How much do I need to make to afford a 500k house?

How much do I need to make to afford a 500k house? To finance a 500k mortgage, you’ll need to earn roughly $150,000 – $155,000 each year. We calculated the amount of money you’ll need for a 500k mortgage based on 20% down payment and a monthly payment of 25% of your monthly income. Your […]

Kentucky

Closing Costs in Kentucky Closing expenses in Kentucky typically range between $3000 and $5000, or 2% to 5% of the loan amount, depending on the size of the loan. Closing costs are the additional fees associated with purchasing a home. Third parties must be reimbursed for their involvement in the transaction, hence the majority of […]

Interest rate

What Is The Interest Rate On A VA Loan? Here are the interest rates for VA loans as of June 2022: Product Interest Rate APR 30-Year Fixed-Rate VA 5.25% 5.52% 30-Year Fixed-Rate 5.625% 5.875% 30-Year Fixed-Rate FHA 5.0% 5.4% 30-Year Fixed-Rate Jumbo 5.625% 5.9% Note: Rates are subject to changes daily. QUICK QUOTE Trusted. Experienced. […]

Mortgage originator

Mortgage Originator definition A mortgage originator is an institution or individual who works with a borrower to execute a home loan transaction. A mortgage originator, often known as a mortgage broker or a mortgage banker, is the initial mortgage lender. Mortgage originators work with underwriters and loan processors from the time an application is submitted […]

Indemnity insurance

Indemnity insurance explained Indemnity insurance is an insurance policy that compensates an insured party for certain unforeseen damages or losses up to a specific limit. The specific limit is usually the value of the loss itself. In exchange for premiums paid by the covered parties, insurance firms offer coverage. This insurance is frequently meant to […]

Final walk-through

Final walk-through process The final walkthrough is done to demonstrate purchasers what condition the property may be expected to be in when they take possession, according to most purchase agreement clauses. The property shall stay in the same or better condition than when the offer was accepted once the contract is signed. Because the phrases […]

Utility cost

Utility costs explained The cost of using utilities such as power, water, waste disposal, heating, and sewage is known as utilities costs. Expenses are incurred throughout the reporting period, computed and accumulated for, or payment is made. Utility costs calculations The total amount reported as utilities expenditure under the accrual basis of accounting represents the […]

Certificate of Reasonable Value (CRV)

Certificate of Reasonable Value (CRV) explained A a Certificate of Reasonable Value (CRV) is issued by The Veterans Administration based on an authorised assessment. The authorised assessment sets a limit on the amount of money that may be borrowed with a VA loan. A certificate of fair value, for example, is received for a home […]

Lenders mortgage insurance

Lenders mortgage insurance explained Lenders mortgage insurance (LMI) is a type of insurance that is paid to a lender or trustee in exchange for a pool of securities that may be needed when obtaining a mortgage loan. It is loss insurance in the event that a mortgagor fails to repay the loan and the lender […]

Mortgage term

Mortgage term explained A Mortgage Term is a certain amount of time to repay the debt. In the United States, the most frequent mortgage term is 30 years. A 30-year mortgage allows the borrower to repay the loan over a period of 30 years. The majority of people who have this sort of mortgage will […]

Real Property

Real property explained Real Property is a plot of land and everything permanently related to it. The owner of real estate has complete ownership rights, including the ability to acquire, sell, lease, and enjoy the property. Real property process It’s helpful to start with land and real estate to understand how real property is defined. […]

Tennessee

What are the Closing Costs in Tennessee? Closing costs in Tennessee are expected to range from $3000 to $5000, or 2% to 5% of the loan amount, depending on the size of the loan. Closing costs are the extra fees that come with buying a home. The majority of closing costs are charged by third […]

Housing expenses-to-income ratio

  Housing expenses-to-income ratio explained Housing Expenses to Income Ratio is a relationship of  house and living  expenses  divided by the home owners income. A good Housing Expenses to Income ratio is two to two-and-a-half times their yearly gross income. According to this method, a $100,000-per-year earner can only afford a mortgage of $200,000 to […]

Ginnie Mae

  Ginnie mae explained The government-sponsored credit organisations Ginnie Mae, Fannie Mae, and Freddie Mac all operate in the US credit market. Fannie Mae and Freddie Mac are government-sponsored entities, while Ginnie Mae is a federal government agency (GSE). All three companies have a significant presence in the mortgage finance sector in the United States. […]

Foreclosure

Foreclosure explained The legal procedure through which a lender seeks to recoup the amount owing on a defaulted debt by seizing and selling the mortgaged property is known as foreclosure. Default usually occurs when a borrower fails to make a certain number of monthly payments, but it can also occur if the borrower fails to […]

