Completing the mortgage process may be confusing, especially with all of the loan-specific terminology. Familiarizing yourself with commonly used mortgage terms will make the process less stressful. Below you will find details on commonly used mortgage terms in Waltham MA.
Commonly Used Mortgage Terms
A pre-approval is a letter provided by a lender indicating the amount and type of loan that a buyer may obtain based on their income, debt, and credit score. This offers greater value than a pre-qualification, which offers simply an “unverified” estimate. Full approval is normally issued after a buyer enters into a contract to purchase a specific piece of real estate.
After a buyer finds a home, a mortgage company carefully reviews the personal paperwork and the data on the property. A loan commitment is subsequently offered to state that the preliminary requirements have been successfully reviewed and that the loan will be fully authorized upon receipt of a few final conditions.
An appraisal is required by a home loan provider to verify the value of real estate. It is completed prior to a mortgage commitment or approval.
There are many charges related to buying and selling a home. These are referenced as closing costs. They often include real estate commissions, transfer taxes, mortgage fees, attorney fees, title insurance, and county recording fees. Pre-paid expenses such as home owners insurance are sometimes also included in the closing cost category, but they are technically a different class of charge billed at closing.
Title insurance relates to defects with a title and the fees associated with defending your ownership. Even though title searches are completed prior to a closing, there may be problems that affect your title to real estate that are not easily identified in a title search. Title insurance is a single bill at closing that protects you the entire time that you remain the owner of a piece of real estate.
Mortgage Insurance (MI)
MI is mortgage insurance and is usually charged on mortgages more than 80% of the purchase price. There is usually an up-front fee and a recurring bill, both calculated against the original loan amount. MI remains in place until the balance drops below 80% of the sale value.
Additional Details On Commonly Used Mortgage Terms In Waltham MA
This article offers details on commonly used mortgage terms in Waltham MA. There might be other terminology that you come across while applying for a mortgage or during the home buying process.