The cfpbs glossary of english spanish financial terms. Adjustable rate mortgage arm a mortgage in which the interest rate is adjusted periodically based on a preselected index. A mortgage is an important part of your financial picture, and you want to make sure you pick a home that you can afford. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Mortgage terminology abandonment the voluntary surrender of property, owned or leased. Our glossary of mortgage loan terminology defines a variety of terms. Yet securing a mortgage to buy real estate can be a task. A mortgage is a debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a. The mortgage underwriter will approve or reject your mortgage loan application based on your credit history, employment history, assets, debts. Abandonment does not relieve obligations associated with ownership or lease. Its complicated and full of acronyms, terms and jargon, none of which you have much knowledge about. A fixedrate mortgage is a fully amortizing mortgage loan where the interest rate on the note remains the same through the term of the loan.
Mortgage terminology security national mortgage company. Basic mortgage terminology definitions of common mortgage terms one of the most important, and confusing, decisions that people make is buying a home and taking out a mortgage to pay for the house. This glossary of common financial terms was created and is used by the bureau for translating consumer education materials from english to spanish. The reason behind this is a lack of knowledge for the basic mortgage related terminology. A written promise to pay a sum of money at a stated interest rate during a specified term. An adjustablerate mortgage, also known as a variablerate mortgage, generally starts out with an interest rate lower than a fixedrate mortgage.
Cap the highest rate that an adjustable rate mortgage may reach. If you know the basic mortgage terms you will be able to flow with the home buying process with adequate knowledge. This glossary of mortgage terminology will help you get familiar with the home loan process. There are many factors that come into play for people looking to buy a house. Mortgage insurance mortgage insurance is a product that guarantees debt repayment in the event of permanent disability or death of the policyholder. The basic mortgage terminology 12 october, 2010 by bryan jaskolka. Part of doing your homework is learning the terminology of the mortgage industry. Here are definitions for some of the most commonly used terms within the financial lending industry, as well as links and summaries for key industry websites. Answers to common questions, helpful borrower tips, and fha guidelines to make your fha loan experience a predictable and simple one. The basic mortgage terminology canadian mortgages inc.
Essential bank domain knowledge for it professionals. Basic mortgage terminology pdf applying for a home equity loan is similar but easier than applying for a new mortgage. A reverse mortgage is a special home loan product that allows a homeowner aged 62 or older the ability to access the equity that has accumulated in their home. Definitions of common mortgage terms mortage terms. A mortgage loan that requires the remaining principal balance be paid at a specific point in time. Basic loan terminology, acronyms and resources basic loan terminology, acronyms and resources. Banking terms list of important banking terminology pdf.
The abstract consists of a synopsis of every recorded instrument affecting the title to that land arranged in chronological order of. There are a lot of people that sit down with a mortgage broker, and are unable to follow exactly what they are saying. Many professionals i know particularly those in it and engineering want to make a switch over to the banking industry, citing better pay and prospects. The right of the mortgagee lender to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor borrower, or by using the right vested in the due on sale clause. Mortgage terms courtesy of the canadian association of accredited mortgage professionals. One of the most important, and confusing, decisions that people make is buying a home and taking out a mortgage to pay for the house. The interest rate can change at a specified time, known as an adjustment period. With that in mind, here is a quick guide to ten basic mortgage terms, explained in language that any reasonably intelligent sixyearold should be able to understand. Understanding mortgage terminology will allow you to have a smoother home buying transaction. For more information, call 8774381199 to speak to one of our friendly mortgage professionals. Useful mortgage terminology to learn about and understand. Simple interest simple interest is calculated by multiplying the original loan amount or outstanding balance by the term duration of the loan and the rate of.
Basic mortgage concepts mortgage information mortgage. Here is a list of basic mortgage terms you should be familiar with. With that in mind, here is a quick guide to ten basic mortgage terms, explained in language that any reasonably intelligent sixyearold should be able to. Mortgage glossary archive zillow mortgage learning center. The note contains a complete description of the conditions under which the loan is to be repaid and when it is due. An amount equal to the replacement value of damaged property minus depreciation.
