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Mortgage Loan Terms

  • Amortization: The process of paying off a debt over time through fixed monthly payments. Each payment is broken down into interest and principal portions.
  • Adjustable Rate Mortgage (ARM): A type of mortgage that has the same interest rate for a fixed number of years, but then allows an annual adjustment to the interest rate after the fixed rate period ends.
  • Down Payment: The upfront payment of a portion of the home purchase price.
  • Fixed Rate Mortgage: A type of mortgage that has the same interest rate throughout the entire loan term.
  • HOA Fees: Monthly fees paid by the borrower to a homeowners association (HOA) for the use of common areas as well as the maintenance and improvement of the complex.
  • Homeowner's Insurance: A type of insurance that pays for the damage or loss of your home and belongings.
  • Home Purchase Price: The purchase price of a home.
  • Interest Rate: A percentage of the loan amount paid to the lender.
  • Loan Amount: The total amount you want to borrow from the lender.
  • Loan Term: The number of years a borrower makes monthly payments towards a home loan.
  • P&I: The monthly mortgage payment that includes amounts for principal and interest.
  • PITI: The monthly mortgage payment that includes amounts for principal, interest, property taxes, and homeowner's insurance.
  • Property Tax: An annual tax paid to the local government based on the value of the property.