When finding at getting a mortgage, there are some terms
that you should post yourself with so you know what
your mortgage lender is talking about. Below is a list of
the most commonly-used "mortgage phrases" and their
meanings to help you understand them better:
Adjustable Rate Mortgage (Arm) - A mortgage in which the
interest rate is adjusted periodically based on an index.
Calculate Mortgage Interest
Appraisal - The estimation of property value based on
recent sales data of similar properties.
Asset - valuable items, encumbered or not, owned by a
person, corporation, or entity.
Biweekly Mortgage - Mortgage loan payments that requires a
payment twice monthly, compliance thirteen payments per year
instead of twelve. This significantly reduces the time a
principal is paid off.
Closing - Final arrangements to transfer title of property
as well as allocate charges and credits.
Closing Costs - closing costs are fees paid by the borrower
when a property is purchased or refinanced. Costs incurred
include a loan origination fee, reduction points, appraisal
fee, title search, title insurance, survey, taxes, deed
recording fee, and reputation description charges.
Credit description - A description to a prospective lender on the
credit standing of a prospective borrower. Used to help
determine creditworthiness. data regarding late
payments, defaults, or bankruptcies will appear here.
Debt-to-Income Ratio (Dti) - The ratio of mixture monthly
debt to mixture monthly income.
Down payment - Money paid by a buyer from his own funds, as
opposed to that part of the buy price which is
financed.
Earnest Money Deposit - A deposit made by a possible home
buyer to show that they are serious about purchasing the
property.
Equity - The unlikeness between the current store value of
a property and the valuable balance of all outstanding
loans.
Fixed-Rate Mortgage - A mortgage where the interest rate
does not change for the life of the loan.
Good Faith assessment - An assessment of charges which a
borrower is likely to incur in connection with a loan
closing.
Gross Monthly wage - The total whole the borrower earns
per month, not counting any taxes or expenses. Often used
in calculations to conclude whether a borrower qualifies
for a singular loan.
Interest Rate - The division of an whole of money that's
paid for its use over a specified time period.
Lender - The bank, mortgage company, or mortgage broker
offering the loan.
Loan - The principal, or whole of total borrowed money,
that is repaid with interest.
Loan Officer - An intermediary between lending institutions
and borrowers, loan officers solicit loans, represent
creditors to borrowers, and rehearse borrowers to
creditors.
Loan-To-Value Ratio - The connection between the amount
of the mortgage loan and the appraised value of the
property expressed as a percentage. A Ltv ratio of 90 means
that a borrower is borrowing 90% of the value of the
property and paying 10% as a down payment. For purchases,
the value of the property is assumed to be the purchase
price, for refinances the value is considered by an
appraisal.
Mortgage - A legal document that pledges property to a
creditor for the refund of the loan, and is the term
used to characterize the loan itself.
Mortgage Broker - A mortgage company that originates loans,
joining the borrower and lender for a real estate loan,
earning a placement fee.
Origination Fee - The fee imposed by a lender to cover
certain processing expenses in connection with making a
loan. Usually a division of the whole loaned.
Pre-Approval - A term used to mean that a borrower has
completed a loan application and in case,granted debt, income, and
savings data that has been reviewed and pre-approved
by an underwriter.
Principal - The whole of debt, not counting interest, left
on a loan.
Purchase agreement - A written ageement signed by the buyer
and seeder stating the terms and conditions under which a
property will be sold.
Refinancing - The process of paying off one loan with the
proceeds from a new loan, using the same property as
security.
You'll probably hear any of these phrases from your
mortgage lender when getting a loan. Whenever you don't
understand something, be sure to ask him or her to by comparison
it in layman's terms to be sure you understand the whole
mortgage process.
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