While the specifics differ from loan to loan, the basic tenet is that the borrower has been delinquent in making a payment on their loan default for a certain number of days or has failed to comply with one or more of the other terms of the promissory note. Its important to understand the terms used in mortgage transactions to decide if a certain loan is right for you. You will deal with mortgage options, credit reports, loan applications, contracts, points, appraisals, change orders. Failing to understand some of the terms could end up being quite expensive, so its important to get educated on the process before you begin. Housing apr annual percentage rate the total cost of a loan, including interest charges and product fees, shown as a percentage rate. To calculate your monthly mortgage payment, simply multiply the relevant number from the table below by the size of your mortgage expressed in divided by thousands of dollars.
A full list of mortgage terms can be found at the canadian association of accredited mortgage professionals website. Jun 01, 2016 failing to understand some of the terms could end up being quite expensive, so its important to get educated on the process before you begin. Basic mortgage terminology best home equity loans of 2019. Bridge loan a short term loan taken out against one property to finance the purchase of a new property. It can be expressed as the actual rate or as the amount of change allowed above the start rate. Mortgage payable office supply store utilities corporation taxes due. It can help you understand terms like adjustable rate mortgage and. Looking for basic mortgage terminology home builder construction loans pine river mortgage reit index purdue federal mortgage rates ptm in home loan premier mortgage. Here is a list of some mortgage related terms that will help you in your homebuying process. Biweekly mortgage a mortgage where 26 half payments, or full payments, are made annually. The most commonly used mortgage terms understanding.
Unfortunately for most of us, the mortgage field is jammed with jargon and fraught with fiscal pitfalls. Adjustable rate mortgage loan arm these are mortgages where the interest rate changes based on market conditions. Adjustablerate mortgage arm an adjustablerate mortgage, also known as a variablerate mortgage, generally starts out with an interest rate lower than a fixedrate mortgage. If you want smaller mortgage payments, you can increase the amortization period to 30 years maximum.
This saves you money early on, and may help you qualify for a more expensive home. A mortgage insured by the fha that protects a lender if the borrower defaults on the loan. Mortgage dictionary glossary of key mortgage terms the. Bridge loan a bridge loan is a shortterm financing that is used by borrowers between the purchase and sale of a real estate property. Assuming a loan can usually save the buyer money since this is an existing mortgage debt, unlike a new mortgage where closing cost. Introduction listening and responding to consumers is central to the bureau s work to educate and empower. But making this leap to homeownership is a big step, and its one that should be taken with careful. Your stepbystep mortgage guide freddie mac singlefamily. Basic mortgage terminology definitions of common mortgage terms. Zillow group is committed to ensuring digital accessibility for individuals with disabilities. More than likely, your mortgage professional is throwing many new terms and expressions your way. The main reason to take out a home equity loan is that it offers a cheaper way of borrowing cash than an unsecured personal loan. The guide is an important resource that will help to create a much greater understanding of. Bridge loan a short term loan taken out against one property to.
Ortgage arm also known as a variable rate loan, an arm usually offers a lower initial rate than a fixed rate loan. Basic terminology ina immigration nationality act uscis us citizenship and immigration services homeland security foreign national a foreign national is a person who is not a citizen of the us. If a mortgage contains a dueonsale clause, it may not be assumed by a new buyer. Mortgage terminology mortgage training loan originators. If you own or want to own real estate, you need to understand mortgages. Department of veterans affairs to help vets and their families obtain home financing. Mortgage glossary basic mortgage terminology fk capital fund. The interest rate will be tied to some index such as the prime rate for example.
For example, a loan may be amortized as if it would be paid. Mortgage broker a mortgage broker is a professional who acts as an intermediary between homebuyers and financial entities and helps clients to find a suitable mortgage product. See private mortgage insurance or fha mortgage insurance. If you fail to make your payments, you may lose your house. Basic mortgage terminology pdf best home equity loans of 2019. This az pocket guide to understanding financial terms is just one of the achievements of ebss partnership with nala. Trying to figure out the path to owning the home or property of your dreams. A mortgage is different in several ways, but notably, mortgages are falling out of use due to the difficulty in. The most commonly used mortgage terms understanding mortgage. Mortgage terminology 101 granite state credit union. The loan is underwritten based on the value of the collateral home and the life expectancy of the borrower. A mortgage is commonly used to describe bank loans secured by real estate, but in california and many other states, a deed of trust is used rather than a mortgage.
