Home equity loans can be a great idea for individuals looking to get out of debt or make necessary repairs on their homes. During the process, you will come across a variety of terms and acronyms. We have gathered together some of the basic terms that you come across during your home equity loan. If you have any questions about any of these terms, make sure to consult with your mortgage lender.
Adjustable Rate Mortgage (ARM): This type of mortgage has an interest rate that will change over time. Typically the interest rate will be lower than fixed mortgage products.
Amortization: Loan payments that will cover both principle and interest in one payment. Your lender will likely give you an amortization schedule outlining your payment schedule.
Annual Percentage Rate (APR): This is the cost of credit on a yearly basis.
Appraised Value: An appraiser will determine the value of your home based on experience, market data, and other information.
Cap: This is the limit on how much an interest rate can increase over the life of your loan.
Closing/Closing Costs: This is the final step in the real estate transaction. This would include the delivery of the deed, signing of the notes, and final disbursement of the funds. There will be various fees associated with a closing, such as attorney fees and taxes, that are called closing costs.
Depreciation: An overall loss on a property due to age, physical deterioration, and economic factors.
Discount Point: A buyer can pay the lender a set fee for a lower interest rate. This is usually a percentage of the loan itself.
Equity: This is the amount of money that you have vested in your home. This can be determined by subtracting the lien amount from the property's value.
Equity Loan: A loan or line of credit that is based on the amount of equity that you have in your home. Your home is essentially used as collateral.
Fixed Interest Rate: An interest rate that remains constant throughout the life of the loan. A fixed-rate mortgage will have the same interest rate and payments for the length of the loan.
Home Equity Line of Credit: Similar to a home equity loan, but you receive a line of credit that you can draw upon at any time.
Home Equity Loan: A loan based on the amount of equity you have in your home.
Interest: This is the cost for borrowing money.
Interest Rate: This is the percentage of the loan amount that you must add to your principle, for the privilege of borrowing money.
Loan-To-Value Ratio: This is the ratio between the amount of the loan and the actual value of the home. Some loans can give you up to a 125% Loan-To-Value Ratio.
Market Value: This is the price that buyers would be willing to pay for your home, at the present time. This can vary from the actual sale price of the home.
PITI (Principal, Interest, Taxes, and Insurance): This is the usual breakdown for mortgage payments.
Principal: The amount of your original loan before interest was added.
John Ross is a freelance author who writes articles about financial loans including: home equity loans company, online home equity loans, and fixed rate home equity loans. The Loanchbox is a user friendly website designed to inform beginners about home equity loans.
Refinancing a mortgage is simply taking out a new mortgage.... Read More
If you want a low interest, low payment mortgage refinance,... Read More
Few of us invest the time and effort into researching... Read More
"Instant Approval For Home Loans" is a common refrain for... Read More
Buying a home after a foreclosure is not an impossible... Read More
Every individual needs a home and every home needs an... Read More
Imagine paying your mortgage off in 15 years! Think of... Read More
Buying a home is usually the largest purchase any of... Read More
In previous decades, when a borrower missed a payment on... Read More
Today, FHA will loan up to 97 percent of the... Read More
When trying to obtain the best mortgage rate compare offers... Read More
Mortgage rates typically are based off the current rates of... Read More
A home equity loan is a loan that is guaranteed... Read More
If you are transferring to the Kings Bay Georgia Naval... Read More
If you have bad credit history, no down payment or... Read More
Shakespeare once said about human nature 'with nothing shall be... Read More
With today's relatively low interest rates and climbing property values,... Read More
The most basic distinction between types of mortgages that are... Read More
Fixed rate or adjustable rate mortgages are two choices of... Read More
The Research Rates of Agri MortgageFirst thing, when finding an... Read More
I decided to write this article today after closing a... Read More
A home equity loan allows you to cash-in on the... Read More
A house is just that, a house, until someone lives... Read More
Outlined below is a useful remortgages guide. Remortgaging has become... Read More
I read a press release the other day which points... Read More
Here are some mortgage tips that can help you obtain... Read More
People who are looking for a mortgage today have many... Read More
Unlike other investors, my venture into real estate was a... Read More
Escrow is one of the last stages in the purchase... Read More
When you're looking for a home loan, you might work... Read More
When you're shopping for a new home-especially for the first... Read More
The best home improvement loans usually aren't going to be... Read More
As a first time home buyer, there are several things... Read More
A Home equity line of credit is a loan which... Read More
Online high risk home mortgage lenders specialize in offering loans... Read More
For the last two years, interest rates have been much... Read More
If your down payment on a home is less than... Read More
If you have less than perfect credit and are looking... Read More
Have you ever noticed how hard it can be to... Read More
Home is the place you inhabit. It is the place... Read More
There are many benefits in choosing a remortgage, some of... Read More
No money down mortgage loans enabled more people to own... Read More
It is a common financial scenario across households in the... Read More
Are you looking for the best buy to let mortgages... Read More
When it comes to firsttime home buyer loans, a little... Read More
If you watch enough late night television, you'll see advertisements... Read More
The best way to explain why a mortgage professional is... Read More
Have you been turned down for a home loan recently... Read More
Buying your first home will likely be the biggest and... Read More
An Interest Only Mortgage is one where the repayments are... Read More
So, you've decided to buy a house, and you're ready... Read More
Add the term 'online' and it will open for you... Read More
Essentially there is little difference between the process that one... Read More
If you have low income and are looking to get... Read More
A 2nd mortgage loan after a bankruptcy is possible in... Read More
The information in your credit history helps mortgage lenders decide... Read More
Here is a useful guide to the different types of... Read More
The prospect of mortgage debt elimination is something that many... Read More
Have you ever heard of a mortgage broker before? If... Read More
With the low interest rates being offered by lenders today,... Read More
Everybody wants to own a house because it is something... Read More
Types of UK MortgagesYou may be wasting your money with... Read More
Financial difficulties are married to bad credit. It is a... Read More
You've found a house that is perfect for you. It... Read More
Loans are not of a recent origin. People used to... Read More
Do you want a mortgage loan for your new home?... Read More
Mortgage Refinance |