Mortgage Terms To Know

Mortgage Terms to Know

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Here's a handy guide for you.

Mortgage terms can be confusing? Terms such as Fixed Rate and Adjustable Rate seem to have opposite meanings? This glossary explains mortgage terms in an easy-to-understand way.

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Equity

Equity is the amount your property is currently worth minus the amount of any existing mortgage on your property.  “Mortgage Key Terms.” Consumer Financial Protection Bureau, https://www.consumerfinance.gov/consumer-tools/mortgages/answers/key-terms/. … Read more

Credit History

Credit history is a record of your credit accounts and your history of paying on time as shown in your credit report. Consumer reporting companies, … Read more

Debt Ratio

Your debt-to-income ratio is all your monthly debt payments divided by your gross monthly income. This number is one way lenders measure your ability to … Read more

Credit Report

A credit report is a statement that has information about your credit activity and current credit situation such as loan paying history and the status … Read more

Appraisal Fee

An appraisal fee is the cost of a home appraisal of a house you plan to buy or already own. Home appraisals provide an independent … Read more

Bi-weekly Payment

In a bi-weekly payment plan, the mortgage servicer is collecting half of your monthly payment every two weeks, resulting in 26 payments over the course of the … Read more

Automatic Payment

Automatic payments allow you to set up recurring mortgage payments through your bank. Automatic payments can be a convenient way to make sure that you … Read more

Balloon Loan

For mortgages, a balloon loan means that the loan has a larger-than-usual, one-time payment, typically at the end of the loan term. This one-time payment … Read more

Co-signer / Co-borrower

A co-signer or co-borrower is someone who agrees to take full responsibility to pay back a mortgage loan with you. This person is obligated to … Read more

Annual Percentage Rate (APR)

An annual percentage rate (APR) is a broader measure of the cost of borrowing money than the interest rate. The APR reflects the interest rate, … Read more

Closing Disclosure

A Closing Disclosure is a required five-page form that provides final details about the mortgage loan you have selected. It includes the loan terms, your … Read more

Construction Loan

A construction loan is usually a short-term loan that provides funds to cover the cost of building or rehabilitating a home. “Mortgage Key Terms.” Consumer Financial … Read more

Conventional Loan

A conventional loan is any mortgage loan that is not insured or guaranteed by the government (such as under Federal Housing Administration, Department of Veterans … Read more

Second Mortgage

A second mortgage or junior lien is a loan you take out using your house as collateral while you still have another loan secured by … Read more

Security Interest

The security interest is what lets the lender foreclose if you don’t pay back the money you borrowed. “Mortgage Key Terms.” Consumer Financial Protection Bureau, https://www.consumerfinance.gov/consumer-tools/mortgages/answers/key-terms/. Accessed … Read more

Seller Financing

Seller financing is a loan that the seller of your home makes to you.  “Mortgage Key Terms.” Consumer Financial Protection Bureau, https://www.consumerfinance.gov/consumer-tools/mortgages/answers/key-terms/. Accessed 21 May 2021. Legal … Read more

Servicer

Your mortgage servicer is the company that sends you your mortgage statements. Your servicer also handles the day-to-day tasks of managing your loan. Your loan … Read more

Short Sale

A short sale is a sale of your home for less than what you owe on your mortgage. A short sale is an alternative to … Read more

Survey

A survey is a drawing of your property showing the location of the lot, the house, and any other structures, as well as any improvements … Read more

Title Service Fees

Title service fees are part of the closing costs you pay when getting a mortgage. When you purchase a home, you receive a document most … Read more