Once you understand basic mortgage terminology, you will better be able to make the best choices for your individual situation. In fact, when you think about buying a house or refinancing your mortgage, you feel like a college freshman entering his or her. An index is the interest rate fluctuation timetable for the adjustable rate mortgage. The mortgage underwriter will approve or reject your mortgage loan application based on your credit history, employment history, assets, debts and other factors. A mortgage is different in several ways, but notably, mortgages are falling out of use due to the difficulty in processing a foreclosure proceeding. The calculation assumes that you maintain the mortgage for the full term. There are many factors that go into applying for a mortgage. A lender may permit early payout of a closed mortgage under certain circumstances but will charge a prepayment. Flexible mortgage a closed mortgage agreement does not provide options for payout before the maturity date. A mortgage in which the vendor uses his or her own equity to provide some or all of the mortgage financing in order to sell the property. Generally, there are three basic mortgage programs. Mortgage dictionary adjustablerate mortgage an adjustablerate mortgage arm is a product with a floating or variable rate that adjusts based on some index. Basic mortgage terminology pdf best home equity loans of. Apr is an industry standard calculation and enables direct comparison of mortgages from all lenders.
Amortization amortization is a decrease in the value of assets with time, which is normally the useful life of tangible assets. A condensed history of the title to a parcel of land. The basic result is that instead of making twelve monthly payments during the year, you make thirteen. Usually relates to a decrease in taxes or payments due. Therefore, the following is a blog entry that encompasses a. Assumption an agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Financial statements financial statements written reports that describe the financial health of a company. The lender will ask you for much of the same information as it would when applying for abn mortgage rates a mortgage. Though the va does not directly originate these loans, they establish the rules for those who may qualify, dictate the terms of the mortgages offered and insure va loans against default. After all, it would be disappointing to look at a home only to discover you cant afford it.
You will deal with mortgage options, credit reports, loan applications, contracts, points, appraisals, change orders, inspections, warranties, walkthroughs, settlement. Fixed rate mortgages a fixed rate mortgage is where the rate of interest and payment amount are fixed for a specific term. Mortgage underwriter the mortgage underwriter is the professional authorized to assess if you are eligible for the mortgage loan you are applying for. Mortgage insurance a contract that insures the lender against loss caused by a mortgagors default on a government mortgage or conventional mortgage. A mortgage is a debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments. The mortgage business seems to have its own language. Income statement financial statement of a business that reports the revenue, expenses and the net income loss of. However, since banking is a significant part of our business and personal life, it is useful for consumers to learn some common banking terms.
Each lender will follow roughly the same steps when assessing your application. Basic mortgage concepts mortgage information mortgage terms. Mortgage broker an individual or company that brings borrowers and lenders together for the purpose of loan origination. Apr the annual percentage rate is the cost of borrowing money from the lender, shown as a percentage of your mortgage amount. Money paid to insure the mortgage when the down payment is less than 20 percent. Blanket mortgage a single home loan used to provide financing for multiple properties, such as rental units. Basic mortgage terminology pdf it is recommended for financing major oneoff expenses, including home renovations or repairs, medical bills, repayment of credit card debt, or funding college tuition. Adjustablerate mortgage an adjustablerate mortgage arm is a product with a floating or variable rate that adjusts based on some index. Basic loan terminology, acronyms and resources universalclass.
Having launched it originally in 2004 we have now updated it with modern terminology to meet with the increasing demand for the book. How to talk the talk buying a home can be exciting. Federal housing administration fha loans, department of veterans affairs va loans and conventional mortgage loans. A contract in which a borrowers property is pledged as security for a loan that is to be repaid on an installment basis. Beginning to search for your dream home can be a lot more successful if you are already preapproved for a mortgage. Mortgage terminology explained when you first apply for a mortgage, you may feel youve stepped into a different culture with a language all its own. In order to get the best deal for your mortgage you need to do your homework and shop around. Oct 25, 2016 purchasing a home and conquering financial responsibility is a goal for many people.
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