Common Customer FAQ’s

 

What is a mortgage?

A Mortgage (also called a home loan) is a legal contract made between a lender and a borrower that uses property as collateral to secure the loan. The lender can take possession of the property if the borrower fails to pay the prearranged home loan payments.


What is a mortgage refinance?

A homeowner acquires a new loan to pay off an existing loan. Reasons homeowners refinance is to lower their interest rates and/or access cash from their home equity.


What is a home loan?

It is a loan by a lender to the homeowner secured by a “lien” on the real estate.


What is a home equity loan?

It is a closed-end home loan secured by the borrower’s residential asset. The reasoning to usually get a home equity mortgage loan would be to pay off debt or to make home improvements.


What is a home equity line of credit or HELOC?

A HELOC is simply an open-end loan set up as a line of revolving credit for some maximum draw, instead of a fixed loan amount in which your home is collateral. This is an open-end loan that permits the borrower to repay and re-borrow the funds available. HELOCs can be used to pay for several important items such as college education tuition, private school education, high interest debt, home improvements, home renovation, and major medical bills.


What is a second mortgage?

Mortgage loan taken out after the first mortgage and secured against the same asset as the first mortgage loan. Mortgage loan is based on the amount of equity or ownership interest you have in your home.


What is a reverse mortgage?

This loan program is for the benefit of seniors giving them the ability to supplement their income. It is a contract between the lender and the homeowner in which the lender makes regular payments to a homeowner for a specific period of time. The monthly payment received by the homeowner is based on the amount of equity the homeowner has in the home. The monthly payment is a non-recourse loan hence; the payment is tax free to the homeowner. The homeowner is allowed to reside in the home until they relocate or till death of homeowner. At that period, the lender sells the home and recovers his loan.


What is a mortgage lender?

A mortgage Lender is a financial institution that provides prospective homeowners with the funds over a long-term period to pay off their home loan mortgage. Borrowers are required to pay monthly installments to their lender which includes principle, interest, and additional lender fees.


What is the difference between a mortgage broker and a mortgage banker?

A mortgage broker is the middleman who helps match borrowers with lenders based on corresponding needs and standards. Mortgage brokers arrange more than 80% of all transactions between borrowers and lenders, yet mortgage bankers actually finance and distribute the largest portion of home loans compared to all other lenders.


What is a mortgage principle?

The mortgage principle is the amount of loan money that a homeowner borrows excluding interest.

What does APR mean?

Annual Percentage Rate ( APR ) is the percentage used to figure out the total cost of your cash advance loan by taking into account all fees charged by your lender in addition to your loan principle and interest.


What is a fixed rate mortgage?

A fixed rate mortgage is a home loan with steady mortgage interest rates and monthly payments that do not change throughout the life of the loan.


What is the adjustable rate mortgage?

An adjustable rate mortgage is a mortgage loan whose interest rate is episodically adjusted based on an index. The monthly payments made by you may change during the term of your mortgage loan with the changing interest rate. The fluctuating rates pass on part of the interest rate risk from the mortgage lender to you.


What is an interest-only mortgage?

Interest-only mortgages are loans that require the borrower to pay only interest on the principle in monthly installments for a fixed period. You can use one of our mortgage calculators to calculate exact payments.


What is an amortized mortgage?

Amortized Mortgages refers to loans that are paid in installments comprised of both principle and interest, and which is paid off (or amortized) over a fixed period of time.


How do you calculate LTV or loan-to-value ratio?

The loan-to-value (LTV) ratio of your home is calculated by dividing the fair market value of your home by the amount of your home loan.


What is the Truth in Lending Act?

The Truth in Lending Act is a federal law that was enacted as part of the Consumer Protection Act. This law requires lenders to reveal all information to the borrower and detail all costs associated with the transaction.

 

 

FAQs Real Estate


Who is a Listing Agent?

A listing agent works on behalf of the seller to market the property so as to attract potential buyers. Also, the listing agent is referred to as a seller’s agent.


Who is a Selling Agent?

A selling agent has an agreement with buyer to work for their best interest in a real estate transaction. Also, the selling agent is referred to as a buyer’s agent.


Who is a Dual Agent?

A dual agent represents the buyer and seller in the same transaction. The dual real estate agent must disclose to both parties the agent’s duel agency status before the process begins. The buyer and seller must agree in writing to the duel agency agreement before any business is transacted. Also, the agent cannot disclose either party’s personal information with the other.


Who is a Full-Service Real Estate Agent?

Full-service agents provide comprehensive services that are most apt for sellers. These real estate agents typically have higher commission rates than discount real estate agents and seldom, charge any additional fees. The comprehensive services include detailed marketing activities such as promotion, direct mail, advertising, and listing the home on the Multiple Listing Service (MLS). Sometimes full-service agents utilize customized marketing plans designed to attain maximum exposure for the property. Also, referred to as full-service brokers.


Who is a Discount Real Estate Agent?

Discount agents offer lower commission than full-serve agents. The lower commission doesn’t necessarily connote a compromise in customer service. It does connote less depth and breadth in marketing of the property compared to a comprehensive marketing model of full-serve agents. The marketing effort is mainly directed toward attracting prospects to a magazine, main web site, or other marketing areas where multiple home listings by that agent are featured. Also, commonly referred to as discount brokers.


Who is a Fee-For-Service Real Estate Agent?

Fee-for-service real estate agent services are not precisely in the same category as a discount broker. Fee-for-services offer consumers a menu of services to choose from; herein, they pay for only the services procured.


What is the Multiple Listing Service?

It is a comprehensive database of all the available homes for sale, except those being sold by the owner.


What is a Listing Agreement?

It is a legal agreement between the listing agent and the seller. The terms of the agreement include list price, description of property, conditions for the sale, length of the agreement, compensation of agent, and services rendered.


What is an Open Listing Agreement?

An open listing agreement is a non-exclusive agreement that permits the owner to sell the home by themselves. The owner can have listings with various real estate agents and pay only the agent who aligns him with a buyer whose offer the owner accepts.

However, an owner can have an open listing indicated typically by a “For Sale by Owner” sign. An open listing doesn’t require an agreement. The open listing maintains the owner’s right to sell the home themselves and not pay commissions to anyone.


What is an Exclusive Agency Listing Agreement?

A listing agreement in which the owner contracts with a real estate professional as the one exclusive agent for a certain period of time to sell the property. The terms of the agreement include the compensation arrangements and any owner terms. Still, the owner has the right to sell the property without compensation to a prospect not introduced or claimed by the real estate agent.


What is an Exclusive Right-to-Sell Listing Agreement?

A listing agreement between the owner and the real estate agent which compensates the agent even if the property is sold by someone else, including the owner during the term of the agreement.


What is a Safety Clause?

The exclusive right-to-sell listing agreement includes a clause that entitles the real estate agent to compensation even after the listing is canceled or has expired. The clause is activated only in the incident a buyer who was introduced to the home by the listing agent purchases the home after the listing has been canceled or expired.

It is also known as the protection clause because it “protects” the agent from collusion between the buyer and seller.


What is a Residential Purchase Agreement?

Also known as Contract to Purchase Real Estate, it is a binding agreement (among two or more parties) to purchase real estate. It binds the buyer to buy at a set price and the seller to sell to the buyer, all of which is to be transacted within a specified time.