SportsRelocation.com - Mortgage Terms and What They Mean
Simplifying the Terminology For You
We at SportsRelocation.com have been in the real estate business for quite a few years. Before we became the number one relocation business for professional athletes we got our start in real estate and still a great deal of our business is real estate related. It has come to our attention over the years that the average citizen is quite confused by the terminology used in real estate transactions and for that reason we thought we would give you a quick tutorial on some of the terms you might encounter the next time you face relocation.
- Annual Percentage Rate (APR): the rate of interest for one year which includes charges on the mortgage loan and interest payment
- Adjustable Rate Mortgage (ARM); a particular home loan where the interest rate and monthly payment are adjusted occasionally depending on the current index.
- Credit score: a number that reflects how much of a credit risk you are; it is based on past credit history
- Closing: the final step before moving into your new home; this includes transferring title to the new buyer, signing the loan documents and receiving the loan from the lender.
- Closing costs: fees paid by the person borrowing at closing.
- Fixed rate mortgage: a home loan where the interest rate remains the same for the life of the loan.
- Private mortgage insurance: a protection for the lender in case the borrower defaults on the loan.
- Rate lock/lock in: a commitment that the interest rate will be locked into a particular rate for a period of 30 days or 45 days until the closing date.
- Debt-to-income ratio: used by lenders to decide if a borrower can handle the mortgage payment.
- Escrow account: a bank account where the lender places a part of the monthly mortgage payment to protect against property taxes, mortgage insurance and homeowners insurance.
Before you even consider getting a home loan make sure you are clear on these terms and if you are not find yourself a real estate agent/broker who will take the time to go over each of them with you until you do understand. Home mortgages are too large and too important for you to have confusion while signing the closing papers.
If you have any questions about this or other real estate issues, give us a call at SportsRelocation.com. Remember, we have been in the real estate business for decades and if anyone can answer your questions it’s the pros at SportsRelocation.com.
SportsRelocation.com® assists players/coaches of the NBA, WNBA, NFL, MLB, NHL, and Entertainers relocate nationwide by servicing your Real Estate & Relocation needs.
The Sports Relocation team is waiting to hear from you. Our primary goal is to assist you with all of the challenges related to transitioning into your new home. Visit us at http://www.SportsRelocation.com or call us at 800.783.1421