Whether you’re a new buyer searching for your first home, or a long term homeowner, understanding mortgage definitions can give you a better grasp on how to navigate property ownership in ways most beneficial to you.
Balloon loan
If you’re in the market for your next home and know your financial standing will increase in the future, consider inquiring about a balloon mortgage loan.
This loan type consists of lower monthly payments at the start of the loan process, with one large sum paid at the closing of the loan term. These loans are associated with short-term loans and with a fixed rate mortgage and interest is typically low.
Discount points
Discount points allow you to get a lower interest rate on your loan, lowering your monthly mortgage payment. One point is equivalent to 1 percent of the mortgage loan amount and the cost of discount points is due during the closing of the home in cash.
Reverse mortgage
If you’re over the age of 62, a reverse mortgage allows homeowners to borrow from the equity their home has built without monthly payments. This is great for securing a larger sum of financing, but it decreases home equity as it’s not paid down.
Caps
Caps are regulations in place to protect consumers and limit the number of times mortgage loans can change on an adjustable mortgage.
Settlement service provider list
A settlement service provider list (SSPL) is a comprehensive list provided by mortgage lenders of service lenders to shop from to aid in the closing process.
Property inspection waiver
This document provides legal leeway to bypass the home inspection process during a home sell.
Making mortgage payments is a large commitment, so understanding the terms associated with the process can help prepare you before working with a mortgage lender.
About the Author
Carolyn Andrews
Carolyn Andrews has over 30 years licensed Brokerage experience in both California and Colorado. Born in England, Carolyn moved to California in 1980, then relocated to Denver, Colorado in 1991. Carolyn has also received recognition for Top Sales at RE/MAX Alliance Aurora in 2007-2008 and is a member of the RE/MAX Hall of Fame & Chairman’s Club, as well as a recipient of the ReMax Lifetime Achievement Award. Carolyn has sold over 2000 homes personally in her career. Carolyn has been actively involved in many aspects of the Real Estate business including investment property, luxury homes, mountain resort property, skiin/ski out, REO/default management, loss mitigation, valuations, and disposition. She has been a speaker and panelist at several conferences and has been consulted on many occasions by various organizations in the REO/financial industries for her expertise and served on many boards. She has attended numerous ongoing classes to stay abreast of changes in the ever-evolving Real Estate industry. She is the prior State Director for Colorado for VAREP(Veterans Association of Real Estate Professionals). She is a member of 3 boards of Realtors including Metro Denver, Colorado Springs and Summit County mountain areas. She heads up The Andrews Group and is or has been an active member of NAR, CAR,REOMAC, CIPS, CRS, AREAA, NAPW, NAHREP, and is an original member of the ELITEReal Estate network. She was ranked #1 for most homes sold in Denver 2007 by Denver Board of Realtors, #2 for 2008, and #2 for 2009, #5 in 2010 and #4 in 2011 and has been consistently in the top 10 ever since. Carolyn Andrews has been a top rated Endorsed Local Provider for the Dave Ramsey Organization and also a Top Producing agent for 2018 for the Homelight Company.
