The Stanford Funding Blog

Adjustable-rate mortgage (ARM): The mortgage-payment rate and loan payments vary. With these mortgages, interest rates start lower than with a fixed-rate mortgage, but then become variable. At specific intervals (typically every year), a lender adjusts the rate up or down as interest rates fluctuate.

Annual percentage rate (APR): The annual cost of a mortgage. APR is the base interest rate plus points, fees, and other loan costs.

Closing cost: Charges a home buyer pays in addition to a down payment. Fees may include points and charges for credit reports, appraisals, prorated property taxes, and homeowner’s insurance.

Finance charge: Interest borrowers pay over the life of a loan.

Fixed-rate mortgage: The mortgage-payment rate and loan payments remain fixed for the life of a loan. Interest rates do not vary.

Lock-in: Borrowers get a guaranteed interest rate (in effect at the time of the loan application) for a specific period of time.

Mortgage: A legal contract that pledges a property as security for a loan.

Mortgage broker: Companies that work with a number of banks and lenders to negotiate lower interest rates than available to individuals. They are usually paid a commission by the lender and charge the borrower a broker’s fee.

Mortgage payment: The loan payments for a mortgage are composed of interest (what the lender charges for borrowing money) and principal (amount borrowed).

Private mortgage insurance (PMI): Buyers pay this insurance if their down payments are less than 20% of a home’s purchase price (on a conventional mortgage loan).

Points: Fees borrowers pay to reduce interest rates. A point is 1% of a loan amount.

Stanford Funding offers a complete line of mortgage loan programs. We pride ourselves on finding the right one to meet your specific needs. Talk to one of our loan specialists today for the best programs, rates and services.

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This entry was posted on Saturday, February 18th, 2006 at 9:23 am and is filed under Mortgage Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.