Are you ready to apply for a UT mortgage? Are you aware of the different terms related to a home loan? Are you confident that you can negotiate the terms of agreement with your potential lender? If not, it’s a good idea to read and learn what some of the commonly used terms regarding a UT mortgage.
Mortgage: the loan you ask so as to buy a property or a house. The amount of loan depends on the price of the house you want to buy and the amount of money you can pay up front. A UT mortgage could range from $50,000 to more than $400,000. Some lenders may allow smaller or larger loan amounts. A UT mortgage is a secure loan, meaning that you need to place collateral.
Collateral: the items or assets that you place as a security for the repayment of the original mortgage. In the case of a UT mortgage, the house or property are placed as collaterals.
Interest: Interest is the additional amount of money that lenders charge as a fee for using their money to buy or refinance a house. Interest rates can be different among lenders. Interest is generally stated in percentages and added to monthly installments.
Loan term: the amount of time needed so as to pay off the mortgage.
Debt amortization: Debt or mortgage amortization is the process during which the debt burden is gradually reduced and finally removed. The payments are made through the agreed monthly installments, which include the principal and the interest. The amount of interest added lessens gradually, so that the borrower pays off more collateral at the end than at the beginning.
Fixed rate: an interest rate that doesn’t change throughout the loan’s term.
Adjustable rate: a rate that adjusts to the changes of indicators or terms applied by the bank.
Equity: the difference between the value of a house and the balance of the loan. The equity grows as the amount of money owed to the bank becomes less.
Foreclosure: the legal procedure during which the lender takes away the property from the borrower, who defaulted on paying the debt on time. The property is sold to try to cover the amount owed.
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