September 11, 2009 in Mortgages & Credit
A second mortgage simply means that it’s the second mortgage on a house. A mortgage is a loan (borrowed money that must be paid back with interest) used to finance a house and law allows multiple loans on one property. This second mortgage is considered a subordinate to the first and doesn’t have the same ...
September 11, 2009 in Mortgages & Credit
The term No-cost Loan is often used as marketing hype, but generally refers to a loan agreement where the lender is the one that pays for any fees, such as insurance, escrow services, title fees, appraisal fees, credit reports etc. It is promoted as a package where you simply get your loan and don’t have ...
September 11, 2009 in Mortgages & Credit
An Adjustable Rate Mortgage, or ARM in its shortened form is a loan to purchase a house just like any other mortgage, but the interest rate of repayment fluctuates. To put it simply the mortgage interest rate changes in relation to the market place and interest rates in general, instead of being fixed, hence it ...
September 11, 2009 in Mortgages & Credit
Home Equity Line of Credit or (HELOC) in its shortened form is a regular loan, but the collateral for the loan (asset which the loan is secured against incase the borrower fails to pay) is the equity in the borrower’s home. In order to understand what a Home Equity Line of Credit is, you need ...
September 11, 2009 in Mortgages & Credit
Balloon Mortgages are a special type of mortgage, which requires monthly payment for a certain period of time, and paying the outstanding loan balance in full at the end of this period. A balloon mortgage is a type of mortgage loan that often appeals to many home buyers that are young or taking a short ...
September 11, 2009 in Mortgages & Credit
Loan guarantees are governmental promises to take on the responsibility of paying of a private debt should its borrower default, unable to pay it off. The majority of loan guarantees have historically been created to fix the perception of market failure, when smaller borrowers, no matter what their credit score, cannot access the same credit ...
September 11, 2009 in Mortgages & Credit
A Loan Modification is modifing an existing loan made by a lender in response to a borrower’s long-term inability to repay the loan. Loan modifications typically involve a reduction in the interest rate on the loan, an extension of the length of the term of the loan, a different type of loan or any combination ...
September 11, 2009 in Mortgages & Credit
A 125% Loan is a loan, usually a mortgage, with an initial loan amount equal to 125% of the initial property value. In other words, a 125% loan has a loan-to-value ratio (LTV ratio) of 125%. A primary measure of a loan’s risk to a lender is the size of a loan relative to the ...
September 11, 2009 in Mortgages & Credit
A Term Loan is simply a Loan from a bank or other financial institution that has a specified principal amount (unlike a credit card) and a set repayment schedule with a fixed maturity date, when the loan must be paid back in full. Term loans also generally have a variable or floating interest rate. The ...
September 11, 2009 in Mortgages & Credit
A simple interest bi-weekly mortgage payment plan in which the payments made by the borrower are applied immediately toward the remaining principal balance of the mortgage as they are received. This differs from a traditional bi-weekly plan, where the first payment received during a month is held by the servicer of the mortgage until the ...
