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 İnsurance 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 H1251ı http://www.bankrate.com/finance/financial-literacy/22-most-commonly-used-mortgage-terms-1.aspx https://www.ziprealty.com/learning-center/10-must-know-mortgage-terms.jsp