PITI

PITI (Principal, Interest, Taxes, Insurance) The following article will cover all aspects of PITI including: What is PITI, How does PITI work, and What are the key factors of PITI? PITI explained Principal, interest, taxes, insurance (PITI) are the sum components of a mortgage payment. Specifically, they consist of the principal amount, loan interest, property […]

Due on sale clause

Due-on-sale clause explained A due-on-sale clause is a condition in a mortgage contract that compels the borrower to repay the lender in full upon the sale or transfer of a portion or complete interest in the property that secures the loan. Mortgages with a due-on-sale provision cannot be assumed by the next owner of the […]

Covenant

Covenant explained A covenant, in legal and financial terms, is a commitment made in an indenture or other formal debt arrangement that specific acts will be carried out or that certain thresholds will be fulfilled. Covenants in finance are clauses in a financial contract, such as a loan instrument or a bond issuance, that specify […]

Attorney fee

What are Attorney fees? Attorney’s fee is a word used mostly in the United States to describe the remuneration paid to an attorney for legal services rendered to a client, whether in or out of court. The charge might be hourly, flat-rate, or dependent. According to recent research, when attorneys charge a flat fee rather […]

Cloud on title

Cloud on title explained Cloud on Title is any document, claim, unreleased lien, or encumbrance that might invalidate or impair a title to real property or cast doubt on the title is referred to as a cloud on title. The majority of the time, clouds on the title are detected through a title search. A […]

Buydown

Buydown explained A buydown is a mortgage financing strategy in which the buyer tries to get a reduced interest rate for at least the first few years, if not the full term of the loan. During instance, a 2-1 buydown is a sort of mortgage buydown that allows homebuyers to save money on their interest […]

Balance sheet

Balance sheet explained A balance sheet is a financial statement that shows the assets, liabilities, and shareholder equity of a corporation at a certain point in time. Balance sheets serve as the foundation for calculating investor returns and assessing a company’s financial structure. In a nutshell, a balance sheet is a financial statement that shows […]

Variable rate mortgage

Variable Rate Mortgage (VRM) The following article will cover all aspects of a Variable Rate Mortgage including: What is a Variable Rate Mortgage, How does a Variable Rate Mortgage work, What are the key factors of a Variable Rate Mortgage and the benefits of a Variable Rate Mortgage. Variable rate mortgage explained A variable rate […]

Property title search

Property Title Search The following article will cover all aspects of a Property Title Search including: What is a Property Title Search, How does a Property Title Search work, What are the types of Property Title Searches and the benefits of a Property Title Search. Property title search explained The word “title search” refers to […]

Freddie Mac

Freddie mac explained The Federal Home Loan Mortgage Corp. (FHLMC) is a stockholder-owned government-sponsored company (GSE) established by Congress in 1970 to keep money flowing to mortgage lenders, allowing middle-income Americans to buy and rent homes. The FHLMC, sometimes known as Freddie Mac, is a major player in the secondary mortgage market, purchasing, guaranteeing, and […]

Title insurance

Title Insurance The following article will cover all aspects of Title Insurance including: What is Title Insurance, How does Title Insurance work, What are the types of Title Insurance and the benefits of Title Insurance. Title insurance explained Title insurance is a type of indemnity insurance that protects lenders and homebuyers against financial loss caused […]

Open-end mortgage

Open-end mortgage The following article will cover all aspects of an Open-End Mortgage including: What is an Open-End Mortgage, How do Open-End Mortgages work, What are the types of an Open-End Mortgage and the benefits of an Open-End Mortgage. Open-end mortgage explained An open-end mortgage is one that permits the borrower to raise the amount […]

Line of credit

Line of credit explained A line of credit (LOC) is a set amount of money that may be borrowed at any time. The borrower has the option of withdrawing funds as needed until the limit is met. In the event of an open line of credit, money can be borrowed again as it is returned. […]

Prepayment penalty

Prepayment penalty The following article will cover all aspects of a Prepayment Penalty including: What is a Prepayment Penalty, How does a Prepayment Penalty work, What are the types of Prepayment Penalties and the importance of a Prepayment Penalty. Prepayment penalty explained A prepayment penalty is commonly included in a provision in a mortgage contract […]

Principal

Principal The following article will cover all aspects of Principal including: What is Principal, How does Principal work, What are the types of Principal and the importance of Principal. Principal explained The term “principal” is most usually used to refer to the initial amount of money borrowed in a loan or invested. It can also […]

Recording fee

Recording fee The following article will cover all aspects of a Recording Fee including: What is a Recording Fee, How does a Recording Fee work, and Why are Recording Fee’s important? Recording fee explained The word “recording fee” refers to the cost of registering or documenting the acquisition or sale of real estate by a […]

Transfer tax

Transfer Tax The following article will cover all aspects of  a Transfer Tax including: What is a Transfer Tax, How does a Transfer Tax work, What are the types of Transfer Taxes and why are Transfer Taxes important? What is a Transfer tax? A transfer tax is a fee levied on the transfer of property […]

