Morales Homes And Loans

"HOME" Buying / Selling? Thinking about REFINANCING? Reasons to consider a REFI *Mortgage Glossary:* "Home For Sale"

Mortgage Glossary:

FIXED LOAN TERMS: 

30-YEAR FIXED
The payments for a fixed rate mortgage  stay the same. Term allows maximum mortgage interest tax deduction.

15-YEAR FIXED
The monthly payment is higher but the interest rate is usually lower and one saves half the total interest cost of the 30-yr mortgage. Terms does not allow for the maximum mortgage interest tax deduction.

1 YEAR FIXED
The rate is set for a specific period - with these loans, one year. At the end of that time, the loan reverts to a variable rate or you can renegotiate a further fixed term.

5/1 YEAR ARM
T he rate is fixed for a period of 5 years after which in the 6th year the loan becomes an adjustable rate mortgage (ARM).

So that's what it meant......?

  1.  Adjustable rate mortgage (ARM) Is a mortgage in which the interest rate is adjusted periodically based on a preselected index. Also sometimes known as the re negotiable rate mortgage, the variable rate mortgage or the Canadian rollover mortgage.
  2. Amortization Means loan payment by equal periodic payment calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.
  3. Annual percentage rate (A.P.R.) Is a interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account point and other credit cost. the APR allows home buyers to compare different types of mortgages based on the annual cost for each loan.
  4. Appraisal An estimate of the value of property, made by a qualified professional called an "appraiser".
  5. Balloon (payment) mortgage Usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract.
  6.  Borrower (Mortgagor) One who applies for and receives a loan in the form of a mortgage with the intention of repaying the loan in full
  7. Broker An individual in the business of assisting in arranging funding or negotiating contracts for a client buy who does not loan the money himself. Brokers usually charge a fee or receive a commission for their services.  
  8. Buy-down When the lender and/or the home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires.  
  9. Cash Flow The amount of cash derived over a certain period of time from an income-producing property. The cash flow should be large enough to pay the expenses of the income producing property (mortgage payment, maintenance, utilities, etc.)
  10. Caps (interest) Consumer safeguards which limit the amount the interest rate on an adjustable rate mortgage may change per year and/or the life of the loan.
  11. Caps (payment) Consumer safeguards which limit the amount monthly payments on an adjustable rate mortgage may change.
  12. ClosingThe meeting between the buyer, seller and lender or their agents where the property and funds legally change hands. Also called settlement. closing costs usually include an origination fee, discount points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. The cost of closing usually are about 3 percent to 6 percent of the mortgage amount.
  13. Conventional loan A mortgage not insured by FHA or guaranteed by the VA.
  14. Credit Report A report documenting the credit history and current status of a borrower's credit standing.  
  15. Debt-to-Income Ratio The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her gross monthly income. See housing expenses-to-income ratio.
  16. Deed of trust In many states, this document is used in place of a mortgage to secure the payment of a note.  
  17. Default Failure to meet legal obligations in a contract, specifically, failure to make the monthly payments on a mortgage.
  18. Delinquency Failure to make payments on time. this can lead to foreclosure.
  19. Down Payment Money paid to make up the difference between the purchase price and the mortgage amount.  
  20. Equity The difference between the fair market value and current indebtedness, also referred to as the owner's interest. The value an owner has in real estate over and above the obligation against the property.

 
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