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Mortgage Terms: What You Need To Know:new myfi shortcodes Mortgage
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The average homeowner lives in a home for 10 years, according to the 2019 Profile of Home Buyers and Sellers from the National Association of Realtors. This means that, not counting refinances, the typical homeowner is exposed to mortgage jargon once each decade.
That’s not enough to become fluent in the language of home finance. But it’s a good idea to learn as much as you can about mortgages. That way, when loan brokers ask, “Do you want to escrow that?” you will have some idea of what they’re talking about.
Below are some of the terms you’ll run across when applying for and taking out a home mortgage loan.
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Annual percentage rate. Also called the APR, this measures the annual cost of a loan to the borrower and is the best way to compare costs between lenders. It includes mortgage insurance, discount points, loan origination fees and other costs.
Appraisal. An estimate of a property’s value by a professional appraiser, often required by a mortgage lender before making a loan.
Assessed value. The value of a piece of real estate as set by taxing authorities.
Assumable loan. A loan that can be taken over or transferred to a buyer.
Balloon payment. A final, larger than usual payment at the end of a loan.
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First Published: May 27, 2020, 11:36am