Underwriter

Underwriters The following article will cover all aspects of Underwriters including: What is an Underwriter, How does Underwriting work, types of Underwriters and the benefits of Underwriters. Underwriter explained The appraisal of a real estate investment, whether it be equity ownership or a real estate loan, is known as real estate underwriting. Underwriting typically entails […]

Personal finance

Personal finance The following article will cover all aspects of Personal Finance including: What is Personal Finance, How does Personal Finance work, What are the key factors of Personal Finance and the benefits of Personal Finance. Personal finance explained Personal finance is the process of budgeting, saving, and spending monetary resources over time while taking […]

Second mortgage

Second Mortgage The following article will cover all aspects of a Second Mortgage including: What is a Second Mortgage, How does a Second Mortgage work, types of Second Mortgages and the benefits of Second Mortgage. Second mortgage process What exactly does a second mortgage entail? Most people take out a home loan from a lending […]

Right of first refusal

Right of first refusal The following article will cover all aspects of Right of First Refusal including: What is the Right of First Refusal, How does the Right of First Refusal work, What are the negatives and benefits of the Right of First Refusal. Right of first refusal explained The right of first refusal (ROFR […]

Truth in lending act

Truth In Lending Act The following article will cover all aspects of the Truth In Lending Act including: What is the Truth In Lending Act, How does the Truth In Lending Act work, Who does the Truth in Lending Act apply to and the benefits of the Truth In Lending Act. Truth in lending act […]

Leasehold

Leasehold explained A leasehold estate is the possession of a transitory right to hold land or property in which a lessee or tenant receives real estate rights from a lessor or landlord through some form of title. A leasehold estate is often considered personal property, even when the tenant has rights to real property. Leasehold […]

Uniform settlement statement

Uniform settlement statement The following article will cover all aspects of a Uniform Settlement Statement (HUD-1) including: What is a Uniform Settlement Statement, How does a Uniform Settlement Statement work, What’s Included on a Uniform Settlement Statement and the importance of a Uniform Settlement Statement. Uniform settlement statement explained The HUD-1 is a standardized mortgage […]

Right of rescission

Right of Rescission The following article will cover all aspects of the Right of Rescission including: What is the Right of Rescission, How does the Right of Rescission work, Why is the Right of Rescission important and the benefits of the Right of Rescission. Right of Rescission Explained The Truth in Lending Act (TILA) gives […]

Alabama

What are the Closing Costs in Alabama? Closing costs in Alabama are expected to range from $3000 to $5000, or 2% to 5% of the loan amount, depending on the size of the loan. Closing costs are the extra fees that come with buying a home. The majority of closing costs are charged by third […]

Warranty deed

Warranty Deeds The following article will cover all aspects of a Warranty Deed, including: What is a Warranty Deed, How does a Warranty Deed work, types of Warranty Deeds and the benefits of a Warranty Deed. Warranty Deed Explained In contrast to a quitclaim deed, where the seller does not guarantee that they have clear […]

Rollover mortgage

Rollover Mortgage The following article will cover all aspects of Rollover Mortgages including: What is a Rollover Mortgage, How do Rollover Mortgages work, Are Rollover Mortgages a good idea and the benefits of Rollover Mortgage. Rollover Mortgage Explained A rollover mortgage is a loan to cover the unpaid balance, or outstanding principal,that  must be refinanced […]

Tax deed

What is a Tax Deed? The term tax deed refers to a legal document granting ownership of a property to a government body when the owner fails to pay any associated property taxes. A tax deed gives the government agency the authority to sell the property to collect the delinquent taxes. Once sold, the property […]

RESPA

What Is the Real Estate Settlement Procedures Act (RESPA)? The Real Estate Settlement Procedures Act (RESPA) was passed by the United States Congress in 1975 to enable accurate settlement cost disclosures to homebuyers and sellers. RESPA was also enacted to prevent bribes, limit the usage of escrow accounts, and remove abusive activities in the real […]

Secondary mortgage market

What Is the Secondary Mortgage Market? The secondary mortgage market is a marketplace where lenders and investors buy and sell home loans and servicing rights. The lenders who issue new mortgages sell a considerable percentage of them into the secondary market, where they are packaged into mortgage-backed securities and sold to investors like pension funds, […]

Rural housing service

What is the Rural Housing Service? The Rural Housing Service (RHS) of the United States Department of Agriculture (USDA) provides or guarantees RHS loans (USDA). The Rural Housing Service (RHS) makes direct loans to low-income borrowers in rural regions and insures loans made by certified lenders who meet RHS criteria. More than house mortgages originated […]

Reverse mortgages

What are Reverse Mortgages and Annuity? Although reverse mortgages and annuities are two quite distinct financial products, they are both intended to produce a consistent, reliable stream of income for retirement. However, if you’re contemplating either of these solutions, you should be aware that they have significant distinctions. The most basic distinction is that a […]

