A convertible adjustable rate mortgage (ARM) allows buyers to take advantage of low interest rates by receiving a loan at a “teaser” loan interest rate. Their monthly mortgage payment stays the same, but interest rates fluctuate, usually every six months.
Loan servicing is a term for the administrative aspects of maintaining your loan, from the dispersal of the loan to the time it’s paid in full. Loan servicing includes sending the borrower monthly statements, maintaining payment and balance records, and paying taxes and insurance.
The prime interest rate is typically awarded to a U.S. bank’s best customers. It’s the best-available loan rate and is usually three points above the federal funds rate: the rate banks charge each other for overnight loans.
Both pre-qualification and pre-approval provide borrowers with an estimation of how much home they can afford. However, a mortgage pre-approval is a more official step that requires the lender to verify the borrower’s specific financial information and credit history.
A seller’s disclosure is a document that requires the sellers to reveal details about the property’s current condition and any defects or faults.
Home equity is the part of your property you actually own. While you do “own” your home, your mortgage lender has interest in the property until it’s paid off. To calculate your home’s equity, subtract your outstanding loan balance from the current market value of your property.
The median list price of all active listings currently on the market for sale in San Diego.
A no-cost mortgage is a type of refinancing in which the lender pays the borrower’s loan settlement costs and extends a new loan, usually in exchange for the borrower paying higher interest rates. The mortgage lender then sells the mortgage to a secondary mortgage market for a higher price because of the high interest rate.
A mortgage servicer manages the daily administrative work around a loan, including processing loan payments, responding to borrower inquiries, and tracking principal and interest paid.
A cost of funds index is an average of the regional interest expenses acquired by financial institutions. It’s used to calculate variable rate loans.
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