and inspections.
Understanding common terminology when purchasing a home will help you navigate the process with confidence and clarity. At First Integrity Mortgage Services, our goal is to educate our borrowers every step of the way.
If you or someone you know is thinking about buying their first home, moving into their next home, or interested in refinancing, reach out to First Integrity Mortgage Services in St. Louis, Missouri, today!
For more information or if you have any questions or comments, please contact Sarah Morard, NMLS #2009867, at 314.623.4922 or smorard@firstintegrity.com.
First Integrity Mortgage Services is licensed to assist borrowers in Missouri, Illinois, Kansas, Arkansas, and California.