Learning about different loan programs and pre-qualification requirements can feel like you’re drinking from a fire hose. It’s a lot of information! In this post, I’ll break down a couple (of the many) different loan terms and programs…

  • Adjustable-Rate Mortgages (ARMs) – Have a vHouse owner/real estate agent giving away the keysariable interest rate and the monthly payments are calculated on a regular basis to reflect changes in the market interest rate.
  • Appraisal – A written estimate of a property’s current market value prepared by an ‘appraiser’
  • Balloon Mortgage – A mortgage which is payable in full after a period that is shorter than the term. In most cases, the balance is refinanced with a lender. On a 7-year balloon loan, for instance, the payment is usually calculated over a 30-year period, and the remaining balance at the end of the 7th year must be repaid or refinanced at that time.
  • Blanket loan – A mortgage covering several structures on one parcel of land.
  • Conventional Mortgage – This mortgage is equal to or less than the loan limit set by Freddie Mac or Fannie Mae. Typically require at least 5% down-payment (WA). May be a fixed-rate or adjustable-rate mortgages.
  • FHA Mortgage – This program was designed to increase home ownership by families and first-time homebuyers. This loan requires a smaller down-payment (3.5% minimum in WA). It can offer greater flexibility in lending guidelines.
  • FH 203(k) Rehab Loan – The costs associated with ‘rehabing’ and improving a home can be included in the financing of the purchase, or in the refinancing of a current home.
  • Fixed rate mortgage (FRM) – This features a fixed interest rate and loan amount. This means that the monthly payments are the same every month for the entire loan length.
  • Homeowners Insurance – Insurance purchased by the borrower, and required by the lender, to protect the property against loss from fire and other hazards
  • Interest Rate – The rate charged to the borrower each period for the loan of money.
  • Mortgage Insurance (PMI) – Insurance against loss provided to a mortgage lender in the event of the borrower defaulting.
  • PITI – Abbreviation for components of the monthly housing expense: Principal, interest, taxes and insurance.
  • Principle – The portion of the monthly payment that is used to reduce the loan balance.
  • Underwriting – The procedure of examining all the data about a borrower’s property and transaction to determine whether the mortgage applied for by the borrower should be issued.
  • USDA – Offered in rural areas to help lower-income households gain access to home loans at reasonable interest rates. Typically need a higher credit score to qualify.
  • VA – This program is only available to Veterans, active-duty personnel, reservists/Nation Guard members, and some surviving spouses. This program allows 0% down payment!

For more information regarding lending options, questions, or opportunities, feel free to e-mail me @ CanfieldHomes@gmail.com, so I can easily get you in touch with a licensed lending professional.

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