The main reason that people look for a mortgage, home equity loan or refinance loan in Norwalk, CA, is because they have found or are living in a home in the area. If you are looking for a mortgage, by this time, you should have found a home and put down an offer on the home that has been negotiated and accepted by the seller. However, now that you have a home, you need a way to pay for it. For the vast majority of people, this means obtaining a mortgage.
Regardless of whether you are looking for a home equity or refinance loan or a mortgage, many of the same terms will apply to your situation.
Fixed rate mortgage or fixed rate: The interest rate is stable throughout the term of your loan and the interest rate is set at the start of the mortgage or loan.
Adjustable rate mortgage or adjustable rate: The interest rate changes at set intervals throughout the term of your mortgage, home equity loan or refinancing loan.
Interest rate: The percentage that you will be charged on your loan or mortgage.
Lender’s index or points: The percentage above the interest prime rate that the lender will charge you for holding your mortgage or loan.
Term: The length of the home equity or refinance loan or mortgage that you have taken out measured in years.
Mortgage: The money loaned to you by a lender to purchase a home.
Home equity loan: The money that you have essentially ‘saved’ since the purchase of your home by making mortgage payments. The equity is determined by the value of your home minus the amount owing on your mortgage. For example, if your home is worth $100,000 and your mortgage has $50,000 left owing on it, you have $50,000 worth of equity in your home. Many lenders will allow you to take up to 100 percent of your equity out in a home equity loan.
Refinancing: Refinancing is the concept of getting a new mortgage or loan when the interest rates are at an all time low or have been stably low for a period of time. In the case of refinancing, you actually have a new loan or mortgage, with new terms, new payments and a new interest rate. Your old loan or mortgage is paid out and no longer exists.
Balloon payment: Balloon Mortgages are a type of mortgage in which you must pay the balance owed on the mortgage at the end of the term.
These are only a few of the basic terms that are used when you apply for a mortgage, home equity or refinance loan in Norwalk, CA. Never be afraid to ask your lender questions if there is something you do not understand. You will need to ensure that your lender is forthright about what all the ins and outs of your mortgage, refinancing or home equity loan are. Also, you will need to ask specifically about the charges that you will have to pay in order to obtain the mortgage or loan. If you do not know how much you are expected to pay, how much your interest rate is, what your payments will be and if they are stable or will change could cost you thousands of dollars and could result in not getting your home, mortgage or loan.
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