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Mortgage & Refinancing Information |
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Mortgage Terminology for the First Time Home Buyer
Buying a Home for the first time can be a little "nerve racking". Mortgage terminology that brokers use everyday can leave you scratching your head or shaking your head pretending that you know what they're talking about. Here are some mortgage terms and definitions that you"ll be hearing when shopping for a first time home buyer loan: Adjustable-rate loans, also known as variable-rate loans, usually offer a lower initial interest rate than fixed-rate loans. The interest rate fluctuates over the life of the loan based on market conditions, but the loan agreement generally sets maximum and minimum rates. When interest rates rise, generally so do your loan payments; and when interest rates fall, your monthly payments may be lowered. Annual percentage rate (APR) is the cost of credit expressed as a yearly rate. The APR includes the interest rate, points, broker fees, and certain other credit charges that the borrower is required to pay. Conventional loans are mortgage loans other than those insured or guaranteed by a government agency such as the FHA (Federal Housing Administration), the VA (Veterans Administration), or the Rural Development Services (formerly know as Farmers Home Administration, or FmHA). Escrow is the holding of money or documents by a neutral third party prior to closing. It can also be an account held by the lender (or servicer) into which a homeowner pays money for taxes and insurance. Fixed-rate loans generally have repayment terms of 15, 20, or 30 years. Both the interest rate and the monthly payments (for principal and interest) stay the same during the life of the loan. The interest rate is the cost of borrowing money expressed as a percentage rate. Interest rates can change because of market conditions.Loan origination fees are fees charged by the lender for processing the loan and are often expressed as a percentage of the loan amount. Lock-in refers to a written agreement guaranteeing a home buyer a specific interest rate on a home loan provided that the loan is closed within a certain period of time, such as 60 or 90 days. Often the agreement also specifies the number of points to be paid at closing. A mortgage is a document signed by a borrower when a home loan is made that gives the lender a right to take possession of the property if the borrower fails to pay off the loan. Overages are the difference between the lowest available price and any higher price that the home buyer agrees to pay for the loan. Loan officers and brokers are often allowed to keep some or all of this difference as extra compensation. Points are fees paid to the lender for the loan. One point equals 1 percent of the loan amount. Points are usually paid in cash at closing. In some cases, the money needed to pay points can be borrowed, but doing so will increase the loan amount and the total costs. Thrift institution is a general term for savings banks and savings and loan associations. Transaction, settlement, or closing costs may include application fees; title examination, abstract of title, title insurance, and property survey fees; fees for preparing deeds, mortgages, and settlement documents; attorneys' fees; recording fees; and notary, appraisal, and credit report fees. Under the Real Estate Settlement Procedures Act, the borrower receives a good faith estimate of closing costs at the time of application or within three days of application. The good faith estimate lists each expected cost either as an amount or a range When shopping for a first time home buyer loan make sure you shop around and find a broker or a loan officer that's responsive to your needs. And don't be afraid to ask question. Remember, it's the questions you don't ask that could keep you from saving money. Mortgage Terminology for the First Time Home Buyer was written by Dale Ronewicz (American-Lenders.org). For more on First Time Home Buyer Loans please visit:http://www.american-lenders.org/firsttime_home_buyer_loans/
