A document that gives evidence of an individual’s ownership of property.
A policy, usually issued by a title insurance company, which insures a home buyer against errors in the title search. The cost of the policy is usually a function of the value of the property and is often borne by the purchaser and/or seller. Policies are also available to protect the lender’s interests.
The decision whether to make a loan to a potential home buyer based on credit, employment, assets, and other factors and the matching of this risk to an appropriate rate and term or loan amount.
Purchase Loans are mortgages used to finance the purchase of a home. Whether you are buying a single family home, townhouse or condo, if you are not paying cash, you’ll need a purchase mortgage.
Refinance Loans are used to replace the current financing for a residential property. Borrowers frequently consider refinancing a loan to convert some the equity built up in their home into cash, reduce their mortgage rate, change the type of financing (such as moving from an Adjustable Rate Mortgage to a Fixed Rate loan) or to reduce the length or term of their loan.
Fixed Rate Mortgages (FRMs) have a set or “fixed” interest rate that does not change during the life of the loan. Because the rate does not go up or down, the combined principal and interest (P&I) payment is consistent for the life of the loan. For borrowers who want a stable payment and expect to remain in their home for at least 3-5 years, a fixed rate loan may be the best option.
Fixed rate loans generally have a loan term or length of 10, 15, 20, 30 or even 40 years. A loan with a shorter term will usually have a lower interest rate, but the payment will be higher since the loan amount is paid back over a shorter period of time. If you think you may want to pay off your loan earlier, but don’t want to commit to a higher monthly payment, consider a 20 or 30 year loan term; you can always pay extra principle, to pay off the loan faster.
Interest Only Loans allow a borrower to pay only the interest due on their loan for a certain period of time, often 3 – 5 years. Once the interest only period ends, the borrower must begin to pay principal and interest payments or refinance the loan. Interest only options are available for both Adjustable Rate and Fixed Rate loans.
Home Equity Loans are used to access the equity or stored value in a borrower’s home. These loans are structured either as a Home Equity Line of Credit (HELOC) or an Adjustable Rate or Fixed Rate Home Equity Loan. With a HELOC, the borrower can access the line of credit for cash needed for home improvements, college expenses or other costs that may vary over time. The payment on the HELOC changes depending on the outstanding balance of the loan and the current interest rate. With a Home Equity Loan, the borrower receives a lump sum payment at closing, and the payments, unless changed in connection with a change in the interest rate on an Adjustable Rate loan remain the same, regardless of the loan balance.
Balloon Loans have a lower principal and interest payment, based on a 30 year amortization for the term of the loan, which is often 7 – 10 years. This allows the borrower to pay a lower payment than a traditional fixed rate mortgage with a comparable loan term. At the conclusion of the 7 – 10 year loan term, the loan balance becomes due. Most borrowers choose to pay off the mortgage by selling the home or refinancing the mortgage at that time.
A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to know points, its dimensions, and the location and dimensions of any buildings.
Private mortgage insurance, or PMI, is an insurance policy that protects the bank or loan company from the losses they would incur if you were to default on your mortgage payments. The lower your credit and down payment are, the more likely you will be to pay for this type of insurance.
Necessary to create an escrow account or to adjust the seller’s existing escrow account. Can include taxes, hazard insurance, private mortgage insurance and special assessments.
A fixed-rate mortgage is a home loan with a solid, unchanging interest rate. If you get one of these, you may want to refinance later if interest rates go down, but you won’t have to worry about them going up.
Equity is the amount of a property’s value that is owned by the property owner. It can grow through improvements to the property, growth in the market, and through making mortgage payments that go towards the principal of the loan.
Escrow is an extra account that holds all the money and documents that make up a property transfer until the sale is complete. Escrow can also be an account that holds property taxes and insurance money until they are due, like a savings account you pay a little into with each mortgage payment.
When you close, that new house and mortgage are officially yours! At closing, you’ll sit down with the professionals involved in your real estate transaction and sign all the legal documents needed to give you ownership of your new place. That’s pretty exciting! You’ll also be responsible for paying closing costs as part of the process. Typically you’ll receive a Closing Disclosure three days before closing so you know exactly what you can expect.
A typical monthly mortgage payment includes: principal, interest, Homeowners insurance, property taxes, and if you put down less than 20% on your home it will include Private mortgage insurance (PMI).
While our Local Lenders offer traditional mortgage products, our Lender Partners also offer more unique products, such as bridge and construction loans, to better fit the diverse needs of our customers. To find out which loan products are best for you, click here to get started today.
Unbridled Homes partners with local lenders that are familiar with the process of purchasing new construction. Each of these mortgage companies will work with you closely from the beginning with your application to the end of the process when you close on your home loan. Obtaining a mortgage pre-approval will assist in speeding up the process. Feel free to choose and contact one of our lender partners below to get pre-approved today!
Unbridled Homes has had the opportunity to work with the very best Mortgage Brokers in the area. In our initial consultation, we will assess your needs and make recommendations to match you with the appropriate professionals within our industry who can explain the Construction Loan process.