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Basic Mortgage Terms
Posted by nick_niesen on October 29th Marcus Davenport Shirt , 2010


If it is your first time applying for a mortgage, there are a number of terms you should know. Educating yourself on the various mortgage terms you will run into will help you make better decisions when deciding which home you want to purchase. When you sign a mortgage contract, your home is used for collateral and it is your responsibility to make sure your payments are made on time each month.


The first term you should know is principal. The principal is basically defined as the amount of money you borrow for your home. Before the principal is provided you will need to make a down payment. A down payment is the percentage you will put towards the principal. The amount of the down payment will often depend on the cost of the home. Once you pay off the principal, the home is yours.


The next term you will need to know is interest. Interest is a percentage that you are charged to borrow a certain amount of money. Along with the interest rate Sheldon Rankins Shirt , lenders may also charge you points. A point is a portion of the total funds financed. The principal and interest makes up the majority of your monthly payments, and this is a method that is called amortization. Amortization is the method by which your loan is reduced over a given period of time. Your payments for the first few years will cover the interest, while payments made later will be applied towards the principal.


A portion of your mortgage payments can be placed in an escrow account in order to go towards insurance, taxes Alex Anzalone Shirt , or other expenses. The next term you will hear a lot is taxes. Taxes are the amount of money that you have to pay to your state or government. When it comes to your home, these are known as property taxes. These taxes are used to build roads, schools, and other public projects. All homeowners must pay property taxes.


Insurance is another important term that you will hear in the real estate community. You will not be allowed to close on your mortgage if you don't have insurance for your home. Home insurance covers your home against floods Marcus Williams Shirt , fire, theft, or other problems. Unless you can afford to repair your home if it is damaged, it is usually a good idea to get insurance for your home. If your home is located within a zone that is known for having floods Ryan Ramczyk Shirt , federal laws may require you to have flood insurance.


If the down payment you put towards your home is less than 20% of the total value, you will often be charged additional premiums on your insurance by the lender. This is done to protect you in the event that you default on your loans and fail to make payments. Without this, many people would not be able to afford a house. Once you have paid off about 78% of the home, the lender will stop charging you insurance premiums.


These are the basic terms you will need to know before your purchase a home. Understanding these things will allow you to avoid many of the pitfalls that exist in the real estate field. You want an interest rate that is low Marshon Lattimore Shirt , and you should always try to get a fixed interest rate if possible. This will allow you to focus your income on making payments towards the principal, and this will help you pay off the loan faster. A mortgage is an important part of your financial picture, and you want to make sure you pick a home that you can afford. If you fail to make your payments, you may lose your house.


Basketball Legend?s Home Falls into Foreclosure Business Articles | January 20 Cameron Jordan Shirt , 2011
There is another proof that foreclosure affects not just ordinary people but also high-profile celebrities. A retired basketball legend has reportedly admitted having his home in Utah foreclosed. The basketball star defaulted from an underwater mortgage.

Julius Erving, also known as Dr. J in the basketball scene, has disclosed that his $2.23 million house in Utah is under foreclosure. This is another reminder that foreclosure affects not just ordinary citizens, but also high-profile celebrities and sports icons. Mr. Erving joins a list of several US celebrities who have already admitted being among the victims of continuously increasing foreclosure in the country.

Celebrity news organization TMZ claims that Mr. Erving has admitted to the group that his Utah property is ?substantially underwater?. Underwater mortgages are home loans that have become greater than the current valuation of the property that was used as a security for the mortgage. Many homes across the country have become underwater as home prices continue to fall and loan interest rates continue to remain high.

Mr. Erving?s Utah house is a 6 Michael Thomas Shirt ,700-square-foot property situated in St. George. The community is located at the southwest portion of the state. St. George is about 120 miles to the northeast of nearby Las Vegas in the neighboring state of Nevada. Experts have estimated that the property has a current valuation of about $2.23 million.

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