Don’t let mortgage talk go over your head; stay educated by knowing these important terms!Let’s face it, when it comes to mortgages it’s easy to get confused. Hundreds of acronyms, government agencies and terms can leave your head spinning. However, when looking for a home it’s important to brush up on your mortgage lingo in order stay on top of your game. Luckily we can help! Check out this week’s mortgage terms!
- Adjustable-Rate Mortgage (ARM) - This specific type of loan has an adjustable interest rate that changes over time with the fluctuation of the market. Once the initial term has ended, the interest rate of this loan is subject to change, up or down, over time.
- Construction Loan- A short term loan used for financing the cost of construction. This loan is advanced to the builder periodically during the building process and is due at the conclusion of the construction project.
- Conventional Mortgage Loan- A loan that is not guaranteed or insured by the government.
- Fixed-Rate Mortgage- This type of loan has interest rates that stay the same for the entire life of the loan. Financing options for this loan are typically spread out over 10 to 30 years. Buyers have the security of knowing exactly what their loan payment will be for the entirety of the loan.
- Reverse Mortgage- A mortgage for homeowners 62 years of age or older who choose to tap into their home equity instead of making mortgage payments.
It is easy to get overwhelmed when trying to understand the mortgage industry, but now you can begin the road to homeownership with some background knowledge under your belt. If you are interested in learning more about the mortgage industry or taking out a mortgage of your own please contact a member of our Housing Buzz Team today.