Mortgage Basics
What is a mortgage?
A loan used to buy a house
What is a Real Estate Agent?
A person whose job it is to help buy or sell houses, for people.
What is the deductible?
The fixed amount you pay out-of-pocket when filing a claim for damage or loss before the insurance company pays.
What is a VA Loan?
A type of mortgage designed for veterans
Who are the real estate agent and the lender?
These two professionals are necessary for negotiating the sale and securing a loan when buying a house.
What is Annual Percentage Rate?
The total yearly cost of borrowing money, expressed as a percentage.
What is equity?
This is the percentage of ownership one has in a property, often calculated using the current value and the amount still owed.
What is flood damage?
This type of damage is NOT covered by a standard homeowner's insurance policy.
What is an FHA loan?
First-time homebuyer loan
What are tax records or bank statements?
Your ID, Social Security number, and this specific financial document for the last three years to a lender for mortgage pre-approval.
What is the Standard mortgage length?
30 years
What is a Down Payment Assistance?
Programs that help people pay for some of the upfront costs of buying a house. These programs are usually available at the state or local level.
What is liability coverage?
The term for protection for claims up to a certain dollar amount, such as a dog bite or a slip-and-fall on your property.
What is pre-approval?
Proves how much you can borrow
What is the closing?
This is the term for the process where one party signs many papers to officially transfer ownership of the real estate and pay remaining costs.
What is interest rate stays vs. changes?
Fixed vs. adjustable mortgage
What is a Home Appraisal?
An estimate of a home’s value based on its features and the value of comparable homes.
What is proximity to a fire hydrant or other emergency services?
A discount on your annual premium can be obtained by having multiple policies with the same company or by having this feature near your home.
What is a USDA Loan?
A type of mortgage designed for low- and moderate-income borrowers in rural areas.
What is the home appraisal for at least the agreed-upon selling price?
One of the two typical contingencies included in a contract to buy a home, besides a satisfactory home inspection.
What is a down payment?
Upfront % paid by the buyer
What is a Buyer’s Agent?
A type of real estate agent who works for the buyer. They help buyers find and purchase properties that meet their specific needs and budget.
What is full replacement cost?
The insurance company will pay up to the current cost to replace your home or its contents if they are damaged or destroyed.
Minimum score for a loan
620
What is less risk for the lender, and do they get their money back faster? Influences the buyer to choose a shorter mortgage term.
A lender allows a lower interest rate for a 15-year mortgage compared to a 30-year mortgage.