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A mortgage loan with an interest rate that can change based on market fluctuations throughout the lifetime of the loan.
Assumable mortgage
Assumption is when a seller transfers all terms and conditions of a mortgage to a buyer. The buyer takes on the seller’s remaining debt instead of taking out a new mortgage of their own.
Fixed-rate mortgage
A home loan with an interest rate that stays the same throughout the loan‘s lifetime.
Mortgage
A long-term loan agreement that pays off the cost of the purchased property in monthly installments.
Mortgage broker
A middle-man who shops around for a mortgage on behalf of a borrower, looking for the best possible deal.
Mortgage insurance
An insurance policy that kicks in if the borrower is unable to make their payments. Often a lender will require this if the down payment is too small.
Private mortgage insurance (PMI)
The difference between mortgage insurance and private mortgage insurance is that a PMI is specifically intended to protect the lender and will not cover the borrower if they cannot make payments.
Reverse mortgage
Real estate is often a retirement plan as much as anything else, and this is one way to cash out. A reverse mortgage is an option for seniors (62 years or older) to relinquish home equity in exchange for money.
