subject: A Mini Mortgage Library To Help You Understand Mortgage Terms [print this page] If you're looking to buy a house, you'll want to have access to a good mortgage library. Educating yourself on the do's and don'ts of buying a home is important. Everyone wants to wrangle the best possible deal and mortgage terms are definitely confusing.
1) Broker: Broker is the first term in a mortgage glossary to understand. This is the person that is going to bring you together with the bank to create the mortgage transaction. In real estate terms, an agent will work for a broker. A few other terms revolve around what's going on with the property itself.
2) Mortgage: A legal document that connects the property to the lending party.
3) Deed: Then there is a deed, which is the legal document of title for a property.
As you look through a mortgage library, you'll want to make sure you find other terms so you'll know what kind of loan you'll be looking at.
4) Escrow: An escrow is a money deposit that will be delivered to the seller after a transaction has been closed.
5) Amortization: This refers to how the loan payments are divided between the amount being paid on the principal loan amount and how much is being paid on the interest.
The part of buying a property also involves familiarizing yourself with some of the words in the mortgage glossary.
6) Appraisal: An appraiser will examine the home and the property and determine a value for the property based on multiple factors including the values of other homes in the area.
7) APR: When obtaining a loan, the APR or annual percentage rate is important. This is the percentage that will be paid to the loan, which can have a significant impact on the total cost of the mortgage payment each month. You want to try and get the lowest APR possible, and this is where your broker may be able to assist you.
8) Closing: There is also the closing. When all documents are signed, money changes hands and a mortgage has officially been signed, this is referred to as a closing.
In the event that your mortgage doesn't work out as planned, the final two mortgage terms you need to be familiar with is refinance and bankruptcy.
9) Refinance: This is a way to create an entirely new mortgage to achieve a better interest rate so your overall price for the property is reduced. You may have to pay new closing costs but the amount saved is usually substantially more and monthly payments can be reduced dramatically.
10) Bankruptcy: In a mortgage library, bankruptcy is the worst term because it means that a person is unable to make payments and files a motion with the court to be absolved of financial obligations.
These are but a few of the most basic terms you'll want to know when looking for a mortgage. There are many other important terms, and finding a good source for mortgage information will provide the confidence and knowledge you need to proceed.
