Types of Loans
• Conventional – secured by a bank or lender.
• Conventional Conforming – typical home loans of various types which offer the best rates available to those with good credit and acceptable residential property.
• Jumbo – residential loan amounts above the standard conventional conforming ceiling which is adjusted occasionally by the industry.
• FHA – The Federal Housing Administration, or FHA, provides mortgage insurance on loans made by FHA-approved lenders throughout the United States.
• VA – 100% financing for US Veterans for purchase. Refinances also available at high loan to value.
• Mortgage – loan document in which you pledge the title to real estate as the collateral.
• Pre-qualify – lender reviews your financial picture and suggests an amount that you can afford to pay for a house.
• Pre-approved – lender has reviewed and verified all the information in your application. When you are pre-approved, you are in a much stronger position when purchasing a home because the seller knows you are qualified to purchase.
• Good Faith/Truth-in-Lending – lender is expected to send you a Good Faith/Truth-in-Lending statement within three days after you submit your application. This gives a summary of the expected closing costs and should be very close to the final figure. The statement also discloses whether there is a penalty for paying off the balance of the loan before it is due.
• Points - (sometimes called discount points)– one point is equal to one percent of the purchase price. Points are used to buy down the interest rate on a mortgage. Loans differ in interest rates and points charged.
• PITI – Principal, Interest, taxes, and insurance. Each monthly payment is usually made up of these 4 parts. This is a convenient and easy way to pay taxes and insurance on the property as well as the principal and interest repayment.