Fixed Rate Mortgage: A loan in which the interest rate and monthly payment remain the same throughout the length of the loan.
Adjustable Rate Mortgage (ARM): A loan in which the interest rate adjusts at pre-determined time intervals. When you take out an adjustable rate mortgage you will learn the maximum and minimum interest rates possible within the parameters of your loan.
Zero Down Loan: A loan which does not require a down payment.
VA Loan: A long term, low-or-no down payment loan guaranteed by the Department of Veterans Affairs. It is available to people who have served in the military.
FHA Loan: A loan insured by the Federal Housing Administration that allows qualified borrowers to obtain home mortgages at lower rates than those available on the open market. FHA loans require a 3.5% minimum down payment; that money may be given to you as a gift by a family member.
GFE (Good Faith Estimate): Your lender is required to give you a GFE of all the costs, in addition to the mortgage payment itself, associated with buying your home. These may include charges for inspections, taxes, title insurance, recording fees, attorney fees, points, surveys or property appraisals, among others.
PITI:These initials stand for principal, interest, taxes and insurance. When lenders underwrite a loan, they will factor in each of these to come up with your total monthly payment.
Seller Assistance (DPA):A program that allows sellers to pay between 3% and 6% of your down payment, depending on the type of loan.
Interest Rate Lock: A lender’s guarantee that the mortgage rate you are quoted will be the rate you receive, providing that you qualify for the loan in a timely manner.
Comparison Shopping (sub head)
It’s a good idea to consult with more than one lender when researching your first mortgage loan. Lenders offer a variety of loan products; some may fit your circumstances better than others. A word of warning: lenders who advertise interest rates that are substantially below average usually have some built-in surprises along the way.
