A mortgage having an interest rate which is usually initially lower than that of a mortgage with a fixed rate but is adjusted periodically according to the cost of funds to the lender.
The annual equivalent of a rate of interest when the rate is quoted more frequently than annually, usually monthly. APR allows homebuyers to compare different mortgages based on the annual cost for each loan. Not all lenders calculate APR the same way.
A professional opinion of the market value of a property.
The lender has verified a borrower’s credit, bank references and employment, and approved a target mortgage loan amount and sales price prior to the borrower buying a home. Subject to other conditions (i.e., property appraisal) and is not binding on the lender.
One percentage point of the principal of a mortgage loan that some lenders require borrowers to pay immediately as a condition of making the loan. That is, if the lender makes a mortgage loan, it may require the borrower to pay a certain amount of discount points up front. The amount paid is deducted from the interest the borrower would otherwise owe on the loan. Discount points are tax deductible for the borrower because they qualify as prepaid interest.
The portion of the purchase price which the buyer pays in cash; is not financed with a mortgage.
Funds given to buyers to assist with the purchase of a home. Buyers do not have to repay these funds.
The holdings of documents and money by a neutral third party prior to closing.
A loan insured by the Federal Housing Administration open to all qualified home purchasers. There are limits to the size of FHA loans, but they are usually generous enough to handle moderately-priced homes.
Mortgage loans with special qualifying terms for those who have never owned real estate or have not in the past few years. Although the programs and terms vary by state, they often offer down payment and closing cost assistance.
The benchmark interest rate an adjustable-rate mortgage’s fully indexed interest rate is based on.
A legal claim against a property that must be paid when the property is sold.