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9 Loan Terms You Need to Know

9 Loan Terms You Need to Know

The path to homeownership often leads to frustration for home buyers when it comes to understanding the financing portion. It helps to let a mortgage specialist like Midland Mortgage assist you with the process. Take a look at some basic terms used in lending. This should ease your confusion when discussing options with your specialist.

What you need to know

Mortgage - The loan obtained to purchase a home. Different mortgage options include:

  • Fixed Rate Mortgage -This mortgage establishes a flat rate and term that lasts to the end of the life of the loan.
  • Adjustable Rate Mortgage - The rate for this mortgage only lasts for a limited period. Once that period ends the rate varies depending on the market or other outside factors.

Principal - The amount taken out for a mortgage.

Down Payment - The portion of the purchase price paid up front.

Buy Down - Home buyers looking to lower their interest rate pay money up front in exchange for lower mortgage payments. Buyers purchase "points" that represent a percentage of the mortgage amount.

Closing Costs - The amount paid by the buyer covering any fees from the mortgage process.

Escrow - Home taxes annually set aside and held by the lender.

Equity - Your stake in the home that's 100% yours. This is the difference between the value of your property and the amount still owed on your mortgage.

How Midland Mortgage can help

Midland Mortgage Corporation works with buyers to provide financing solutions that meet their individual needs. Reach out online for more information and let us answer your questions on how we can get you into your dream home.

Posted Nov 23, 2017 by Midland Mortgage Corporation