There are many words that we use to describe everything from how a loan matures to various documents and programs that may be unfamiliar to you. Over the next few weeks, I will explain some of the terms that we used most often in mortgage lending to help you gain a better understanding of some of the terminology you may hear when acquiring a mortgage.

A mortization – The repayment of principal from scheduled mortgage payments exceeding the interest due. By subtracting the interest from the scheduled payment you will obtain the amortization.

B alance – The amount of the original loan that is still remaining to be paid. By subtracting the sum of all prior payments from the loan amount, you will obtain the balance.

C ash-In Refinance – Paying down the loan balance to reduce loan-to-value ratio in a refinance transaction. This is often done to help the borrower qualify for a lower interest rate or reduced mortgage premium.

D ebt Consolidation – The process of using a new, more favorable loan to pay off several unsecured debts.

E quity – The difference between the value of the home and the balance of outstanding mortgage loans on the home.

F annie Mae &  F reddie Mac – Two government agencies that purchase mortgages from lenders and resell them to investors.

G race Period – The period of time where a loan payment may be made after its due date without incurring a late penalty.

As your Mortgage Planner, I am happy to answer questions that you may have and provide you with more insight on loan programs that may be of interest to you. Call me today to set up a time when we can meet to discuss your home mortgage needs!