Proration

What does Proration mean? At closing, prorations are credits given to both the buyer and the seller. They make certain that each party pays solely for the time they held the house. On each party’s closing statement, they will show up as debits or credits. Prorations are usually assessed to buyers. On the buyer’s closing […]

Property tax

What is Property Tax? Property tax is a tax levied on property owned by a person or another legal body, such as a business. Property tax is most typically a real estate ad-valorem tax, which is considered a regressive tax. It is determined by the local government in the area where the property is located […]

Prime rate

What is the Prime Rate? The prime rate is the rate of interest charged by commercial banks to their most creditworthy corporate clients. The prime rate is based on the federal funds overnight rate, and prime is the starting point for most other interest rates. Prime Rate Explained A prime rate, also known as a […]

Pre-qualification

What is Pre-Qualification? Pre-qualification is a credit assessment made by a lender based on information submitted by the borrower. Before providing a pre-approval, the lender will assess the borrower’s creditworthiness. Lenders typically utilize this as a marketing strategy to attract new consumers, particularly for credit cards and mortgages. Pre-Qualification Explained Pre-qualification refers to a mortgage […]

Non-conforming loan

What Is a Non-Conforming Loan? A Non-Conforming mortgage loan is one that does not comply with the requirements of government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac and hence cannot be sold to them. GSE standards include, among other things, a maximum loan amount, acceptable properties, down payment requirements, and credit qualifications. Non-Conforming loan […]

Florida

What are the Closing Costs in Florida? Closing costs in Florida on average range between 7% to 9% of the loan amount, depending on the size of the loan according to the National Association of REALTORS®. Closing costs are the extra fees that come with buying a home. The majority of closing costs are charged […]

Private mortgage insurance

What Is a Mortgagee? A mortgagee is a type of lender that lends money to borrowers for the purpose of purchasing real estate. In a mortgage transaction, the mortgagee is the lender, and the mortgagor is the borrower. The mortgage follows the property, so even if the borrower sells it to someone else, the mortgagee […]

Loan-to-value ratio

What Is Loan-to-Value (LTV) Ratio? Before approving a mortgage, financial institutions and other lenders look at the loan-to-value (LTV) ratio to determine lending risk. Loans with high LTV ratios are typically considered higher risk loans. As a result, if the loan is authorized, the interest rate will be greater. A loan with a high LTV […]

Mortgagee

What Is a Mortgagee? A mortgagee is a type of lender that lends money to borrowers for the purpose of purchasing real estate. In a mortgage transaction, the mortgagee is the lender, and the mortgagor is the borrower. The mortgage follows the property, so even if the borrower sells it to someone else, the mortgagee […]

Mortgage banker

What is a Mortgage Banker? A mortgage banker is a corporation, individual, or institution that specializes in the origination of mortgage loans. Mortgage bankers fund mortgages with their own money or money borrowed from a warehouse lender. A mortgage banker may decide to keep a mortgage in their portfolio or sell it to an investor […]

Margin

What is Margin? In real estate Margin is the amount of money that an investor must deposit with their broker or exchange to cover the credit risk that the holder provides to the broker or exchange. When an investor borrows cash from a broker to buy financial instruments, borrows financial instruments to sell them short, […]

Maintenance cost

What are Maintenance Costs? You’ll have to pay more than your monthly mortgage and living expenses whether you’re buying an apartment or condominium as an investment property or as your permanent residence. Monthly maintenance costs are an added cost of owning an apartment or condo. The monthly charge is used to fund the costs of […]

Assumption clause

What is an Assumption Clause? An assumption clause in a mortgage contract allows the seller of a home to transfer liability for the current mortgage to the property’s buyer. In other words, the new homeowner takes over the old mortgage and, with it, the property that serves as collateral for the loan. The buyer must […]

Income to debt ratio

What Is the Debt-to-Income (DTI) Ratio? Lenders use the debt-to-income (DTI) ratio to measure your borrowing risk. It is the percentage of your gross monthly income that goes to making your monthly debt obligations. Debt-to-Income ratio explained Debt-to-income ratio (DTI) is the percentage of a consumer’s monthly gross income that goes toward debt repayment in […]

Lifetime cap

What is a Lifetime Cap? The term lifetime cap refers to the maximum interest rate allowable on an adjustable-rate mortgage (ARM). This cap applies to the entire duration of the mortgage.  Lifetime cap explained Lifetime caps limit the risks associated with the substantial interest rate increases over the life of the mortgage for the borrower, […]

Lien

What is a Lien? A lien is a claim or legal right against assets used as collateral to repay a debt. A lien can be established by a creditor or a judicial judgment. A lien is used to secure an underlying obligation, such as debt repayment. The creditor may be entitled to seize the asset […]

