In order to help you understand mortgages a little better, here is a list of some frequently used terms.
- Borrower - The person borrowing the money to purchase or refinance a home
- Interest - The finance charge the borrower pays to use the Lender's money to purchase the Property
- Lender - Usually a bank or financial institution who offers the mortgage to the borrower
- Mortgage - An agreement where a homeowner pledges an interest in their property as collateral for a loan on that same property
- Point - A point is 1% of the loan amount. Sometimes a borrower will pay a point (or more) to receive their loan
- Principal - The loan amount
- Property - The home or piece of real estate being financed
- Term - The length of time scheduled to repay the loan (usually 15 or 30 years)
Because there are many different kinds of mortgage loans available, and home-buying programs vary by state, it's important to work with a LendRIGHT Lender who will work with you to ensure you are in the right loan for your situation.
They will take the time to learn about you, the property you are interested in and will research and advocate on your behalf. A good lender also will make sure that you know all of the options available to you. This enables you to make good choices and select the load that is right for you.
The financing of your home is one of the most critical steps in your home-buying experience. So it is best to meet with a lender BEFORE starting your home search. You can understand what your mortgage options are, and how much house you can afford. So look for a LendRIGHT lender first, and then look for a home.