MORE RESOURCES: How to refinance your mortgage and save money every month Business Insider Mortgage rates settle after an up-and-down week The Washington Post Report: More than 6.8 million homeowners can cut their mortgage payments with refinancing FirstCoastNews.com WTLV-WJXX More than 6.8 million homeowners can cut their mortgage payments with refinancing Frederick News Post How to know when to refinance your mortgage KIIITV.com Millennial mortgage refinances continue ascent National Mortgage News It may be time to refinance if it benefits you The Dallas Morning News Mortgage rates today, December 5, 2019, plus lock recommendations | Mortgage Rates, Mortgage News and Strategy The Mortgage Reports Ready to Refinance? County 17 Kent Woman mistakenly declared dead, can't refinance mortgage Darren Cunningham 6:05 PM, Dec 06 Fox17 Ask a mortgage expert: Tips about credit score, down payment, refinancing and more Reno Gazette Journal Here are the best and worst states to refinance Yahoo Finance Mortgage rate predictions: Could the experts be wrong again? | Mortgage Rates, Mortgage News and Strategy The Mortgage Reports Should I Refinance My Mortgage? | Millionacres Motley Fool Mortgage rates today, November 15, 2019, plus lock recommendations | Mortgage Rates, Mortgage News and Strategy The Mortgage Reports Mortgage rates today, November 20, 2019, plus lock recommendations | Mortgage Rates, Mortgage News and Strategy The Mortgage Reports Millennial refinance activity increases again in October Mortgage Professional America Mortgage rates today, November 12, 2019, plus lock recommendations | Mortgage Rates, Mortgage News and Strategy The Mortgage Reports Mortgage rates today, November 8, 2019, plus lock recommendations | Mortgage Rates, Mortgage News and Strategy The Mortgage Reports Sims Mortgage refinancing cuts SNF interest rate by 60% - Products McKnight's Long Term Care News Homeowners should skip holiday shopping and go mortgage hunting Loop North News Figure Closes Series C Round of $103 Million to Expand Lending Products and Executive Hires Business Wire The housing-backed investment vehicles that fueled the financial crisis are enjoying their best stretch in years Business Insider Nordic Access to Government Backed Mortgages Finally Improves Mortgage News Daily Mortgage credit eases in November, MBA says HousingWire Refinance or not? Getting a better deal isn't a slam dunk, but low rates offer compelling choices AZCentral How long does it take to refinance a mortgage? Bankrate.com Refinancing Share of Freddie's Volume Soared in October Mortgage News Daily 5 common myths about refinancing your mortgage Bankrate.com Millennial Refinancing Hits New Peak National Mortgage Professional Magazine The Perfect Mortgage Jewish Link of New Jersey Blockchain-based lending startup Figure secures $103M in new funding SiliconANGLE News Good time to refinance your mortgage? Fox Business What to know before refinancing your home loan The Washington Post Mortgage Credit Availability Up in November National Mortgage Professional Magazine What Is Mortgage Refinancing? Motley Fool Mortgage rates haven’t been this low since 2016 — here’s how to decide whether to refinance your home loan MarketWatch Refinancing my mortgage lowered my monthly payment by $200, but I wish I'd known 5 things beforehand Business Insider Can you still get stated income loans? | Mortgage Rates, Mortgage News and Strategy The Mortgage Reports Show Info: December 5, 2019 WJW FOX 8 News Cleveland Refinance mortgage rate moves higher for Monday Bankrate.com Nearly 6 Million People Are Eligible To Save Money With Mortgage Refinance, Report Finds Bankrate.com FHA's strong financial showing points the way on policy National Mortgage News Refinance mortgage rate moves up for Thursday Bankrate.com Refinance mortgage rates mixed for Wednesday Bankrate.com Odd Lots: Refis, DTIs and More Banker & Tradesman Refinance mortgage rate falls for Thursday Bankrate.com Refinance mortgage rate slides for Thursday Bankrate.com Refinance mortgage rate increases for Monday Bankrate.com Refinance rates fall for Wednesday Bankrate.com 4 irresistible perks of a VA mortgage refinance Bankrate.com 2019 HW Vanguard: Michael Schmeiser HousingWire Benchmark Mortgage now in Minot | News, Sports, Jobs Minot Daily News Is it time to refi? Amid lower rates, lenders say homeowners are jumping to refinance Allentown Morning Call Refinance rates advance for Monday Bankrate.com As mortgage rates plunge, should you refinance? Fox Business Refinance rates ease for Friday Bankrate.com Loan Characteristics Mostly Account for Conforming/Jumbo Spread Mortgage News Daily Refinance rates ease for Wednesday Bankrate.com Refinance mortgage rate retreats for Tuesday Bankrate.com |
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