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8 Mortgage Terms You Need to Know

8 MORTGAGE TERMS YOU NEED TO KNOW DOWN PAYMENT: FIXED-RATE MORTGAGE: The payment a buyer makes with their own cash (not financed with a mortgage loan) toward a home purchase. A mortgage In which the interest rate Is "locked in" and will not change unless you refinance. ADJUSTABLE-RATE ANNUAL PERCENTAGE MORTGAGE (ARM): RATE (APR): A mortgage in which the interest rate can change over time based on various financial indices. An annual calculation that combines a borrower's interest rate with other home loan costs, like Insurance and fees. LOCK-IN: LOAN-TO-VALUE RATIO (LTV): Locking In an Interest rate with a lender means the mortgage is secured at a particular rate, even If rates Increase before closing. The amount of money being loaned in relationship to the home's value, displayed as a percentage. If a borrower puts down 20% of the appraisal price, then their LTV is 80%. PRIVATE MORTGAGE MORTGAGE INSURANCE INSURANCE (PMI): PREMIUM (MIP): Most lenders require the purchase of this ─░nsurance when a home's LTV is over 80%. The insurance policy used for Federal Housing Administration loans when a down payment is less than 20% of the home's value. Castle & Cooke MORTGAGE, LLC NMLS H1251─▒

8 Mortgage Terms You Need to Know

shared by Fusion360-2 on Jun 13
While one hardly needs to become an expert in every term that lenders use, knowing the basics can still be quite helpful when it comes to starting down the path to home ownership.


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