Mortgage Talk in Simple Terms

31 Aug

Mortgage Talk in Simple Terms.  There are many stresses associated with home buying – both financial and emotional, and frankly speaking, it doesn’t help that the process comes with its very own foreign language. While your mortgage broker can help de-mystify these terms, it helps to have a bit of a primer on what some of these terms mean. After all, it’s your money and your home we’re talking about; as a Mortgagor you have a right to understand what you’re reading.

We’ll start with Amortization” and “Term”. Both refer to periods of time in the life of your mortgage, and you’ll want to be sure that you understand the difference.

The amortization” of your mortgage is the length of time that would be required to reduce your mortgage debt to zero, based on regular payments at a specified interest rate. The amortization period is typically 15, 20 or even 30 years, although it can be any number of years or part-years.

You could establish that you are able to make a certain payment each month of say $950 for your $130,000 mortgage at 5.0%. In this case, your amortization period will be just under 18 years. Or you could tell your broker that you’d like to be mortgage-free in just 10 years. With an amortization period of 10 years at the same interest rate, your $130,000 mortgage will cost you about $1,407 per month. That’s a tougher mortgage payment but you would save thousands of dollars in interest. (More than $30,000)

As you arrange your mortgage, then, keep in mind that your amortization period may be fairly long — although the shorter you can make it, the less you’ll wind up paying for your home in the long term.

The “term” of your mortgage will typically be shorter. The “term” is the duration of your mortgage agreement, at your agreed interest rate. This will be a very specific length of time, although you will have several choices. A 6-month mortgage is a very short-term mortgage. A 10-year mortgage will be one of the longest terms, generally with a higher rate of interest to represent the higher degree of uncertainty in the economic outlook.

After your mortgage term expires, you will need to either pay off the balance of the mortgage principal, or negotiate a new mortgage loan at whatever rates are available at that time.

Now, back to the term “Mortgagor”. This is one of three very similar terms: “Mortgagee”, “Mortgagor”, and “Mortgage”.

•    A Mortgagee is the lender of the money: a bank, company, or individual.
•    A Mortgagor is the borrower: the person or persons (or company) that is borrowing the money, and who will pay it back to the mortgagee.
•    The Mortgage, of course, is the legal document that pledges the property as a security for the debt.

Still confused? Don’t worry because when purchasing a home you’ll get everything in writing as well as all the information broken down into simple terms. And when you have questions, ask your lender to clarify before signing any documents.

About the Author:   Millie Gil has been a successful Licensed Real Estate agent for over 25 years in Florida.  Millie is Vice President of Bold Real Estate Group, a boutique agency committed to concierge personalized service for discerning buyers, sellers and renters of residential and commercial properties.  For more information please forward your request to communityinfo@comcast.net

View thousands of listings  www.Northeast-Florida-Relocation.com www.BoldRealEstateGroup.com www.NewYork-Florida-RealEstate.com www.PGAVillage-Homes.com www.TheCascadesAtStLucieWest.com  www.HealthcareRelocationServices.com

Home | Homes For Sale | Homes Short Sale | Search Foreclosures | Open House | Homes For Rent | Renter’s Insurance | Cascades Resources | Cascades Events | Community Tour | Home Virtual Tour | Driving Directions | Cascades Q & A | Cascades Floorplans | Cascades HOA | Community News | Community Providers | Cascades BLOG | Sign-up for a Tour! | Buyer’s Resources | Dream Home Finder | Search MLS | Home Inspection | Home Warranty | Florida Relocation | Property Taxes | Tax Estimator | Insurance Quote | Buy A Short Sale | Seller’s Resource | Market Analysis | Short Sale Inquiry | Our Commitment | Outbound Relocation | Sold Homes Report | Jobs Opportunity | Senior Care Living | Workforce50.com | Retired Brains | Tradition | The Vineyards | Kings Isle 55 Plus | Magnolia Lakes | Sawgrass Lakes | Lake Forest | Lake Charles | Tesoro Homes | The Club SLW | Belmont SLW | Country Club Estates | Lakes At SLW | Viscaya Falls | PGA Village | Verano PGA | Seasons 55 Plus | Tampa Homes | Ocala Homes | Naples Homes | Fort Myers Homes | Jacksonville Homes | Ponte Vedra Homes | Orlando Homes | New Developments | Discovery Tours | Costa Rica Homes | Real Estate Glossary | Golf Course Finder | FREE Moving Quote | Market eNewsletter | Currency Converter | FREE Credit Score | Airport & Flights | About St. Lucie West | Connect Utilities | Global News | Books WebStore | Retirement Homes By State | Local Hospitals | Dining Guide | St. Lucie County Profile | New Developments | Cost of Living Data | Taxes by State | For Buyers | For Sellers | Homeowners | Mortgage Calculator | Mortgage Rates | Loan Quote | Get Pre-Approved | Mortgage Articles | Lending Sources | St. Lucie County | Martin County | Palm Beach County | Indian River | Broward County | Brevard County | Okeechobee County | Miami-Dade County | Referral Network | Real Estate Career | Real Estate School | Guest Bloggers | Contact Us | Testimonials | About Us | Our Blog | About Florida | Se Habla Español | Why Use A REALTOR® | North Florida Homes | Privacy Policy | Florida New Developments

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: