Mortgage Terms that You Might Like to Know
Here are several mortgage terms that you might like to get familiar with before you get involved with mortgages or if you are already involved in mortgages. It is only fair that you know the terms since you do not want to be in the dark when discussing your mortgage. Knowledge is power and you sure could use some when it comes to talking about mortgages.
First term on the list is something is for those people that in the mortgage world are called Blemished Borrowers. It might make you think of someone with skin problems but since this is mortgage this term is for those borrowers that are considered risky. These make next to no down payment and have no way of fully documenting what their income is and what their assets are. The property which they own is not a singe-family house but entirely something else. These blemished borrowers are those that have low credit rating and they have a small income when compared to the debt that they owe.
Next term to add to your mortgage vocabulary is Bridge Loan and this is a loan that is short-term that comes from the bank. This loan acts as a bridge for that period which is between the closing dates of the home purchase and that of a particular home sale. You may get an unsecured bridge loan if you are the borrower and you have an existing contract that you have an existing home to sell. On the other hand, secured bridge loans can be obtained even without that contract.
Another term that you may want to know is something that is called Builder-Financed Construction which is very simple really. It just means that you have the people or person building your house to do the financing. It’s that simple and the term really does speak for itself.
Last, is the term Buy-Down. There are two types of buy downs, one being the permanent which is when you use the point payments in trade for lower interest rates. The other one is the temporary which is concentrating on reducing the interest rates during the early years.