Do You Know These 6 Mortgage Terms You Should

Do You Know These 6 Mortgage Terms You Should



Do you​ Know These 6 Mortgage Terms? you​ Should
Do you​ recognize these mortgage terms? If you​ don't,​ you​ should get to​ know them now .​
These terms might help you​ recognize risk in​ your mortgage loan terms and mortgage process .​
They will also be beneficial in​ helping you​ decide if​ you​ are getting the​ right loan for your situation.
ARM (Adjustable Rate Mortgage) - a​ mortgage containing an​ interest rate that,​ after an​ initial period,​ can be changed by the​ lender .​
The majority of​ these contracts handle rate changes by evaluating a​ pre-determined interest rate index over which the​ lender has no control.
Due-on-sale clause - a​ provision of​ a​ loan contract that stipulates when the​ property is​ sold any outstanding loan balance must be repaid .​
This prevents the​ seller from transferring responsibility for an​ existing mortgage to​ the​ home buyer.
Equity grabbing - An unethical type of​ predatory lending where the​ loan provider purposely attempts to​ put the​ borrower into a​ loan that will result in​ a​ relatively quick default,​ so that way the​ lender can grab the​ borrower’s equity.
Good faith estimate - the​ standard form from a​ lender that details any and all anticipated settlement charges that the​ borrower should expect to​ pay at​ closing .​
The lender is​ required to​ provide this document within three business days of​ their receipt of​ a​ loan application .​
Pay close attention to​ these details and make sure you​ understand completely all of​ the​ anticipated fees.
Negative amortization - An increase in​ the​ outstanding loan balance,​ resulting from multiple monthly payments that are less than the​ interest due .​
Watch out for this type of​ loan .​
This kind of​ mortgage loan is​ very risky.
Rate protection - Protection for a​ borrower against the​ danger that rates will rise between the​ time the​ borrower applies for a​ loan and the​ time the​ loan closes .​
This could help your loan be safer for you​ and more secure,​ long term.




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