ANNUAL PERCENTAGE RATE (APR):  A method of calculating the cost of a mortgage, stated as a yearly rate, which includes items such as interest, mortgage insurance and certain points and credit costs. Because it includes items other than interest, it is higher than the actual interest rate

 

APPRAISAL:  A written report by a qualified appraiser that estimates the market value of a property.

 

CLOSING COSTS:  Expenses incurred by buyers or sellers when transferring ownership of real estate. Closing Costs normally include an origination fee, attorney’s fees, taxes, escrow payments, title insurance and discount points.

 

CLOSING DISCLOSURE (CD):  A form that sums up the final terms of your loan and what you pay at closing. The Closing Disclosure allows you to compare the numbers to the Loan Estimate you received earlier. There should not be any significant changes other than those you’ve already agreed to.

 

COLLATERAL:  Property pledged as security to a debt. If the borrower fails to repay the loan, the lender may gain ownership of the Collateral and sell it to recover the loan.

 

DOWN PAYMENT:  The amount of the property’s purchase price that the buyer funds and is not financed with the mortgage. Many loan programs require a percentage of the purchase price as a Down Payment, though there are some programs that do not require any money down.

 

ESCROW:  A special account where monthly insurance and tax payments are held until they are paid out each year. Money is added to the account each time a mortgage payment is made.

 

HOMEOWNER’S INSURANCE:  An insurance policy that includes hazard coverage, covering loss or damage to property, as well as coverage for personal liability and theft.

 

LOAN ESTIMATE (LE):  A form you receive after applying for a mortgage that tells you important facts about the loan you have requested. This form includes the estimated interest rate, monthly payment, and total closing costs for the loan. The Loan Estimate also gives you details about the estimated costs of taxes and insurance, and how the interest rate and payments may change in the future.

 

MORTGAGE INSURANCE (PMI):  An insurance policy that protects the lender against loss in the event of foreclosure. PMI is typically required if the down payment is less than 20% of the sales price. Borrowers usually pay for the coverage in monthly installments, included with the mortgage payment.

 

TITLE INSURANCE:  A policy that guarantees an owner properly has title to a property and can legally transfer title to someone else. Should a claim arise, the title insurer pays any legal damages. A policy may protect the mortgage lender, the home buyer or both.

 

UNDERWRITING: The lender’s process for ensuring your credit and financial information is accurate and you meet the requirements for the loan.

 

There are many different terms, in addition to these, that are specific to mortgage lending. Our experienced staff is glad to assist you with any information you need. Just contact us at 228-831-0933!

A house is the largest purchase most of us will ever make, so it's important to calculate what your mortgage payment will be and how much you can afford. Use our easy mortgage calculator to quickly compute your payment breakdown, schedule and more. Keep in mind, taxes, insurance & PMI will vary with each property and loan program. For questions, please contact a loan officer directly!