Mortgage loan discount points

What are Mortgage Loan Discount Points? Discount points are a form of prepaid interest or fee that mortgage borrowers can buy to reduce the amount of interest they pay on their following monthly payments—in effect, spending more up front to pay less later. Discount points can be deducted from your taxes. Selling or refinancing the […]

Liquidity

What is Liquidity? The efficiency or convenience with which an asset or security can be converted into immediate cash without influencing its market price is referred to as liquidity. Cash is the most liquid of all assets. Liquidity can be summarized with these three key factors: The ease with which an asset, or security, can […]

Joint tenancy

What is Joint Tenancy? A legal structure in which two or more persons own a property together, each with equal rights and liabilities, is referred to as “joint tenancy.” Married and unmarried couples, acquaintances, family, and business associates can all form joint tenancies. This legal relationship creates a right of survivorship, which means that if […]

Loan origination fee

What is a Loan Origination Fee? An advance price made by a lender to process a new loan application is known as a mortgage origination fee. The fee is a reward for completing the loan. Loan origination costs are expressed as a percentage of the entire loan amount, and in the United States, they typically […]

Interest rate cap

What is an Interest Rate Cap? The regulations governing interest rate rises on variable-rate credit products are referred to as an interest rate cap structure. An interest rate cap on variable-rate debt sets a limit on how high interest rates can grow. Interest rate limitations can be put in place for any variable rate instrument. […]

Deed of trust

What is a Deed of Trust? A trust deed, sometimes known as a deed of trust, is a type of real estate contract used in the United States. It’s a legal document that comes into play when one party borrows money from another to buy a house. The trust deed is a contract between a […]

Escape clause

What is an Escape Clause? An Escape clause, also known as an contingency clause, is a contract term that requires a specified event or action to occur before the contract is declared legitimate. The other party is relieved from its duties if the party who is obligated to satisfy the contingency clause is unable to […]

Housing affordability index

What is the Housing Affordability Index?   An affordability index is a measurement of the average person’s capacity to buy a certain item, such as a home in a specific region, or to afford the region’s overall cost of living. The National Association of Realtors publishes a monthly index. A value of 100 indicates that […]

Graduated payment mortgage

What is a Graduated Payment Mortgage (GPM)? A Graduated Payment Mortgage (GPM) is a fixed-rate mortgage with payments that gradually grow from a low starting point to a higher final point. Payments will typically increase by 7% to 12% per year from their initial base payment level until the full monthly payment amount is attained. […]

Homeowners insurance

What is Homeowners Insurance? Homeowners insurance is a type of property insurance that covers losses and damages to a person’s home, as well as their belongings and other assets. Liability coverage is included in homeowner’s insurance for accidents that occur in the home or on the property. Homeowners insurance explained Home insurance, often known as […]

Home inspection

What is a Home Inspection? A home inspection is a restricted, non-invasive assessment of a home’s condition, usually in conjunction with its sale. Home inspections are usually performed by a home inspector who has received the necessary training and credentials. The inspector develops and submits a written report of findings to the customer. After that, […]

Hazard insurance

What is Hazard Insurance? Hazard insurance protects property owners from damage caused by fires, strong storms, hail/sleet, and other natural disasters. The property owner will get compensation to cover the cost of any damage sustained as long as the specific weather event is covered under the policy. The property owner is usually expected to pay […]

Good faith estimate

What is a Good Faith Estimate? A good faith estimate (GFE) is a document that explains the expected expenses and parameters of a reverse mortgage loan offer, allowing borrowers to compare lenders and select the best deal for their circumstances. Lenders were obligated to deliver GFEs to consumers within three days of a conventional mortgage […]

Fair market value

What is a Fair Market Value? In its most basic form, fair market value (FMV) refers to the price at which an item would sell on the open market. Fair market value has come to represent the price of an asset under the following common set of circumstances: prospective buyers and sellers are reasonably knowledgeable […]

Flood insurance

What is Flood Insurance? Flood insurance is a sort of property insurance that protects a home from losses caused by floods, such as severe or prolonged rain, melting snow, coastal storm surges, clogged storm drainage systems, or levee dam collapse. A flood is considered a catastrophic occurrence in many places, and the damage or devastation […]

Fixed rate nortgage

What is a Fixed-rate Mortgage? A fixed-rate mortgage has a fixed interest rate that does not alter over the term of the loan. Although the amount of principle and interest paid each month vary, the overall payment remains consistent, making budgeting for homeowners simple. The partial amortization schedule below shows how the amounts paid for […]

Escrow

What is Escrow? Escrow is a legal term that refers to a financial instrument in which a third party holds an asset or escrow money on behalf of two other parties who are completing a deal. Escrow accounts may include escrow fees maintained by agents who hold monies or assets until they receive proper instructions […]

