It is important to understand mortgage terminology, since the home buying process can leave your head spinning.
The following list contractors some mortgage lending that will help new homebuyers choose the best mortgage possible as well as understanding the entire home buying process.
Annual Percentage Rate (APR) shows the monthly cost of the mortgage, which includes points, interest and mortgage insurance in a percentage format.
Adjustable Rate Mortgage (ARM) is a type of loan that begins with a lower interest rate for an introductory period (usually three years), and later adjustments to whatever the current interest rate is at the time of the adjustment.
Credit Report is a record of your credit history, including payments, previous debts, and other financial details, all of which are given a score. These scores are binding to getting approved for your mortgage.
Fixed-Rate Mortgage is another type of loan where the monthly payments stay the same through the life of the loan.
Mortgage Broker is an individual or a company that originates and processes loans for many different lenders. These people will 'broker' the mortgage for you.
Mortgage Lender is a financial institution that loans you money for your home or refinance needs.
Mortgage Insurance is purchased by the buyer to protect the lender in the event someone defaults on the mortgage and / or payments.
The Real Estate Settlement Procedures Act (RESPA) is a law that protects consumers during the home buying loan application process. Among other things, it requires lenders to make full disclosures about settlement costs and conditions.