Your Guide to All the Confusing Letters You May Hear from Your Loan Officer.

When I started my internship at GoPrime Mortgage, I quickly realized that mortgage professionals speak a language full of letters. If you’ve ever applied for a mortgage or even researched the home-buying process, you’ve probably come across these acronyms and wondered, “What do they actually mean?” Don’t worry, you’re not alone. As a newcomer to the industry, I had the same questions, and I’m here to break it all down in simple terms. This glossary will help you understand the most common mortgage acronyms so you can feel confident when navigating the home loan process—no decoder ring required.

 

General Mortgage Terms

• APR – Annual Percentage Rate
• ARM – Adjustable-Rate Mortgage
• LTV – Loan-to-Value
• DTI – Debt-to-Income Ratio
• PITI – Principal, Interest, Taxes, and Insurance
• PMI – Private Mortgage Insurance
• GPM – Graduated Payment Mortgage
• HELOC – Home Equity Line of Credit
• HOA – Homeowners Association
• USDA – United States Department of Agriculture (for rural housing loans)

Loan Programs & Government Entities

• FHA – Federal Housing Administration
• VA – Veterans Affairs (VA Loan Program)
• HUD – Department of Housing and Urban Development
• HARP – Home Affordable Refinance Program (now expired but was key during the housing crisis)
• GSE – Government-Sponsored Enterprise
• FNMA (Fannie Mae) – Federal National Mortgage Association
• FHLMC (Freddie Mac) – Federal Home Loan Mortgage Corporation
• GNMA (Ginnie Mae) – Government National Mortgage Association

Mortgage Process & Underwriting

• CD – Closing Disclosure
• LE – Loan Estimate
• TRID – TILA-RESPA Integrated Disclosure
• TILA – Truth in Lending Act
• RESPA – Real Estate Settlement Procedures Act
• CFPB – Consumer Financial Protection Bureau
• U/W – Underwriting
• DU (Desktop Underwriter) – Fannie Mae’s automated underwriting system
• LP (Loan Prospector) – Freddie Mac’s automated underwriting system

Loan Types & Features

• IO (Interest-Only Loan) – A mortgage where only interest is paid for a set period
• JUMBO – Jumbo Loan (loan amount exceeding conforming loan limits)
• QM (Qualified Mortgage) – A loan that meets certain regulatory standards
• NQM (Non-Qualified Mortgage) – Loans that do not meet QM standards
• PPP (Prepayment Penalty) – A fee charged for paying off a loan early

Real Estate & Closing Terms

• REO – Real Estate Owned (bank-owned foreclosure property)
• CMA – Comparative Market Analysis
• MLS – Multiple Listing Service
• BPO – Broker Price Opinion
• CD (Closing Disclosure) – Final loan terms and costs statement
• DT (Deed of Trust) – A legal document securing a loan with real estate
• POC – Paid Outside of Closing

 

The home-buying process is a big step, and understanding the language is just one way to make it less intimidating. Now that you’ve got a handle on the basics, you’ll be able to tackle conversations with lenders and real estate agents with a little more confidence.