Equal credit opportunity act

What is the Equal Credit Opportunity Act? The Equal Credit Opportunity Act (ECOA) is a federal civil rights statute that prohibits lenders from discriminating against credit applicants based on factors other than their capacity to repay the loan. ECOA protects consumers from discrimination in lending based on race, colour, religion, national origin, sex, marital status, […]

Virginia

Best Refinancing In Virginia This guide will cover all aspects for Cash Out Refinancing in Virginia including: Rates, Work it works, Options, Pros and Cons, Calculators and Benefits. Cash out refinancing is a refinancing option in which an existing house loan is replaced with a new one that is larger than the old one’s balance. […]

North Carolina

What are the Closing Costs in North Carolina? Closing cost in North Carolina typically range between $3000 and $5000, or 2% to 5% of the loan amount, depending on the size of the loan. Closing costs are the additional fees associated with purchasing a home. Third parties must be reimbursed for their involvement in the […]

Equity

What is Home Equity? The value of a homeowner’s interest in their home is known as home equity. In other words, it is the current market value of the property (less any liens that are attached to that property). As more mortgage payments are made and market forces effect the property’s current worth, the amount […]

Easement

What is an Easement? An easement, also known as an easement arrangement, is a real estate term that describes a situation in which one party uses the property of another for a fee in exchange for the right of easement. Public utility corporations frequently purchase easements in order to build telephone poles or run pipes […]

Debt

What is a Debt? Debt is when one party borrows something from another, usually money. Many businesses and individuals utilize debt to finance significant purchases that they would not be able to make under normal circumstances. A debt agreement allows the borrowing party to borrow money on the condition that it be repaid at a […]

Duplex

What is a Duplex? Two living units are joined to each other in a duplex house plan, either next to each other as townhouses or condominiums, or above each other as apartments.  A building with two attached units on two separate properties, on the other hand, is commonly referred to as a duplex in portions […]

Down payment

What is Down Payment? A down payment has two purposes: it ensures that the lending institution has enough capital to issue money for a loan in fractional reserve banking systems, and it allows the lender to collect a portion of the loan total if the borrower defaults. The asset is used as collateral to protect […]

United States Department of Housing and Urban Development

What is the United States Department of Housing and Urban Development (HUD)? The U.S. Department of Housing and Urban Development (HUD) is one of the federal government’s executive agencies. It is responsible for enforcing federal housing and urban development legislation. It is led by the Secretary of Housing and Urban Development, who is a member […]

Debt to Income ratio

What is Debt-to-Income Ratio? Debt-to-income ratio (DTI) is the percentage of a consumer’s monthly gross income that goes toward paying debts. DTIs often cover more than just debts; they can include principal, taxes, fees, and insurance premiums as well.  Debt-to-Income explained Lenders use the debt-to-income (DTI) ratio to measure your borrowing risk. It is the […]

Mortgage curtailment

What is Mortgage Curtailment? When a borrower makes an extra payment against the principle owing in order to lower the outstanding sum, this is known as principal curtailment. Partial curtailment is a term used to describe this situation. Curtailment can be used to pay down a mortgage debt if the homeowner pays off the sum […]

Co-signer

What is a Co-Signer? A Co-Signer in finance is a guarantee made by one party (the guarantor) to undertake a borrower’s financial obligation if the borrower defaults. A guarantee can be restricted or limitless, implying that the guarantor is responsible for merely a portion or the entire amount.A Co-Signer is a guarantee made by one […]

Convertible mortgage

What is a Convertible Loan? A Convertible Mortgage is an adjustable-rate mortgage (ARM) that allows the borrower to convert to a fixed-rate mortgage once a certain amount of time has passed. Convertible ARMs are sold as a method to profit from declining interest rates, but they generally come with stipulations. Switching from an ARM to […]

Construction loan

What is a Construction Loan? A construction loan is a more particular sort of loan in the United States Financial Services business, created for building and includes features such as interest reserves, where repayment ability may be reliant on something that may only happen after the project is completed. As a result, the distinguishing characteristics […]

Conforming loan

What is Conforming Loan? A conforming loan is a mortgage loan that fulfills Fannie Mae and Freddie Mac’s underwriting requirements and does not exceed the conforming loan limit in the United States. The most well-known criterion is the loan size, which was set at $647,200 for one-unit single family residences in the continental US in […]

Condominium

What is a Condominium? A condominium, often known as a condo, is a big property complex made up of numerous apartments, each of which is individually owned. A nonexclusive stake in some “community property” owned by the condominium management is frequently included in ownership. Condominium management is often composed of a board of unit owners […]

Commitment fee

What is a Commitment Fee? A commitment fee is usually defined as a flat charge or a predetermined percentage of the loan amount that has not yet been released. A commitment fee is charged by the lender as compensation for keeping a line of credit open or guaranteeing a loan at a future date. The […]

