Understanding what a mortgage entails may seem daunting, but feeling confident about each moving part makes the journey to homeownership much easier. When you work with established Gainesville custom home builder, GW Homes, and their team of local preferred lenders, you can be assured these important mortgage concepts will no longer cause uncertainty:
Adjustable Rate Mortgage: A loan with a fluctuating interest rate based on an index.
Amortization: A technique used to pay off debt with a fixed repayment schedule.
Appraisal: An estimate of the market value of a home’s worth.
Debt-to-Income Ratio: A measure used to determine one’s ability to handle monthly mortgage payments and repay debt.
Equity: The portion of a property (home) that a homeowner truly owns. If money is borrowed to purchase the home, the lender has an interest in the property until the loan is paid off.
Escrow: Money or property held to cover conditions of sale that have to be met.
Good Faith Estimate: A document that spells out the payments that are due at the closing of a mortgage loan.
Homeowner’s Insurance: Property insurance that covers home damages and losses.
Loan-to-Value Ratio: The ratio of a home loan to the value of the home.
Origination Fee: The cost to process a loan upon entering an agreement.
Private Mortgage Insurance: Insurance that borrowers pay when they put down a down payment of 20% or less.
Truth in Lending: A federal law that provides information about the costs of a homeowner’s credit.
There are many components to a mortgage, but understanding them doesn’t have to be as difficult as it seems. With a little time and research, you can say “goodbye” to your mortgage fears and enjoy the process of buying a home.