Anywhere in the USA

Posted by  on Apr 16, 2009
If you are looking into mortgages, one of the best ideas is to familiarize yourself with all the mortgage terms. Whether you are looking for South Carolina mortgage, Rhode Island mortgage, Massachusetts mortgage, Virginia mortgage, or any other mortgage in the United States, the same basic rules apply. In order to help get you used to these ideas we have listed a few important mortgage terms, starting with a blanket mortgage.

A blanket mortgage is a mortgage covering at least two pieces of real estate as security for the same mortgage. Assumption is the agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt, unlike a new mortgage where closing cost and new, probably higher, market-rate interest charges will apply.

Cash flow the amount of cash derived over a certain period of time from an income-producing property. The cash flow should be large enough to pay the expenses of the income producing property.

The certificate of Reasonable Value is an appraisal issued by the Veterans Administration showing the property's current market value. An adjustable rate mortgage or ARM is a mortgage in which the interest rate is adjusted periodically based on a pre-selected index.

Recording fees money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public records. A bridge loan is a second trust that is collateralized by the borrower's present home allowing the proceeds to be used to close on a new house before the present home is sold.

A renegotiable rate mortgage is a loan in which the interest rate is adjusted periodically. See adjustable rate mortgage. An adjustment date is the date that the interest rate changes on an adjustable-rate mortgage.

A balloon mortgage is a loan which is amortized for a longer period than the term of the loan. Usually this refers to a thirty-year amortization and a five year term. At the end of the term of the loan, the remaining outstanding principal on the loan is due. This final payment is known as a balloon payment.

A RESPA is short for the Real Estate Settlement Procedures Act. RESPA is a federal law that allows consumers to review information on known or estimated settlement cost once after application and once prior to or at a settlement. The law requires lenders to furnish the information after application only.

An adjusted basis is the cost of a property plus the value of any capital expenditures for improvements to the property minus any depreciation taken. Refinance is obtaining a new mortgage loan on a property already owned.

A borrower is one who applies for and receives a loan in the form of a mortgage with the intention of repaying the loan in full. An assumption fee is the fee paid to a lender when an assumption takes place. Acceleration is the right of the mortgagee to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor, or by using the right vested in the Due-on-Sale Clause.


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