Amortization

Loan payments by equal periodic amounts calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.

APR

A percentage rate that reflects the amount of interest earned or charged.

Balloon Payment

An installment payment on a promissory note - usually the final one for discharging the debt - which is significantly larger than the other installment payments provided under the terms of the promissory note.

Down Payment

The difference between the purchase price of real estate and the loan amount. The borrower is responsible for providing the funds for the downpayment.

Equity

The difference between the fair market value of a property and the current indebtedness secured on the property.

Escrow

A situation in which a third party, acting as the agent for the buyer and the seller, carries out the instructions of both and assumes the responsibilities of handling all the paperwork and disbursement of funds at settlement or at closing.

Interest

Consideration in the form of money paid for the use of money, usually expressed as an annual percentage. Also, a right, share or title in property.

Loan-to-Value (LTV) Ratio

The ratio of the principal balance of a mortgage loan to the value of the securing property, as determined by the purchase price or Appraised Value, whichever is less.

Do I need a home equity loan
or a home equity line of credit?

Both products use your home as collateral.

The main differences between the products are:

• The line of credit is accessible for a long–term draw period, usually by check or online banking. Once you pay down your balance, you then have more money available to spend again if necessary. A home equity loan disburses all funds at once when the loan term starts and you cannot access any further funds without refinancing.
• A line of credit has a variable interest rate. A home equity loan has a fixed rate.
• A home equity loan has payments that don't change. A home equity line of credit has a payment that can change every month, either because the balance changes (increases if you spend more; decreases if you pay down what you owe) or because the interest rate changes because of the Prime rate changing.

Do I need a fixed rate or
an adjustable rate?

Fixed-rate loans have interest rates that don't change during the life of the loan. Adjustable-rate loans have rates that are linked to an index, Prime, and therefore can change over time.

Consider factors that could affect your decision, such as how a higher monthly payment would impact your budget if the rate were to increase and the length of time you plan to stay in your home.

Why should I refinance?

There a numerous reasons customers refinance the loans they already have. Some of these are:

• To lower the monthly payment
• To lower the interest rate
• To switch from an adjustable rate to a fixed rate or vice-versa
• To refinance for a higher amount in order to pay off other debts or get cash
• To change the remaining term of the loan

Can I get preapproved?

Yes, you can. Your information is reviewed, and a decision is made as to whether you qualify. Contact us to see what information you need to provide. Once pre-approved, you can look for a new home with confidence, and sellers will feel more comfortable dealing with you.