Refinancing a home doesn’t need to be a complicated process. Half of the battle is knowing the terminology used in the mortgage and finance industries. Let’s take the guess work out of some of these terms by defining them:
Also called an ARM, this type of mortgage has an interest rate for a set time. During this period, the interest rate is lower. Later, the rate will adjust based on an index and will continue to adjust over time.
Annual Percentage Rate
This is either “fixed” or “adjustable”. This is the rate of interest that will be paid back to the mortgage lender.
This is a schedule for how the loan is to be repaid. It usually calculates the monthly breakdown of how much interest and principal you pay.
These are expenses paid by the home buyer during the mortgage closing. They can range from attorney and recording fees to points, escrow and title fees.
This is the difference between the amount of your mortgage loan and the value of your home.
This common type of loan has a set interest rate and loan term, typically ranging from 10 to 40 years.
This fee generally includes an application fee, appraisal fee, and fees for all subsequent costs of the loan.
This is the amount of money borrowed for the mortgage. The principal decreases as each mortgage payment is made.
Have questions? Feel free to reach out to Scott Bennett at 503-703-4699 or firstname.lastname@example.org to talk about your current situation.