After you have found a home in St. Charles, Missouri, or already live in a home in St. Charles, you will have various financial needs, such as a mortgage, refinancing or home equity loan. This is where we come in.
Mortgages are money that a lender lends to you to help you purchase a home. In return, you then pay the lender monthly, bi-weekly or weekly mortgage payments on the principal amount of the mortgage plus interest for a specific term, usually one to five years. This is based on an amortization of 15 to 30 years for the whole cost of the house. Each time you make a mortgage payment, a certain amount of the payment goes towards the principal of the mortgage, and the rest goes to the interest payment to the lender. At the beginning of your mortgage, you will be paying more in interest payments than to the principal. As time goes by, the ratio of principal to interest increases in your favor so that you are paying more to principal than interest. The money that is applied to the principal is known as home equity.
If happen to be looking for a home equity loan or refinance loan in St. Charles, these same terms will apply to you. This list is to help you better understand the jargon used by lenders.
Adjustable rate—this term means that the interest rate changes at set intervals throughout the term of your mortgage, home equity loan or refinancing loan.
Fixed rate—this term means that the interest rate is stable throughout the term of your loan. The interest rate is set at the start of the mortgage or loan.
Interest rate—usually the interest rate is set by the national prime interest rate plus interest points that the lender will charge you that make their profit margin.
Points above prime—this is the percentage rate that the lenders charge you above the original prime interest rate to make a profit.
Term—the term is the length of the loan or mortgage that you have taken out, usually one to five years.
Amortization—this term signifies the length of time that the entire cost of the house is paid out over, usually 15 to 30 years in standard mortgages, and up to 50 years with a specialized 50-year mortgage.
Mortgage—the money loaned to you by a lender to purchase a home.
Home equity loan—this is money that you have saved since the purchase of your home by making mortgage payments that pay down the principal amount of your mortgage. The equity in your home is determined by the value of your home minus the amount owing on your mortgage.
Refinancing—Many people choose to refinance their mortgage when the interest rates are at an all time low. Other reasons include steadily rising interest rates and an adjustable rate mortgage. Locking in a fixed rate mortgage before the interest rate rises again is often a choice that many homeowners in St. Charles make to avoid increasing monthly mortgage payments.
These are just the basic terms that are used when you apply for a mortgage, home equity loan or refinance mortgage in St. Charles or anywhere in the United States.
One of the keys to understanding the contract that you sign with a lender for a loan or mortgage is to ask questions and understand their jargon. It is important to note that if you are not sure of a concept or term that your lender is using, you should not be afraid to ask them to clarify. Failure to understand how a particular term or rate impacts you could cost you thousands of dollars in the end.
We can help find you the mortgage, home equity loan or refinancing loan that is best for you by matching you with the product that best suits your financial needs. Fill out the form below with your information and we can get to work helping match you with the product that suits your needs. After you have filled out the form below, one of our qualified lenders will contact you to further discuss your application.
