Wingate, PA (814) 355-5452 · Julian, PA (814) 353-8180 · PAOAGHIC:005864 · NMLS #200297


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Did You Know?

Modular homes are built entirely indoors, so none of the structure is ever exposed to rain or snow during construction.

Financing: Common Terms You May Encounter

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Adjustable Rate Mortgage (ARM)
On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, typically one, three, or five years, depending on the index. Most ARM loans have a cap of 6% increase over the life of the loan. This can be dangerous to a borrower with a fixed income since their payment can raise$30, $50, and even $100 a month over the life of the loan.
Annual Percentage Rate (APR)
This is an interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account points and other financing costs. By shopping the best APR does not mean you have the best rate. Your quoted fixed rate is the best way to shop for a loan.
Means loan payment by equal periodic payment calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.
Amount Financed
The amount financed is the amount of credit provided to you or on your behalf. It is calculated by determining the principle loan amount or the cash price (subtracting any down payment); adding any other amounts that are financed by the creditor and are not part of the finance charges; and subtracting any prepaid finance charges.
An estimate of the value of property, made by a qualified professional called an “Appraiser”
Balloon Payment
A balloon payment is a large sum due at the end of a loan or at a date set by the lender.
Buy Down Points
Sometimes buying down your rate can save you money each and every month which equals thousands of dollars over the life of your loan. Standard buy down is 1 point for every ¼ point decrease in rate. So a 1% decrease would equal 4 points financed into the loan. Be sure to ask your loan processor if this will save you money.
Certificate of Title
A document provided by a qualified source (such as a title company) that shows the property legally belongs to the current owner. Before the title is transferred at closing, it should be clear and free of all liens or other claims.
In real estate transactions, the final set of procedures in which documents are executed and the transaction finalized.
Closing Costs
Expenses incidental to closing a home loan, such as loan fees, title fees, appraisal fees, closing fees, points etc.
Credit History
History of an individual’s debt payment; lenders use this information to gauge a potential borrowers ability to repay a loan.
Credit report
A record that lists all past and present debts and the timeliness of their repayment; it documents an individual’s credit history.
Credit Bureau Score
A number representing the possibility a borrower may default; it is based upon credit history and is used to determine ability to qualify for a mortgage loan.
Conventional Loan
A private sector loan, one that is not guaranteed or insured by the US government.
Debt Consolidation
A loan that consolidates other outstanding debt into one consolidation loan facility for the purpose of reducing payments or interest expense cost.
Debt-to-Income Ratio
A comparison of gross income to housing and non-housing expenses; with the FHA, the monthly mortgage payment should be no more than 29% of monthly gross income (before taxes) and the mortgage payment combined with non-housing debts should not exceed 41% of income.
A conveyance instrument given to transfer title to real property upon sale.
Information relevant to specific transactions that is required by law.
Actual payment of moneys. One time or multiple loan funding.  
An owner’s financial interest in a property; calculated by subtracting the amount still owed on the mortgage loan(s) from the fair market value of the property. The market value of real property, less the amount of existing liens.
Fee Simple
The maximum possible estate or right of ownership of real property containing forever.
Finance Charge
Fee for the cost of a loan including interest and points.
FHA Federal Housing Administration
Established in 1934 to advance homeownership opportunities for all Americans; assists homebuyers by providing mortgage insurance to lenders to cover losses that may occur when a borrower defaults; this encourages lenders to make loans to borrowers who might not qualify for conventional mortgages.
Fixed Rate
This is the interest rate that never fluctuates. This also makes your payments the same without any change during the term of your loan.
Fixed Rate Mortgage
A mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change.
Flood Insurance
Insurance that protects homeowners against losses from a flood; if a home is located in a flood plain, the lender will require flood insurance before approving a loan.
Good Faith Estimate
An estimate of all closing fees including pre-paid and escrow items as well as lender charges; must be given to the borrower within three days after submission of a loan application.
Homeowner’s Insurance
An insurance policy that combines protection against damage to a dwelling and its contents with protection against claims of negligence or inappropriate action that result in someone’s injury or property damage.
A legal hold or claim of a creditor on the property of another as security for a debt.
Loan Fee
Every lender charges a fee for processing your loan. This is standard in the industry.
Loan-to-Value (LTV)
Ratio A percentage calculated by dividing the amount borrowed by the price or appraised value of the home to be purchased; the higher the LTV, the less cash a borrower is required to pay as down payment.
Since interest rates can change frequently, many lenders offer an interest rate lock-in that guarantees a specific interest rate if the loan is closed within a specific time.
To hypothecate (pledge) as security real property for the payment of debt. The borrower (mortgagor) retains a possession and use of the property, proved he/she continues to pay the debt. Also, the instrument by which real estate is hypothecated (pledged) as security for the repayment of a loan.
The party lending the money and receiving the mortgage. Some states treat the mortgagee as the “legal” owner, entitled to rents from the property. Other states treat the mortgagee as a secured creditor, the mortgagor being the owner. The latter is the more modern and accepted view.
The amount borrowed from a lender; doesn’t include interest or additional fees.
RESPA Real Estate Settlement Procedures Act
; a law protecting consumers from abuses during the residential real estate purchase and loan process by requiring lenders to disclose all settlement costs, practices, and relationships.
Filing Documents affecting real property as a matter of public record, thereby giving notice to future purchasers, creditors, or other interested parties. Recording is controlled by statute and usually requires the witnessing and/or notarizing of an instrument to be recorded. Recording requirement vary from state to state.
Discharge of an obligation by payment of the amount due, such as on a mortgage, deed of trust or contract; or payment of debt, such as satisfaction of a judgment. Also the recorded instrument stating such payment has been made.
Another name for closing.
Title Insurance
Insurance against loss resulting from defects of a title to a specifically described parcel of real property. Defects may run to fee (chain of title) or to encumbrances.
Title Opinion
In counties where attorneys examine abstracts or chains of title, a written opinion, executed by the examining attorney, stating that title is vested as stated in the abstract.
Title Search
A review of all recorded documents affecting a specific piece of property to determine the present condition of title. A title search is usually completed by a title company rather than an attorney.