Collateral

What is Collateral? Collateral is a term used to describe an asset that a lender accepts as security for a loan. Depending on the purpose of the loan, collateral might be real estate or other types of assets. For the lender, the collateral serves as a type of insurance. If the borrower defaults on their […]

Closed end mortgage

What is a Closed-end Mortgage? A closed-end mortgage, also known as a closed mortgage, is a form of loan that can’t be prepaid, renegotiated, or refinanced without the lender charging breakage fees or other penalties. This form of loan is appropriate for homeowners who do not expect to move very soon and are willing to […]

Certificate of title

What is a Certificate of Title?   A Certificate of Title is a legally binding document issued by a state or municipality that identifies the owner(s) of personal or real property. A certificate of title is a document that proves the owner’s right to possession. It usually refers to real land, although it might also […]

Bond

What is a Mortgage Bond? A mortgage bond is backed by a mortgage (or a group of mortgages) that is often backed by real estate assets and real property, such as equipment. Mortgage bonds are generally safer than corporate bonds and, as a result, offer a lower rate of return. Mortgage bond explained A mortgage-backed […]

Capitalization rate

What is Capitalization Rate? The capitalization rate (or “cap rate”) is the most often used metric for evaluating the profitability and return potential of real estate investments. The cap rate essentially shows a property’s yield over a one-year time horizon, presuming the property was purchased with cash rather than a loan. The capitalization rate is […]

Bridge loan

What is a Bridge Loan? A bridge loan is a short-term loan intended to bridge the gap between permanent financing and the repayment of an existing debt. It provides rapid cash flow to the user, allowing them to satisfy current obligations. Bridge loans are short-term loans that last up to a year, with high interest […]

Biweekly mortgage

What is a Biweekly Mortgage?   A Biweekly mortgage is a loan in which payments are made every two weeks instead of monthly. Payment options include monthly, semi-monthly, bi-weekly, weekly, accelerated bi-weekly, and accelerated weekly. The majority of biweekly payment plans are provided by third parties for a cost. While making biweekly payments will shorten […]

Balloon mortgage

What is a Balloon Mortgage? A Balloon mortgage is a real estate loan with a low or no monthly payment term that ends with the borrower having to pay off the entire total in one lump sum. The interest rate given is frequently low, and the monthly payments, if any, may be interest only. Balloon […]

Appraisal

What is an Appraisal? The process of determining a property’s value is known as appraisal, or real estate appraisal. Due to the rarity of real estate transactions and the uniqueness of each property, unlike corporate stocks, which are traded on a regular basis and are all the same, assessments are frequently required. Mortgage loans are […]

Amenities

What are Amenities? An amenity is something that is believed to enhance an area, contribute to its enjoyment, and so raise its value in property and land use planning. The number and type of guest rooms, as well as the availability of amenities such as elevators, Wi-Fi, restaurants, parks, Community centers, swimming pools, golf courses, […]

Assessment

What is an Assessment?   When the value of an asset must be determined for taxation purposes, an assessment occurs. Certain types of property, such as commercial properties, are assessed on an annual basis. Home values are frequently assessed each year, however certain taxing authorities may only do so every five years. Houses are evaluated […]

Annual percentage rate

Annual Percentage Rate (APR) explained It is a finance charge expressed as an annual rate. The term annual percentage rate of charge (APR), corresponding sometimes to a nominal APR and sometimes to an effective APR (EAPR), is the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a […]

Amortization

Amortization explained Amortization is a strategy used in accounting to reduce the book value of a loan or intangible asset over a predetermined period of time. When it comes to a loan, amortization refers to the process of spreading out payments over time. Amortization is similar to depreciation when applied to an asset. Amortization process […]

Adjustable rate mortgage

Adjustable Rate Mortgage (ARM) explained Borrowers who are willing to accept the risk of interest rate increases can usually cut their initial payments with an ARM. There is evidence that customers choose contracts with the lowest starting rates, such as in the United Kingdom, where customers are more concerned with monthly mortgage expenses. Consumer decisions […]

Appreciation

What is Appreciation? Appreciation is an increase in the price or value of assets. It may refer to appreciation of company stocks or bonds held by an investor, an increase in land valuation, or other upward revaluation of fixed assets. Time appreciation occurs Without the investor’s, appreciation might happen in a passive and progressive manner. […]

Acceleration clause

Acceleration Clause Explained The activation of an acceleration provision in a mortgage contract may serve as a forerunner to a foreclosure action, in which a lender may legally compel the sale of the property obtained with the mortgage loan. The lender may seize the proceeds from any later sale of the property to recoup any […]

Property abstract

Property abstract explained A Property abstract is a condensed history of a property’s title, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property, as well as a certification by the abstractor that the history is complete and accurate. The abstract of title provides the raw data needed […]

