What is a mortgage?
A mortgage or home loan is a financial contractual agreement between a borrower and a mortgage company in which the real estate property is used as collateral to secure the loan. The mortgage lender can take possession of the property if the borrower fails to make the scheduled mortgage payments.
What is a mortgage refinance?
A mortgage refinance is a home loan in which a borrower pays off the existing mortgage with a new lower interest rate home mortgage loan.
What is a home loan?
Home loan: see definition for mortgage
What is a home equity loan?
Existing homeowners with built up equity in their homes can get a loan secured against the equity in the home. Home equity loans can be used for various purposes, including home improvements, debt consolidation, home renovations, college tuition, and other major purchases or expenses.
What is a home equity line of credit or HELOC?
Home equity lines of credit or HELOCs permit the borrower to get several advances of the home loan proceeds up to a certain percentage of the borrower’s equity in the home. HELOCs give the homeowners the flexibility to access money on an as needed basis.
What is a second mortgage?
Another mortgage loan in addition to the existing mortgage. The second mortgage is subordinate to the first mortgage usually with a higher interest rate and a shorter loan term.
What is a reverse mortgage?
Reverse mortgages are home loans used during retirement to provide additional cash flow to meet expenses. The mortgage company makes scheduled payments to the borrower until the death of the borrower, after which the real estate property is sold in order to repay the loan.
What is a mortgage lender?
A mortgage lender is a financial institution that provides borrowers with the financing needed to secure a real estate property. In return, borrowers make scheduled installments payments to the mortgage lender which includes principle, interest, and any fees.
What is the difference between a mortgage broker and a mortgage banker?
A mortgage broker is the middleman who facilitates the home loan between mortgage lenders and borrowers.
What is a mortgage principle?
This is main balance on your mortgage that is owed to the mortgage lender
What does APR mean?
Annual Percentage Rate ( APR ) is the annual interest rate charged on the home loan which is a percentage of the loan. Includes all fees charged by the mortgage lender.
What is a fixed rate mortgage?
A fixed rate mortgage is a home loan that is fixed for a set period. Usually, the shorter the period the lower the interest rate of the mortgage.
What is the adjustable rate mortgage?
Adjustable Rate Mortgages (ARM) has adjustable Interest rate that fluctuates according to prevailing financial market conditions.
What is an interest-only mortgage?
A home loan where the borrower only repays the interest on the principal amount borrowed for a fixed period of time.
What is an amortized mortgage?
Amortized Mortgage is a loan in which the principal and interest are payable in monthly or periodic installments during the tenure of the home loan.
How do you calculate LTV or loan-to-value ratio?
The loan-to-value ( LTV ) ratio is between the amount of a given home loan mortgage and appraised value or a lower sales price. LTV ratios can be easily calculated with professional mortgage calculators.
What are lender fees?
These fees charged by the mortgage lender which may include, but are not limited to, things such as document preparation, appraisal costs, and application costs.
What is the Truth in Lending Act?
The Truth in Lending Act is a federal law that ensures borrowers are disclosed with detailed information with regards to the costs of a mortgage, including the amount financed, the APR, and all finance charges.