Understanding Credit
Companies that gather information about consumers who use credit and sell it to anyone with legitimate business purposes.
What are credit reporting agencies?
A mortgage in which the interest rate does not change during the entire term of the loan.
What is fixed-rate loan?
A condition put in an offer to buy a house.
What is a contingency?
Protects lenders and homeowners against property loss due to problems with past ownership.
What is title insurance?
Costs the buyer must pay at the time of settlement in addition to the previous down payment.
What are closing costs?
An individual's credit history that is used by a lender to determine an applicant's creditworthiness.
What is a Credit Report?
A type of mortgage not insured by the federal government.
What is a conventional loan?
Funds submitted with an offer to show good faith to follow through with the purchase.
What is earnest money?
Two ways homeowners might get discounts on their homeowners insurance premium.
What are smoke detectors and security systems?
A fee equal to 1 percent of the the principal amount being borrowed.
What is a point?
An account with a fixed amount of credit that requires equal payments over a specific time period.
What is an installment loan?
A type of mortgage in which the interest rate changes periodically, up or down, usually once or twice a year.
What is an adjustable rate mortgage?
A professional opinion of the market value of the property.
What is an appraisal?
A policy written to protect the lender against default by a homeowner.
What is mortgage insurance?
The fee charged by the lender to cover administrative costs for evaluating, preparing and submitting a proposed mortgage loan.
What is origination fee?
The *usual* length of time negative records remain on your credit report.
What is 7 years?
Maximum percentage of gross monthly income that can be used for the house payment plus all other debts.
What is debt-to-income ratio?
A legal document conveying title to the property.
What is a deed?
Special insurance you should have if the basement constantly fills with water.
What is Flood Insurance?
A fee paid upfront to lower the interest rate.
What is a discount point or buy down?
Rent payments, utility payments, child support payments and other large, recurring expenses.
What is non-traditional credit?
Capitol, Credit, Character and Capacity.
What are the 4 C's of Credit?
A type of ownership where all owners have an equal and undivided interest in the property.
What is joint tenancy?
What is mortgage life insurance?
The total cost of credit, including interest, points, and certain fees charged by the lender.
What is the annual percentage rate or APR?