For those people who are about to get their mortgages for the very first time, it could be a very scary point in their lives since mortgages are indeed rather complicated and very serious business. Certainly it is not something that you take with a grain of salt or with mock seriousness. However, all you will need to do in order for it to not be so daunting is to gather Â as much information as you can about mortgage so that you know what you are getting into and what to expect and also, to make wiser and more informed decisions. This way, you will be sure that you will not get into anything binding that you cannot afford or handle. The first thing that you will have to know is some of the basic terminology that is used in mortgage. The next three terms are very common and you will certainly want to know what they mean for you.
First is Term. You may say that you already know what this is but do you know what it means in mortgage terminology? This means the length of time that you must pay off the loan that you got. It might range from 10 years to even 30 years for some. The longer the time that you are given to pay it off, the lower the amount of the payments may be but sometimes, the shorter the term, the lower the interest.
Now the next one is Rate. This means that thing that was mentioned above; the interest rate. This talks about the amount that you will pay the bank in order to borrow money from the bank. It really depends on your credit rating and the amount of money that you can afford to shell out. Depending on your mortgage loan program, your rates can vary.
Last but certainly not the least is Cost. This means the closing costs which happen to be included in every mortgage.
There are rare programs that do not charge the closing costs but those are very rare indeed. If the lender does not charge you a closing cost, it means that they are getting a large commission that can cover the closing costs. Thus, the no closing costs deal that they offer you.