Adjustable Rate Mortgage (ARM):
This type of mortgage that changes with the interest rates; monthly payments can fluctuate as determined by your lender, although it is most often subject to a rate cape.
Annual Percentage Rate (APR):
The cost if the loan calculated by its yearly interest rate which includes the interests, points, mortgage insurance and other fees associated with the loan.
A borrower will get a low interest rate on a mortgage for an initial fixed period of time, anywhere from 5 - 10 years, and after that, the balance is due or is refinanced by the borrower.
Bridge Loan (aka Swing loan):
A short-term loan secured through the house that is being sold to be used toward the closing cost or instruction of the new home that is being purchased.
Fees not included in the purchase price of a home that (typically) the Buyer pays to cover the transfer of ownership at closing.
The cash you use to buy your house, not what you borrow through your mortgage.
Earnest Money Deposit:
The money offered to a Seller to show you are more serious than the next guy...if your offer is accepted, it becomes part of the down payment; if it is rejected, it is returned; and if the Buyer pulls out if the deal it is forfeited.
Fixed Mortgage Rate:
The interest rate and all terms of this type of mortgage (and its payments) remain the same over the course of the loan.
interest rates fluctuate, so a lock is a guarantee by a mortgage lender promising that if you close the loan within a certain time frame, the rate won't change.
This is required, at the buyer's expense, by the lender if you make less than a 20% down payment of the purchase price. The lender is protected should you default on your loan.
Upside Down Mortgage:
The value of your house has lowered to where it is valued at less than the mortgage balance.
This is where proceeds form the sale of your house are less than the amount due to the Lender. The Lender decides it is better to sell the property at a moderate loss rather than foreclose on it. The Seller may still be liable for the remaining balance of the loan.
A legal process by which a Lender seizes the property of a home owner, usually due to the home owner not making timely payments on the mortgage that the property secures.
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