Important Mortgage And Home Loan Terms That You Need To Understand

For most people the mortgage industry seems to speak a foreign language, with terms and acronyms that are vague and unfamiliar. And of course, when dealing with large sums of money such as those found in a home mortgage, you want to try to understand the language as much as possible in order to avoid making mistakes. So here is a little primer on some of the most important terms used when getting a mortgage or home loan.

There are four types of mortgages that are generally available and those are fixed rate, adjustable rate, convertible and special loans.

Fixed Rate Loans - usually these are found in either the 30 year loan or 15 year loan category, and this simply means that you pay a fixed payment each month over the course of either the 30 years or 15 years.

Adjustable Rate Loans - this is where your payment can fluctuate depending on the prevailing interest rate at the time. If interest rates rise, then your payment goes up and if interest rates fall, your payment goes down instead.

Convertible Loans - these are loans that may start out as either a fixed rate or an adjustable rate mortgage, and then can be converted over to the opposite kind of loan instead. Many people will use this type of loan to start out as an adjustable rate mortgage and then convert over to a fixed rate mortgage when interest rates are at their lowest.

Special Loans - these include FHA loans for first-time homebuyers and folks with credit problems, and also VA mortgage loans for veterans of the Armed Forces and their families.

There are other terms that you need to know when it comes to getting a home mortgage as well and they are:

Appraisal - this is where you pay an independent person to correctly assess the value of your home using excepted market calculations.

Closing costs - these are fees that are usually payable when the mortgage papers are signed that pays for the transfer of the ownership of the home.

Points - this is a value that typically relates to 1% of the total cost of the home being mortgaged.

Escrow - this is where money is often held by a neutral third party in a transaction of two or more people.

Pre-qualify - this is where a lending institution will state that you do qualify for receiving a home mortgage for a certain price range of home.

Pre-approval - this is where a lending institution has already run the necessary paperwork and approved a home mortgage loan for a certain amount.

There are other special terms and acronyms used by the mortgage industry, but the ones listed above are perhaps the ones that are most commonly used. Hopefully this will help you be more informed when you try to get your next home mortgage loan.

Steadman Issenburg writes on many consumer related topics including real estate. You can find mortgage rate calculators and compare mortage interest rates and more by visiting our Real Estate website.

Debt Consolidation Home Mortgage Loan-Tips To Help You Get The Most From One
A debt consolidation home mortgage loan is a perfect way to reduce your debt obligations and manage your finances more effect...

A Bad Credit Home Mortgage Loan Is Possible!
Having a previous history of bad credit does not automatically mean you will be denied finance for a bad credit home mortgage...

The Secret to Finding the Best Mortgage Loan
As you apply for a home loan or look to refinance your home, it is important to understand your situation and how it will be ...

Refinance Home Loan: Mortgage Terminology to Help You Sound Like You Know the Lingo
If you understand mortgage terminology and can talk the lingo your loan originator will be less likely to try and take advant...

California Jumbo Mortgage Loans
California jumbo mortgage loans are very large commercial or residential mortgage loans offered by many financial institution...

Home Mortgage Loan - Finding A Good One
Finding the home mortgage loan that is right for you may be just a few mouse clicks away for you. Yes, the internet has berth...

Home Loan Rates - Important Tips On How To Find The Most Effective Type Of Mortgage For Your Needs
Not many people know a lot about home loan rates, even some who have purchased or refinanced their mortgages before.In most c...

No Down Payment Poor Credit Mortgage Loans - No Money Down Loan Information
Finding a no money down mortgage loan is actually easier for someone with poor credit. Subprime lenders are more willing si...

Mortgage Loan Process for a New Home
You have seen a lot of real estate homes and very much interested, so now you are planning to make a purchase.The first thing...

Consolidating Debt Into a Home Equity Loan or Second Mortgage
High interest debt got you worried? Think about consolidating those high interest credit cards and other bills into a home eq...

Mortgage Loan to Value Ratio: What You Need to Know
Your loan to value ratio is an important aspect of your mortgage. This ratio determines how much you can borrow when taking ...

Mortgage Loans - Types and Tips
Are you looking for a new home but confused about the mortgage loan and its types? Are you a fresher in the mortgage loan are...

Current Mortgage Loan Rates
The real estate market has witnessed a boom in recent years. This has resulted in people buying homes earlier than they antic...

First Time Home Owner Mortgage Loans
First time home owners are sometimes surprised at the complexity of the mortgage lending process. If you are searching for a ...

When Is A Second Mortgage Loan A Good Idea?
A second mortgage loan is a loan taken after the first mortgage, with the property used in the first mortgage as collateral. ...

Online Mortgage Loan Companies Are Convenient
There are many reasons to use the internet to take care of your mortgage loan needs. Online mortgage companies can give you q...

Florida Construction Mortgage Loans
Building your own home can be the most exhilarating and accomplished feeling but it can also be a big pain in the neck. Ongo...

Home Mortgage Loans: Buying Your First Home but Low on Cash? Read On
If you are buying a home for the first time and are looking to apply for a mortgage loan, one of the recommended paths is thr...

Refinancing First and Second Mortgage into a Single Loan
If you have a home loan, perhaps you have considered refinancing your loan. Homeowners may refinance their home loan to cas...

Subprime Mortgage Loans When You Have Bad Credit History
Many people think that obtaining a home mortgage with bad credit is nearly impossible. That used to be the case many years a...