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Definition
| fee charged for borrowing money -- varies among lenders |
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Term
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| annual interest rate -- use this number to compare loan rates. The lower the APR, the better the loan rate. |
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Term
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Definition
| Home load which has an interest rate that stays the same throughout the term of the loan |
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Term
| Variable or Adjustable Rate Mortgage (ARM) |
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Definition
| Home loan which has an interest rate that can change during the term of the loan |
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Term
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Definition
| Fees charged for the use of the loan (in addition to interest). One point is equal to one percent of the loan amount. A $100,000 loan with 2 points equals $2,000 in point fees. |
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Definition
| The period for the loan repayment -- normally 15 or 30 years. Usually 15 year loans will have a higher monthly payment, but the total interest paid will be substantially less. |
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Definition
| Formulas used by lenders to determine the maximum load amount an applicant can afford to repay |
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Term
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Definition
| A guarantee that you will receive the interest rate quoted at the time of application if the loan closes before the lock-in expires. Lock-in rates are usually good for a set period of time, such as 60 or 90 days. |
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Term
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Definition
| Charges for obtaining the loan and transferring the real estate title. These costs are in addition to the price of the property and interest. Usually, these must be prepaid on the day escrow closes -- either by the seller or buyer. |
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Term
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Definition
| (also called escrow account) The buyer makes monthly payments to the lender for home owners insurance and taxes. The lender then pays these bills when they are due. There is no charge for this service and the impound payment is paid as part of the monthly mortgage payment. |
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Term
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Definition
| A financial penalty for paying off a loan before the end of the term. This is an important consideration for members of the military, as you may need to relocate and sell the house. |
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