Last week, I explained some of the words that are commonly used in mortgage lending. This week, I will continue to help you gain a better understanding of some of the terminology you may hear when acquiring a mortgage through Fairway Independent Mortgage Corporation.
Home Equity Line of Credit (HELOC) – A loan against your home where the lender agrees to give a buyer a line of credit. The collateral is the borrower’s equity in his or her house. Generally, a HELOC is a second lien / mortgage behind the borrower’s first mortgage.
Interest Accrual Period – The period in which the interest due to the mortgage lender is calculated.
Jumbo Mortgage – A mortgage greater than Fannie Mae and Freddie Mac’s conforming loan limit which is generally $424,000.
Knowledge – A good mortgage planner will know all of their mortgage guidelines. It is important to hire someone who knows and understands the mortgage industry.
Loan-to-Value Ratio – The mortgage loan amount divided by either the selling price or appraised value of the home, whichever is less.
Maturity – The period of time until the last payment is due on a loan. In most cases, this is the term of the loan.
Note – Legal statement showing the terms of debt and a promise to repay it.
Origination Fee – A fee that a lender charges for evaluating and processing the loan. This is usually expressed as a percentage.
Payment Period – The frequency with which the borrower is obligated to make payments. In most cases, the payment period is monthly.
As a Mortgage Planner, I am happy to answer questions that you may have and provide you with more insight on loan programs that may be of interest to you. Call me today to set up a time when we can meet to discuss your home mortgage needs!
Tags: Mortgage Terms