, you may hear many terms with which you are not familiar. However, since a mortgage is such a large undertaking, it is essential that you understand the terms used by your lender. The following are some of the most common terms you will hear when applying for or refinancing a mortgage.
Accelerationthe right of a lender to demand immediate payment in full after the borrower defaults.
Adjustable ratean interest rate that varies according to market conditions.
Annual Percentage Ratea percentage that measures a loans full cost to the borrower each year.
Appraisala professional estimate of the value of the home securing the mortgage.
Borrowerthe individual applying for the mortgage.
Brokeran individual who arranges lending contracts for clients but does not actually lend the money himself.
Capa limit on how much an interest rate or payment can change in an adjustable rate mortgage.
Closinga formal meeting between the lender, seller, and buyer during which funds and property are legally exchanged.
Closing Costsextra expenses incurred by sellers and buyers when ownership of property is transferred.
Conventional Loana mortgage loan not backed by the VA or FHA.
Debt-to-Income Ratiothe percentage of a borrowers gross monthly income that must be paid toward revolving debts.
Down Paymentmoney put down on a mortgage to make up the difference between the purchase price and the final loan amount.
Fixed Rate Mortgagea mortgage with an interest rate that stays the same during the loan term.
Foreclosurethe process by which the lender repossesses property and sells it to recover a defaulted loan.
Mortgage Insurancemoney that insures a mortgage with a down payment lower than 20 percent.
Preapprovalthe process a lender uses to determine how much you can borrow before you apply for the mortgage.
Refinanceapplying for a new mortgage to replace your existing one.
To learn more about the mortgage process, or to apply for a mortgage loan, visit www.CreditNowUSA.com. CreditNowUSA can help you get started.
For more information, go to Mortgage Loan at http://www.creditnowusa.com/Mortgage-Loan
