Basic mortgage terms to help get you started:
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Fixed Rate Loan
This is a loan in which your monthly payment stays the same every month because the interest rate is fixed. |
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Variable Loan (also called an ARM)
This loan starts with a lower initial interest rate. The rate can go up or down based on the current interest rates. There will be a cap on how much it can go up. |
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FHA Loan
This is a government loan that is based on the location of the home or the income of the purchaser. Many first time homebuyers can benefit from this type of loan. |
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VA Loan
This is a loan for veterans. |
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PMI
This stands for Private Mortgage Insurance. Lenders require that the buyer pays this if they are putting less than 20% down. We will help you with ways to avoid paying this. For example, you can take one loan for 80% and another for 15% and only put 5% cash down. |
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Closing Costs
This includes lender fees, prepaids, and settlement costs. Closing costs can be negotiable between the seller and buyer. The buyer must also purchase a homeowner's insurance policy. |
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