Have you ever been caught up in a conversation where people are talking about their mortgages? Have you ever talked to your mortgage broker and felt like he was talking gibberish? If you have, then maybe you need a quick review on some terms that may be used when discussing mortgages. They are simple enough words; it’s just that they have different meanings when used in the mortgage context. It may seem daunting but some of the terms are pretty obvious and some are even downright funny. If you are interested in knowing more mortgage terms, read on and improve your vocabulary.
First term is COSI which stands for cost of savings index. This is only one of the many interest rates indexes that are in use to help determine the adjustments to be made on interest rates when it comes to adjustable rate mortgages or ARM.
Next term you will get to know is Co-Signing a Note. Seems pretty obvious doesn’t it? But for formality’s sake here is what it means- this is about assuming some responsibility for a loan that someone else takes out. You have to understand that it may not be your loan that you are co-signing, but you are taking responsibility for it so that means that when you co-sign a note, you are undertaking a huge risk. There are big hazards that you could potentially meet when you co-sign for a mortgage.
Another term that you may want to know is the Credit Report. Which is simple a certain report that comes from a credit bureau. This report will contain very detailed info that shows how credit-worthy you are and will even show your credit history.
With the credit report, we have the Credit Score. This as you know, is made up of only a single number that is actually a person’s score. These credit scores are used to indicate how credit worthy a person is. A Person’s credit score is always taken into account when he or she tries to apply for a mortgage and you have to know that your credit score is affected by a whole lot of things that may either bring it up or pull it down.