Some Little Tid-bits when Mortgaging a Home:

Facts on mortgages and home buying

If you pay the principal to the mortgage, it would be in order to reduce the remaining balance of that mortgage. This allows one to accrue less interest over time, and not end up paying interest rates through the roof.

The grantor-grantee indexes are two lists of real property transfers. They are in alphabetical order by the last name of the parties and transferring the property from buyer to seller. The grantor index lists the sellers, while the grantee index lists the purchasers. These indexes are designed for the purpose of having a county record of property transfers.

A point is 1 % of the amount of the mortgage, and in real estate they are a form of pre-paid interest. Borrowers can offer to pay lender points in order to obtain lower monthly payments by using this up front payment form. It can be considered a bargain on the side of the buyer. A buyer must have the available funding to pay these points up front because generally, it can take anywhere from five to seven years to regain the cost of paying these points.

The Truth in Lending Act was designed to protect consumers in their credit. It makes sure that the lending arrangement and all costs are put in clear terms, so that the parties involved in the sale can easily understand what they are agreeing to. APR is the annual percentage rate, and it is a value created according to the true annual cost of borrowing expressed through percentage. This true annual cost of borrowing is determined by a government formula.

An adjustable-rate mortgage is a mortgage where the interest changes periodically according to corresponding fluctuations in an index. The initial rate for an ARM is lower than a fixed rate mortgage. This lower rate means lower payments and it may help one qualify for a larger loan.

Essentially a broker is a party that mediates between a buyer and a seller; they attempt to find sellers who wish to sell and buyers who wish to buy. Some of the services they can provide include comparative market analysis, exposure, facilitating a purchase, facilitating a sale, document preparation, full residential appraisal, home selling kits, hourly consulting for a fee, leasing for a fee or percentage of the gross lease value, property management, exchanging property, auctioning property and preparing contracts and leases.

The equity right of redemption is the right of a mortgagor, after foreclosure proceedings commence, to make delinquent payments and fix his/her default. The mortgagor must also pay all costs that have been accumulated as well as the debt and interest to keep the property. Home equity is determined by subtracting the rateable value / outstanding mortgage amount from the estimated value of the property.


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