The Holden Team | Hopkinton Real Estate, Southborough Real Estate, Ashland Real Estate


Whether you’re a first time homebuyer or a seasoned homeowner, the terminology of mortgages can be confusing. Since buying a home is such a huge financial decision, you’re also going to want to make sure you understand every step of the process and all of the conditions and fees along the way.

In this article, we’re going to explain some of the common terms you might come across when applying for a home loan, be it online or over the phone. By learning the basic meaning of these terms you’ll feel more confident and prepared going into the application process.

We’ll cover the acronyms, like APRs and ARMs, and the scary sounding terms like “amortization” so that you know everything you need to about the terminology of home loans.

  • ARM and FRM, or adjustable rate vs fixed rate mortgages. Lenders make their money by charging you interest on your home loan that you pay back over the length of your loan period. Adjustable rate mortgages or ARMs are loans that have interest rates which change over the lifespan of your loan. You may start off at a low, “introductory rate” and later start paying higher amounts depending on the predetermined rate index. Fixed rate mortgages, on the other hand, remain at the same rate throughout the life of the loan. However, refinancing on your loan allows you to receive a different interest rate later down the road.

  • Amortization. It sounds like a medieval torture technique, but in reality amortization is the process of making your life easier by setting up a fixed repayment schedule. This schedule includes both the interest and the principal loan balance, allowing you to understand how long and how much money will go toward repaying your mortgage.

  • Equity. Simply state, your equity is the the amount of the home you have paid off. In a sense, it’s the amount of the home that you really own. Your equity increases as you make payments, and having equity can help you buy a new home, or see a return on investment with your current home if the home increases in value.

  • Assumption and assumability. It isn’t the title of a Jane Austen novel. It’s all about the process of a mortgage changing hands. An assumable mortgage can be transferred to a new buyer, and assumption is the actual transfer of the loan. Assuming a loan can be financially beneficial if the home as increased in value since the mortgage was created.

  • Escrow. There are a lot of legal implications that come along with buying a home. An escrow is designed to make sure the loan process runs smoothly. It acts as a holding tank for your documents, payments, as well as property taxes and insurance. An escrow performs an important function in the home buying process, and, as a result, charges you a percentage of the home for its services.

  • Origination fee. Basically a fancy way of saying “processing fee,” the origination covers the cost of processing your mortgage application. It’s one of the many “closing costs” you’ll encounter when buying a home and accounts for all of the legwork your loan officer does to make your mortgage a reality--running credit reports, reviewing income history, and so on.  


Welcome to this 3 bedroom, 2 1/2 bath, 2 car attached garage spacious home with gleaming hardwood floors. The fireplaced living room has a bow window and built in shelves. The dining room opens into the stainless steel applianced kitchen. The lower level features a large family room with a dry-bar, home office, bonus room, full bath, walk-in cedar closet with exterior access. The three season porch opens to a patio with an inground pool with a new liner, coping and heater. There are 2 laundry hook-ups, one in the basement and the stackable washer and dryer are in the kitchen. Recent upgrades include boiler, water heater,oil tank, many Harvey windows and garage door. Close to town, shopping, and highways. Stop by the open house Sunday 1:00-3:00.

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5 Foster St, Oxford, MA 01540

Single-Family

$299,900
Price

9
Rooms
3
Beds
2/1
Full/Half Baths
Welcome to this 3 bedroom, 2 1/2 bath, 2 car attached garage spacious home with gleaming hardwood floors. The fireplaced living room has a bow window and built in shelves. The dining room opens into the stainless steel applianced kitchen. The lower level features a large family room with a dry-bar, home office, bonus room, full bath, walk-in cedar closet with exterior access. The three season porch opens to a patio with an inground pool with a new liner, coping and heater. There are 2 laundry hook-ups, one in the basement and the stackable washer and dryer are in the kitchen. Recent upgrades include boiler, water heater, many windows and garage door. Close to town, shopping, and highways. Stop by the open house Sunday 1:00-3:00.
Open House
Sunday
July 15 at 1:00 PM to 3:00 PM
Stop by Sunday
Cannot make the Open Houses?
Location: 5 Foster St, Oxford, MA 01540    Get Directions

Similar Properties




5 Foster St, Oxford, MA 01540

Single-Family

$299,900
Price

9
Rooms
3
Beds
2/1
Full/Half Baths
Welcome to this 3 bedroom, 2 1/2 bath, 2 car attached garage spacious home with gleaming hardwood floors. The fireplaced living room has a bow window and built in shelves. The dining room opens into the stainless steel applianced kitchen. The lower level features a large family room with a dry-bar, home office, bonus room, full bath, walk-in cedar closet with exterior access. The three season porch opens to a patio with an inground pool with a new liner, coping and heater. There are 2 laundry hook-ups, one in the basement and the stackable washer and dryer are in the kitchen. Recent upgrades include boiler, water heater, many windows and garage door. Close to town, shopping, and highways. Stop by the open house Sunday 1:00-3:00.
Open House
Sunday
July 15 at 1:00 PM to 3:00 PM
Stop by Sunday
Cannot make the Open Houses?
Location: 5 Foster St, Oxford, MA 01540    Get Directions

Similar Properties



Finding a mortgage lender should be easy, particularly for homebuyers who want to purchase a high-quality residence without having to worry about spending too much. However, many mortgage lenders are available nationwide, and the sheer volume of lenders can make it difficult to choose the right one.

Lucky for you, we're here to help you streamline the process of selecting the ideal lender.

Now, let's take a look at three tips that homebuyers can use to accelerate the process of choosing the perfect lender.

1. Know Your Credit Score

Your mortgage interest rate may vary based on your credit score. As such, you should learn your credit score before you begin your search for the right lender. This will enable you to boost your credit score if necessary – something that may help you get a preferred mortgage interest rate.

You are eligible for one free copy of your credit report annually from each of the three major credit reporting agencies (Equifax, Experian and TransUnion). Request a copy of your credit report, and you can find out your credit score and map out your search for the ideal mortgage lender accordingly.

2. Meet with Several Mortgage Lenders

There is no shortage of mortgage lenders in cities and towns around the country. Therefore, you should allocate the necessary time and resources to meet with several credit unions and banks to explore all of your mortgage options.

Each lender can provide details about fixed- and adjustable-rate mortgages, how these mortgages work and other pertinent mortgage information. This information can help you make an informed decision about a mortgage.

In addition, don't hesitate to ask questions when you meet with a mortgage lender. If you obtain plenty of information from a mortgage lender, you'll be able to understand the pros and cons of various mortgage options and make the best choice possible.

3. Review a Mortgage Closely

A mortgage may enable you to secure your dream residence, but it is important to understand all of the terms and conditions associated with a mortgage before you select a lender.

For example, if you decide to purchase a condo, your mortgage might only cover the costs of your property. Meanwhile, you still may be responsible for condo homeowners' association fees that total hundreds of dollars each month, so you'll need to budget properly.

Of course, you should feel comfortable working with a mortgage lender as well. The ideal mortgage lender should be available to answer your concerns and questions at any time and help you stay on track with your monthly mortgage payments.

If you need extra assistance as you consider the mortgage lenders in your area, you can reach out to a real estate agent for additional support. This housing market professional can provide insights into mortgage interest rates and may even be able to connect you with the top local lenders.

Take the guesswork out of finding the right mortgage lender – use these tips, and you can move one step closer to getting the financing you need to buy your dream residence.




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