To All:
I was reading an article from Florida Realtor News today and came across something of interest for everyone out there that is not a realtor or mortgage broker. There is a good description of terms that are used day in day out by us in the business. Check them out and as always, if you have any questions please give me a call or email me.
Rich Kemper
REALTOR, Keller Williams Realty
CDPE - Short Sale Specialist
PCS Military Relocation Specialist
Cell: 813.777.5332
Fax: 813.684.8400
Email: getrichquick2@aol.com
I don’t work from 9 to 5. I work from start to close!
Learn the lingo
Since first-time buyers are new to the market and will finance a significant portion of their purchase, it’s important to get familiar with the processes and terminology associated with home buying. Here are a few key terms from MortgageMatch.com:
• Bait Rate: Misleading mortgages with low rate promises and no contingencies generally for those with extraordinary credit. Rates are based on: credit, debt-to-income and loan-to-value ratios, the size and type of loan, property location and the day you lock your rate, etc. The loan isn’t locked until the application is accepted. By then, it may be too late to find a better rate from another lender.
• Basis Point: A term used in the mortgage industry, which simply means 1/100th of 1 percent.
• Closing Costs: The fees required to process and close your loan. They’re a cash obligation running from three to five percent of the purchase price. Motivated sellers might pay a portion of these costs.
• FHA: Federal Housing Administration, the federal government agency that oversees the U.S. housing market. FHA loans are loans insured by the U.S. Department of Housing and Urban Development.
• FRM and ARM: A fixed-rate mortgage loan (FRM) is a loan where your interest rate stays the same for the life of the loan. ARMs are adjustable rate mortgages with variable interest rates that fluctuate based on an agreed-upon index.
• GFE: The Good Faith Estimate (GFE) is a document explaining all costs involved in getting a loan.
• TIL: The Federal Truth-in-Lending Form is a document that spells out the costs and fees of the loan.
• Lis Pendens: An official notice that there is a pending lawsuit over real estate.
• Per Diem Interest: Interest you pay per day, from the day you close to the last day of the month.
• Underwriting and Underwriting Fees: Underwriting is a process the lender performs to qualify a borrower for a loan, and the fee is what you pay the lender at closing to cover evaluating the risk involved with loaning you money.
• Warranty Deed: A legal document guaranteeing the seller has a right to sell a property, which is very important if you are considering a distressed or discounted property.
If now isn’t the right time, prepare for your future purchase
If now isn’t the right time to buy a home, make a plan with a target date for when you expect to be ready. Improving your credit, paying down debt, stabilizing your work history and calculating exactly how much you can afford, are the best ways to prepare for your future home purchase. It’s also important to refrain from making any new large purchases or applying for new credit.
© 2011 Florida Realtors®
Since first-time buyers are new to the market and will finance a significant portion of their purchase, it’s important to get familiar with the processes and terminology associated with home buying. Here are a few key terms from MortgageMatch.com:
• Bait Rate: Misleading mortgages with low rate promises and no contingencies generally for those with extraordinary credit. Rates are based on: credit, debt-to-income and loan-to-value ratios, the size and type of loan, property location and the day you lock your rate, etc. The loan isn’t locked until the application is accepted. By then, it may be too late to find a better rate from another lender.
• Basis Point: A term used in the mortgage industry, which simply means 1/100th of 1 percent.
• Closing Costs: The fees required to process and close your loan. They’re a cash obligation running from three to five percent of the purchase price. Motivated sellers might pay a portion of these costs.
• FHA: Federal Housing Administration, the federal government agency that oversees the U.S. housing market. FHA loans are loans insured by the U.S. Department of Housing and Urban Development.
• FRM and ARM: A fixed-rate mortgage loan (FRM) is a loan where your interest rate stays the same for the life of the loan. ARMs are adjustable rate mortgages with variable interest rates that fluctuate based on an agreed-upon index.
• GFE: The Good Faith Estimate (GFE) is a document explaining all costs involved in getting a loan.
• TIL: The Federal Truth-in-Lending Form is a document that spells out the costs and fees of the loan.
• Lis Pendens: An official notice that there is a pending lawsuit over real estate.
• Per Diem Interest: Interest you pay per day, from the day you close to the last day of the month.
• Underwriting and Underwriting Fees: Underwriting is a process the lender performs to qualify a borrower for a loan, and the fee is what you pay the lender at closing to cover evaluating the risk involved with loaning you money.
• Warranty Deed: A legal document guaranteeing the seller has a right to sell a property, which is very important if you are considering a distressed or discounted property.
If now isn’t the right time, prepare for your future purchase
If now isn’t the right time to buy a home, make a plan with a target date for when you expect to be ready. Improving your credit, paying down debt, stabilizing your work history and calculating exactly how much you can afford, are the best ways to prepare for your future home purchase. It’s also important to refrain from making any new large purchases or applying for new credit.
© 2011 Florida Realtors®
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