Glossary of Common Terms Used During the Mortgage Process

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To be able to understand all the terms that are being used during the mortgage process with a mortgage broker in Melbourne, you need to know what the terms mean. This will just make the whole process easier and less stressful. It can be hard to struggle to know what they mean with all these terms that most people don’t normally use. Here are some of the common terms that are used during the mortgage process that you need to know the meaning of.

Adjustable-Rate 

With the adjustable rate mortgage, you will repay your monthly premium of your home loan with the latest interest rate. And, if the rate is decreasing or increasing, so will your monthly premium. This might be scary to most potential home owners, but there are many benefits that most people don’t know about.

Ask your mortgage broker for more information about the adjustable rate mortgage, before you make any final decision.

Annual Percentage Rate

This is the interest rate that you are going to repay to the mortgage broker. Every home loan will have an annual percentage rate that you are going to repay. The percentage rate isn’t the same and can be different from broker to broker. It doesn’t matter if you’re choosing the fixed interest rate or the adjustable interest rate. On the contract will stand the annual percentage rate.

You can get some quotes from as many mortgage brokers in Melbourne as possible, to see if you can get a home loan with the least amount of annual percentage rate.

Closing Costs

One of the terms that are being used, that many people don’t understand is the closing costs. This is the costs that you are going to pay during the mortgage process. These costs normally include the attorney fees, recording fees and other costs associated with the mortgage closing.

These costs are also different from one mortgage broker in Melbourne to the next. If you don’t want to pay too much closing costs, then you should make sure that you know the closing costs of the differentmortgage companies, before you sign any contracts.

Construction Mortgage

The construction mortgage is almost the same as a normal home loan. But, these types of loans are for those people that are going to build their own homes. So, you are not going to get a home loan from a mortgage broker, but you are going to apply for a construction mortgage loan.

It can be quite frustrating to try to buy a home, and you don’t understand all the terms that they are using at the mortgage companies. If you don’t know all the terms and you don’t get the assistance from the right people, it might result in you choosing the wrong company or the wrong type of mortgage loan. The better you understand all the terms, the easier the whole process will be, and the better the chance that the mortgage broker won’t try to let you sign something that is not in your best interest.