Credit score

  What credit score is needed for a VA loan? The VA does not set a credit score requirement for VA loans, however, most mortgage lenders will want to see a credit score of at least 620 FICO. Although some lenders are willing to go lower, borrowers can expect more scrutiny and lender requirements. Credit […]

Virginia

What are the Closing Costs in Virginia? Closing costs in Virginia typically range between $3000 and $5000, or 2% to 5% of the loan amount, depending on the size of the loan. Closing costs are the additional fees associated with purchasing a home. Third parties must be reimbursed for their involvement in the transaction, hence […]

Certificate of eligibility (COE)

 What is a Certificate of Eligibility (COE)? Certificates of Eligibility (COEs) are documents produced by theDepartment of Veterans Affairs (VA) to inform your VA loan lender thatyou meet the VA’s eligibility requirements for VA loans. As well asproviding your lender with information about your entitlement and fees,it also confirms your eligibility. As an entitlement, the […]

Occupancy requirements

What are the Occupancy requirements for VA loan? Here are the Occupancy requirements for a VA loan: For veterans and active-duty personnel are required to certify that the property will be their primary residence. The VA considers 60 days to be a “reasonable time” for homebuyers to move into their new homes after the loan […]

How long should you stay in your house after refinancing

How Long Should You Stay In Your House After Refinancing? Refinancing does not set a time limit on how long you must remain in your home. The days, weeks, and months are not carved into stone. Your situation and the terms of your loan will determine the answer. It may not be beneficial to leave […]

Down payment

What is the Down Payment on a VA Loan? The down payment on a VA Loan is 0%, according to the U.S. Department of Veterans Affairs.  VA loans do not require down payments because the government guarantees the loan, meaning the lender can recover between 25% and 50% of the borrowed amount in the event […]

Georgia

2022 Closing Costs in Georgia Closing costs in Georgia are expected to range from $3000 to $5000, or 2% to 5% of the loan amount, depending on the size of the loan. Closing costs are the extra fees that come with buying a home. The majority of closing costs are charged by third parties who […]

How long do you have to pay mortgage insurance?

How long do you have to pay mortgage insurance? Private mortgage insurance, or PMI, is a type of insurance that lenders require for certain types of mortgages, such as conventional loans. When the down payment is less than 20% of a home’s purchase price, conventional mortgages backed by Fannie Mae or Freddie Mac require private […]

How long does a mortgage pre approval last?

How Long Does a Mortgage Pre Approval Last? The length of time a pre-approval lasts varies by lender, but in most cases, it is good for at least 90 days.  Many lenders’ pre-approvals will not expire until the credit expires, which is 120 days.  If your financial status changes dramatically during the pre-approval timeframe, your […]

South Carolina

Mortgage Rates Today Get Refinancing in South Carolina Are you looking for the Best Refinance Rates in South Carolina. Consumers frequently seek to refinance their mortgage in order to receive better borrowing terms, often as a result of changing economic conditions. Lowering one’s fixed interest rate to cut payments over the life of the loan, […]

Funding fee

What Is A VA Funding Fee? In the article below we will discuss what a VA Funding Fee is and all aspects of the VA Funding Fees including Charts, Exemptions, Calculators and Refunds for 2022. The Florida VA funding fee is a single lump-sum payment made on a house loan by an active veteran or […]

Pay lump sum off Mortgage

Should I pre pay a lump sum  or increase monthly payment on mortgage? Almost all mortgages allow you to make extra payments to your principal on a monthly or annual basis. Paying extra payments toward your loan, regardless of the amount of funds given to the principal, makes a significant difference in the amount of […]

South Carolina

2023 Closing Costs in South Carolina Closing costs in South Carolina are expected to range from $3000 to $5000, or 2% to 5% of the loan amount, depending on the size of the loan. Closing costs are the extra fees that come with buying a home. The majority of closing costs are charged by third […]

650 credit score

Is 650 a Good Credit Score? 650 FICO® credit ratings are in the fair range, indicating the individual has had some credit  difficulties such as 30-day late payments. People with significant difficulties on their credit records, such as bankruptcies or foreclosures, will see a significant drop in their FICO® Scores, but these incidents can be […]

640 credit score

What is a 640 credit score? 640 FICO® credit ratings are in the poor to fair range, indicating the individual has had some credit  difficulties such as 30-day late payments. People with significant difficulties on their credit records, such as bankruptcies or foreclosures, will see a significant drop in their FICO® Scores, but these incidents […]

630 credit score

Is 630 a Good Credit Score? 630 FICO® credit ratings are in the fair range, indicating the individual has had some credit  difficulties such as 30-day late payments. People with significant difficulties on their credit records, such as bankruptcies or foreclosures, will see a significant drop in their FICO® Scores, but these incidents can be […]