legacyrealtygroup

LOAN LANGUAGE:

If you are about to purchase a home, especially for the first time, and have to obtain a mortgage to do so, like the majority of home buyers.....here's some information you should find helpful.

HOW MUCH HOME CAN I AFFORD?:

Depending on the price of the home and the amount of your down payment, generally, lenders want your monthly payment, including insurance and taxes, not to exceed 25-30% of your gross monthly income.

ADJUSTABLE RATE MORTGAGE (ARM):

Interest rates are typically 2% lower than a fixed rate mortgage during the first year and adjusts at specific periods. Most ARMs increase by 2% per adjustment period or a maximum of 6% for the life of the loan.

ANNUAL PERCENTAGE RATE (APR):

Actual rate you pay for a mortgage in long term, including interest, points and certain closing costs.

APPRAISAL:

An official valuation of the market value of a home, required to obtain a mortgage, since the loan amount is predicated on the value. It also assures the buyer that they are not overpaying for the home.

CLOSING:

Generally attended by buyers and sellers and their respective attorneys (not always together), where ownership is transferred.

CLOSING COSTS:

Up front fees, typically include, escrows for real estate taxes, Insurances, & mortgage interest, as well as points (if applicable) along with attorneys fees, transfer fees, property survey, etc.  Buyers closing costs normally range from 2% to 3% of the purchase price. 

INSURANCE:

Hazard Insurance and Title Insurance are both required when obtaining a mortgage. In some case, mortgage Insurance may also be required.

INTEREST:

The cost paid to the lending institution for the money borrowed. Sometimes described as "the price you pay for the privilege of owning a home and living in it without actually paying for it".

LOCK-IN:

Obtaining a set interest rate, that cannot go up while you are awaiting your closing. Usually available for a period of up to 90 days before closing.

PITI:

Abbreviations for Principal, Interest, Taxes, and Insurance, which make up the monthly payment.

POINTS:

Costs a lender may charge. One point equals 1% of the amount borrowed.

For any additional information about your real estate transaction, buying & selling, insurance or helpful hints, contact LEGACY REALTY GROUP, "The new star in town",  1963 Oak Tree Rd. Edison, N.J.

732.744.0400.  CALL US TODAY.