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As a men's clothing store TV commercial once said, "An educated consumer is our best customer". The same philosophy applies to us.

Adjustable Rate Mortgage
A loan with a periodically changing interest rate. The mortgage rate is pegged to a specific economic indicator such as treasury bills or the prime interest rate, for example. Terms can vary greatly, and often offer very low introductory rates during the early years.

APR
The Annual Percentage Rate (APR) is intended to include all of a lender's closing costs, giving a true yearly interest rate. However, many lenders calculate their APRs in different ways.

Balloon Mortgage
A mortgage which is payable in full after a period that is shorter than the term. In most cases, the balance is refinanced with the current or another lender. On a 7-year balloon loan, for example, the payment is usually calculated over a 30-year period, and the balance at the end of the 7th year must be repaid or refinanced at that time.

Credit Score
A single numerical score from 350 to 850, based on an individual's credit history, that measures that individual's credit worthiness. Credit scores are as good as the algorithm used to derive them. The most widely used credit score is called FICO for Fair Issac Co. which developed it.

Debt-to-Income Ratio (DTI)
Your DTI is the ratio of your total household debt, including your mortgage payment, property taxes and home owner insurance, plus car payments, credit card payments, association dues and other loan payments as a percentage of your household gross monthly income (before taxes). For "A" paper loans, your DTI needs to be less than 40%. For sub-prime loans, this ratio goes up to 50% to 55%.

Fixed Rate Mortgage
A loan in which the rate is set at the time of closing and is constant throughout the mortgage term.

Good Faith Estimate
Lenders are required by law to produce a Good Faith Estimate, which details all the costs you'll be charged to close your loan.

HUD-1 Form
The form a borrower receives at closing that details all the payments and receipts among the parties in a real estate transaction, including borrower, lender, home seller, mortgage broker and various other service providers.

Loan-to-Value (LTV) Ratio
The ratio of your loan amount to the appraised value of your home. (Loan amount/appraised value = Loan-to-value ratio.) Generally expressed as a percentage, a higher LTV can trigger the need for private mortgage insurance or a higher rate.

Negative Amortization
If you pay less each month than the minimum interest payment at the full rate on your mortgage, the unpaid interest is added to your mortgage balance. This is called negative amortization, as your loan balance goes up, instead of down.

Option ARM
An adjustable rate mortgage that gives you 4 payment options each month, including one at a low start rate, perhaps as low as 1%.

Pre-Pay Penalty
Many lenders will impose a penalty of 6 months' interest on the mortgage balance if it is paid off in full or more than a certain percentage within one, two or three years. Before you refinance your mortgage, we will help you determine if you are subject to a pre-pay penalty.

RESPA
The Real Estate Settlement Procedures Act, a Federal consumer protection statute first enacted in 1974. RESPA was designed to protect home purchasers and owners shopping for settlement services by mandating certain disclosures, and prohibiting referral fees and kickbacks.

Settlement Surprise
The situation that occurs when a borrower believes a loan officer who quotes a rate that is much lower than those from everyone else. The underwriter processes the loan application at the true, higher rate, and the borrower finds out about it right at settlement, or hours before.

Sub-Prime Borrower
A borrower with poor credit, who can borrow only from sub-prime lenders who specialize in dealing with borrowers who have poor credit. Such borrowers pay more than prime borrowers, and are sometimes taken advantage of. Not all borrowers who deal with sub-prime lenders, however, are sub-prime borrowers.

Term
The length of time that you have to repay your mortgage loan. Generally expressed in years, the typical term for most mortgages is 15 to 30 years.

Third Party Fees
Charged by vendors, such as appraisers and title companies, these are fees that your lender uses to assess the quality of your loan, to process your loan, and to get you to settlement.

There are plenty of other commonly used mortgage terms, but these are the basics. If you ever come across mortgage terms that you do not understand, please call me so I can help you understand the terminology and to see how it may affect your mortgage.

About My Services

I would like to help you with the task of refinancing your mortgage. To do this, I am able to do the following for you:

• Evaluate your credit and mortgage payment history
• Advise you on the various types of mortgage programs
• Resolve any issues on your credit report that can affect your mortgage.
• Provide you with a complete refinance savings analysis
• Make sure you have all the required loan documents
• Provide you with a Good Faith Estimate of closing costs
• Keep you informed as to changes in mortgage interest rates
• Determine any seller assist that you may ask from a property seller
• Co-ordinate all aspects of settlement or escrow, including title search, appraisal, paperwork and other services

At Your Company Name, we offer mortgages for most buyers, including ones who are self-employed or who have damaged credit. We have lenders who offer 100% financing meaning no down payment for qualified buyers.

We also offer mortgages with start rates as low as 1%, making it easier to pull cash out of your home.

If you have any questions about how I can help you purchase your home, please call me at Company Phone #.