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Understanding the meaning of mortgage acronyms and terminology
Here’s a quick explanation of what the main mortgage terms mean to help you start talking like a pro.
AI summary
Navigating the mortgage process is easier when you understand the language. This guide explains key terms for Kiwi home buyers.
- LVR (Loan-to-Value Ratio): Compares your loan to the property's value; lenders typically prefer an LVR of 80% or less.
- DTI (Debt-to-Income Ratio): Measures your total debt against your income, a key factor for assessing affordability.
- UMI (Uncommitted Monthly Income): Your disposable income after all expenses, indicating your financial buffer.
- Credit Score: A rating reflecting your credit history.
Understanding these concepts helps you prepare a stronger mortgage application.
What does LVR mean?
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What does DTI mean?
Image provided by mortgages.co.nz
What does UMI mean?
Image provided by mortgages.co.nz
What does AML mean?
What is a credit score?
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