Loan Terminology
- Fixed Rate
This is a interest rate that never fluctuates. This also makes your payments the same without any change during the term of your loan.
- 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 very dangerous to a borrower with a fixed income since their payment can raise $30, $50, and even $100.00 a month over the life of the loan.
- Amortization
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.
- Annual Percentage Rate (APR)
This is a 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.
- Appraisal
An estimate of the value of property, made by a qualified professional called an "appraiser".
- Nada book out
This is done in house by our trained staff. We will need information and pictures for you to complete this process. It is like a Kelly blue book on a car. There is no fee for this and it can be done in most cases.
- Balloon Payment
A balloon payment is a large sum due at the end of the loan or at a set date by the lender. In Park Lending does not offer loans with balloon payments.
- Assumable Loan
There is no real assumable loan. Many advertise programs like this but your buyer must qualify and have their credit approved then go through the full loan process. Most are confused by these terms. It not as easy as letting someone take over payments and your current loan for you.
- 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 1/4 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.
- Loan Fee
Every lender charges a fee for processing your loan. This is standard in the industry.
Loan Document Q's & A's
- Power of Attorney
This form is needed for DMV and escrow titling. A common question asked is "what other powers does it give to the lender?" None other than to title your home.
- Fixed Rate and APR different
The fixed rate is your interest rate. The apr is the rate with all the fees included.
- Right to Cancel
This form allows you to opt out of this contract. Every refinance by law must include this form.
- Payoff Authorization
This form is required by every lender to payoff your current loan.
- Same Name As
This form is needed in the case you sign your name with or without a middle initial or in the case you have changed your name i.e. marriage, etc.
Please call if you have any other questions 888.892.5632
