Terms and Topics
You'll Want to Understand

 A type of mortgage that allows the interest rate and monthly payment to change, usually as a reflection of changing rates in the U.S. Treasury Securities, at regular intervals throughout the life of the loan.

 In an adjustable-rate loan, the set time between changes in your interest rate or monthly payment.

 A thorough, written estimate of the current market value of your home conducted by a professional appraiser in accordance with set standards and cost comparisons.

 The cost of your loan expressed as a yearly rate.

 One-time costs, usually paid by the buyer, that must be met before a loan can be "closed" or completed.  Closing costs may include pro-rated interest and monthly payment, application fees, appraisal charges, title insurance, or other set expenses.

 95% loans, seller can contribute 3% towards closing costs and/or points.  90% loans, seller contributions cannot exceed 6%.  Private Mortgage Insurance can be added to the loan amount if the base loan is 90% or below.

 A special type of credit insurance, sometimes required by lenders that guarantees loan payments if you are disabled and can't work, or pays off your loan if you die.

 Allowable closing costs, if paid by the purchaser, can be financed in the loan.  Seller can pay up to 6% of the sales price for closing costs, prepaids, and/or points.  The up-front mortgage insurance can be financed in the base loan amount.

 A type of mortgage that locks in an interest rate over the life of the loan.

 Insurance that protects your home against theft, vandalism, fire, flood, or other types of damage.  A homeowner's policy equal to at least the amount of your unpaid mortgage balance is usually required by lenders to ensure the safety of your property during the life of your loan.

 In an adjustable-rate mortgage, a built-in safeguard that protects buyers against sudden or unusually large increases in the interest rate and subsequent increases in monthly payments.

 An interest in real property given as security for the payment of an obligation.

 A service charge or loan origination fee that's computed as a percentage of the amount of your loan.  One point is equal to one percent of the principal amount of a mortgage.  Points are due at the closing and may be paid by either buyer or seller on most loan programs.

 A policy that allows mortgage lenders to recover part of their financial losses if a borrower fails to fully re-pay a loan.  The advantage to the borrower is that mortgage insurance makes it possible to buy a home with as little as 5% down.

 The period of time between your mortgage application and the final closing.

 There is no limit on the seller contributions.  Anything the buyer has to pay in the way of closing costs or prepaids can be added to the loan if the property appraises for it.  This means the loan can exceed 100% if the appraisal supports it.

 The life of your loan - that is, the number of years before your mortgage is scheduled to be paid off.

 An insurance policy that protects you and your lender in case historical ownership of your land is unclear or a problem with title to the land can't be resolved.

 Seller can pay 6% over and above the normal closing costs.  the VA Funding Fee can be financed in the loan amount, or can be paid by the seller.