Q -
WHAT IS A "CAP"?
Top
A - The maximum adjustment of the interest rate
permitted at any interval.
Q -
WHAT IS THE "CEILING FLOOR"?
Top
A - The highest of lowest interest rates that may
be charged during the term of the loan.
Q -
WHAT IS A "CONVENTIONAL LOAN"?
Top
A - A loan which is not insured or guaranteed
by a government agency.
Q -
WHAT ARE "CONVERSION FEATURES"?
Top
A - Generally, these allow changing an
Adjustable Rate Loan to a Fixed Rate Loan.
Q -
WHAT ARE "GOVERNMENT GUARANTEED LOANS"?
A - VA or RECD
Q -
WHAT ARE "GOVERNMENT INSURED LOANS"?
Top
A - FHA or RECD
Q -
WHAT IS AN "INDEX"?
Top
A - The published rate of interest that is the
basis for calculating the new interest rate.
Q -
"INSURANCE OR GUARANTEE"?
Top
A - To provide extra security to the lender
above the borrower's credit worthiness
and property as collateral.
Q -
WHAT IS AN "INTERVAL"?
Top
A - How often the interest rate is adjusted.
Q -
HOW DOES A "LEVEL PAYMENT FULLY
AMORTIZED" LOAN WORK?
Top
A - The principal and interest payment is
constant each month.
Q -
WHAT IS A "MARGIN"?
Top
A - The increment above the index that is
paid, such as prime + 2%.
Q -
WHAT IS A "PAYMENT CAP"?
Top
A - The maximum adjustment that the payment
may be raised at an interval.
Q -
HOW DOES A "STRAIGHT LINE AMORTIZED
LOAN" WORK?
Top
A - The principal part of the payment is constant
each month, the interest portion declines
each month because the balance is declining.
Q -
What is a "Fixed Rate"
Mortgage?
Top
A -
The Interest Rate of the Mortgage remains
the same throughout the term of the loan.
Q -
What is an "FHA" Loan?
Top
A -
A Government backed loan which allows for
more flexibility in qualifying and other aspects of getting approved.
Q -
What is a "VA" Loan?
Top
A - A Government backed loan for veterans that
has special allowances, such as no down payment.
Q -
What is an "ARM"?
Top
A -
An Adjustable Rate Mortgage - the rate for
the loan will change (or adjust) on a regular basis after a set time
period.
Q -
What is a "Balloon" loan?
Top
A -
The rate on a Balloon Mortgage is fixed
for a set number of years, then the balance of the loan amount will be
due.
Q -
What does "Buydown" mean"?
Top
A -
Buydowns reduce the interest rate of a
mortgage either permanently, or for a temporary set time period.
Q -
What is a "Jumbo" loan?
Top
A - Jumbo refers to the size of the loan
amount. Currently, "jumbo" loan amounts exceed $275,000
Q -
What is a "Loan Commitment"?
Top
A -
A written approval for a specified loan
amount and payment, based on your current financial situation.
BancGroup Mortgage Corporation is an Equal Housing Lender and Illinois,
Indiana, Wisconsin, Florida, Michigan, Colorado, and California
Residential Mortgage Licensee