Whether you are a reverse mortgage McAllen TX or a home buyer, you must learn what are the essential terms related to mortgage financing. Starting from the preapproval and prequalification process to the moment you receive the preapproval letter- the complete procedure includes multiple terms and abbreviations. Knowing them helps you understand the process well and get into it properly.
So, let’s know about the essential terms.
ARM or Adjustable-Rate Mortgage
A mortgage with an initial low rate that gradually is adjusted as per the value of the funds to the lenders.
APR or Annual Percentage Rate
it is the equivalent of a rate of interest when the rate is mentioned more than just once in a year. The buyers can compare different mortgages considering this value for each loan.
Down Payment
The amount you have to pay as a buyer in cash which is not financed with the mortgage.
FHA Loan or Federal Housing Administration Loan
This is a loan insured by the Federal Housing Administration. Being a qualified buyer, you can avail of this loan. Although the size of the loans is limited, you can purchase a standardly-priced home with it.
Pre-approval
The process of verifying the details of the buyers before lending the mortgage loan for buying homes.
Pre-qualification
Another process like pre-approval to determine how much money the buyer can borrow as per his/her eligibility.
PITI
It is the short term for the total monthly housing expenses. It includes- principal, interest, taxes, and insurance. PITI is a must-known term in the areas of mortgage lending.
Title Insurance
It is insurance that protects any real estate owner or lender if any loss or damage they experience because of the liens or any flaws in the title of the property.
Mortgage Insurance
The amount of money paid to insure the mortgage when the amount of down payment is less than 20%.
Collection Agency
It is an entity that helps lenders, businesses, and individuals to collect delinquent accounts.
Reverse Mortgage
It is a type of loan which helps aged homeowners to utilizefunds from their built-up equity systems. No payment is due until the borrower shifts or dies, in some cases, if the property is sold. Also, with this loan, one can be sure about the final payment not exceeding the proceeds from the sale of the home.
Learned the essential details? We hope now the process of mortgage financing will become easy for you. Buy or lend securely and comfortably. For more visit – www.bestrgvhomeloans.com
