Below are some of the most important mortgage terms that you should know. If you have any questions about these terms or their meanings, please feel free to contact us.
Adjustable Rate Mortgage
A mortgage that has an interest rate that varies based upon an index and margin. It is often abbreviated as ARM.
This is a method of paying off a loan by making equally sized periodic payments.
Annual Percentage Rate
Interest rate that is annualized. It’s often abbreviated as APR.
Interest that is prepaid at closing, which will reduce the total interest rate.
Down Payment Assistance Program
These programs help buyers to make the purchase of a home by assisting them with the down payment.
A loan that is insured by the FHA, or Federal Housing Administration. It is available to any qualified home purchaser.
FHA Mortgage Insurance
Mortgage insurance helps to protect the lender in case the borrower defaults, and there are two different kinds of FHA mortgage insurance that are mandatory on FHA loans.
First Time Home Buyer Program
A program that offers people who have never bought a home special terms, in order to entice them to become homeowners.
An interest rate that is published, and that lenders use in order to adjust their annual percentage rate for adjustable rate mortgages.
The total amount a lender adds onto the index in order to establish what is known as an adjusted interest rate.
Someone who helps to arrange a mortgage loan and assists in the negotiations of the contracts.
Typically paid on mortgages that have a down payment of less than 20 percent.
An acronym that accounts for the total expense of owning a house in each month. It stands for Principal, Interest, Taxes and Insurance.
Piggy Back Loan
A term that describes two mortgages that close concurrently. It is very hard to get a piggy-back loan in our current economic times.
USDA Rural Home Loan
A loan that is guaranteed by the USDA, which helps homebuyers to obtain a home without making a down payment.
A mortgage loan that is offered to veterans of the United States military, as long as they meet certain eligibility requirements. Typically a VA loan will mandate a small down payment or no down payment at all.