Mortgage acronyms – advanced level

Mortgage acronyms – advanced level

Two weeks ago, Mark Wells of Preferred Financial provided a list of mortgage-related acronyms certain to make you the life of any trivia party. This week, you can earn an advanced degree in
mortgage studies by learning the meaning of these terms:

LTV: Loan to Value. This is the ratio of the loan amount compared to the value of the house being purchased or refinanced. For instance, an 80 percent LTV loan would be an $80,000 loan on a $100,000 house.

CLTV: You may get your Ph.D. (See college acronyms for Ph.D.) if you know this one: Combined Loan to Value. If there is a second mortgage on the home, this is the ratio of all loan balances compared to the value of the house. In the LTV example above, if there was a $10,000 equity line involved, the LTV would be 80 percent, but the CLTV would be 90 percent.

HELOC: Speaking of CLTV, a HELOC is a Home Equity Line of Credit.

U/W: The most dreaded term in the mortgage industry—UnderWriter. This is the person who holds total sway over your future and will decide if your loan will be approved or you will wander the streets homeless for the rest of your life. Just pray the U/W got up on the right side of the bed today!

O/O and IP: These stand for “Owner Occupied” and “Investment Property” and define the type of property you are buying or refinancing. Ph.D. credit: IP can also be expressed as NOO (Non-Owner-Occupied).

AUS/DU/LP: A triple whammy!

AUS stands for Automated Underwriting System. This is a computerized system that electronically underwrites your loan application and gives you a high degree of certainty that your loan will (or will not) be approved in underwriting. Fannie Mae’s AUS system is called DU (Designated Underwriting) while Freddie Mac’s is called LP (Loan Prospector). Both DU and LP systems can be used to underwrite FHA and VA loans, but USDA loans must go through: GUS (!)— which means:

GUS: Government Underwriting System

If you encounter an acronym that stumps you, Mark can be reached at (864) 235-9596 or via email at Mark@TheGreatestRates.com.