How to Understand Mortgage Jargon
Mortgage Terms and what they Mean
Challenge your word vocabulary and boggle your mind. Understanding the financial world of home ownership is much easier with a good mortgage consultant, who can guide you through the lending options.
Mortgage products are forever changing to provide more selection, more features and more confusion! Know the terminology and know what you are getting into, that’s the bottom line.
Residential mortgages comprise most of today’s mortgage business. There are many types of creative financing options for the homebuyer to consider. Additionally, there is a vast array of mortgage consultants with tremendous financing knowledge at their fingertips.
Familiarizing yourself with phrases such as “term of interest” and “life of your mortgage” is highly important if you wish to have a life after signing the paperwork for your mortgage.
The legwork to find the right home for your family is time consuming, fun and most often involves asking lots of questions to get exactly what you are looking for. Likewise comparison-shopping when looking for a mortgage is essential. Attractive incentives are often offered, such as low interest rates, closing incentives, pre-approved packages, innovative refinancing options and leveraging untapped potential in your assets. Mortgage terms like fixed rate, adjustable rate, interest only, reverse, assumable and balloon payment mortgages are all specifically designed to meet the diverse needs of clients investing in home ownership.
Mortgage contingencies may appear fairly straightforward but can sometimes become quite stressful if the intent of the terms of the contingency are not clearly defined and understood. It is important to familiarize yourself with many new concepts, such as the “72 hour kick-out clause”. Making sure you understand these concepts is the job of your mortgage consultant.
Ensure your mortgage consultant takes the time to review all the fine print on your contract so that you are fully aware what is covered and for what length of time. A trustworthy working relationship is one where no hidden fees or requirements surface after the contract is signed.
Home ownership is probably the biggest financial investment you will make in your lifetime. Take an interest in the interest. Be wise, thorough, get advice and don’t be shy about shopping around.
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