Adjustable Rate Mortgage
(ARM) - A mortgage where the interest rate is subject
to change over the term of the loan as
determined by market influences such as interest
rates on Treasury securities.
Amortization
- The process of paying debt by installments of principal and earned interest
over a fixed period of time.
Annual Percentage Rate
(APR) - A measure of how much interest credit will
cost, expressed as an annual percentage.
Closing Costs
- All fees and charges paid at closing for services including the lender or
mortgage broker, and certain other fees paid to third parties for services that
the lender requires the borrower to purchase.
Credit Application
- A form used by a lender to obtain personal, financial and credit information
to appraise an applicant’s credit worthiness.
Discount Points
- A lump sum paid to the buyer’s creditor to reduce the cost of the loan. This
payment can either be required by the creditor or volunteered by the seller in
a loan to buy real estate.
Equity
- The financial difference between the current market value and the amount
owed.
Escrow
- Property or money held by a third party until the agreed upon obligations of
a contract are met.
Fixed Rate
- The rate of interest charged for credit that does not change over the life of
the loan.
Foreclosure
- The legal action of the lender to take back possession of any property used
to secure repayment for the loan when a debtor fails to meet the payment
obligations.
Lien
- Legal document used to create a security interest in another’s property. A
lien is often given as a security for the payment of a debt. A lien can also be
placed against a consumer for failure to pay what is owed.
Loan Origination Fee
- The fee lenders charge for making a loan. Example: 1% for a $100,000 mortgage
equals a $1,000 loan origination fee.
Market Value
- The worth of something determined by a willing buyer and seller in an open
market. Market value can fluctuate depending on supply and demand and other
market forces.
Multiple Listing Service (MLS) - An online database of available listings that licensed real estate professionals use to access detailed and property information that is not available to the public
Principal
- The original balance of money loaned. As the loan is paid over time, the
principal is the remaining loan balance.
Property Taxes - The annual real estate taxes charged to property
owners based on the assessed value of the property.
For first time homebuyer information, or if you are looking to buy or sell a home in Ventura County, please visit www.prucalhomes.com or call 888-352-1652
