Terminology Of Home Mortgage Texas For New Home Buyers
The most primary terms used commonly in home mortgage Texas are explained below.
How do you view the process of applying for home mortgage Texas? Well it might be nerve racking. It is mostly because of the terminology you might feel overwhelmed. Since the brokers use this kind of language on a daily basis they do not find any problem with the process. But you cannot rely upon your broker entirely. This is the reason why you should have a hang of the most basic terminology and what it means.
1)Adjustable rate loans:
The adjustable rate loans in home mortgage Texas are also referred as variable rate loans. They offer a lower rate of interest in its initial stages as compared to the fixed rate loans. However, the rate of interest would fluctuate throughout the loan duration as per the market conditions.
2)Annual percentage rate:
Cost of credit that is expressed in the form of yearly rate is known as the annual percentage rate. There are different elements that it would include. They are:
a)Interest rate
b)Broker fees
c)Points
d)Credit charges which the borrower is indebted to pay
3)Escrow:
It means the neutral third party would hold the money or the documents prior to closing. It can be the account of the lender or the loan provider services. In this account a home owner would deposit the money for taxes as well as insurance.
4)Fixed rate loans:
Home mortgage Texas fixed rate loans have repayment terms. They are usually extended up to 15, 20, 30 or more years. The interesting part is that the interest rate as well as the monthly payments remains the same throughout the loan duration.
5)Rate of interest:
The cost at which you would be borrowing the money is expressed in a percentage rate. The rate of interest keeps fluctuating due to the market conditions.
6)Loan origination fees:
There is an amount which a lender charges as a processing fee for the loan. It is also expressed in the form of percentage in the loan amount.
7)Lock In:
It is a written agreement which guarantees the home buyer. This agreement carries two important things:
Specific rate of interest on which the home loan is provided
Points that are to be paid during the time of closing
The above mentioned terminology is the most primary. There are other difficult terms which are used in an agreement. However, you need to clarify your doubts with your broker.