Basic Financing Terminology

Mortgage and Lending with Nationwide Funding Group

Customers when you sign your closing loan documents whether you are refinancing, closing on a new home purchase or getting a second , hard money or private mortgage it is importnat that you understand the terminology used. Sometimes us mortgage professionals tend to speak a certain lingo that as customers you dont comprehend. Loan documents cant be quite wordy and sometime the attorney or notary doesnt explain them well enough. Here are some basic terms that will be of help:

Decimal point = the period that sets apart a whole number from a fractinal part of that number

Dividend = A number to be divided by another number

Interest = THe charge for the use of money

Principal = The amount of money borrowed

Proration = The process of makinga fair distribution of expenses, through escrow, at the close of the sale

Rate = THe percentage of interest charged on the principal

Time = THe duration of a loan

Annual = Once Per year

Semiannual = Twice a year at 6 month intervals

Biannual = Twice per year

Monthly = Every month

Bimonthly = Every 2 months

Semimonthly = Twice a month

1 year = For escrow and proration purposes , 360 days, 12, months, 52 weeks

1 month = For escrow purposes 30 days


Comments (4)

Nima Rezvan CT Lender CT Senior Mortgage Broker
Nima Rezvan Prosper First Funding Corporation NMLS#110681 - Fairfield, CT
First Time Home Buyer Expert - CT FHA Loans - FHA


Thanks for the refresher course!  Hows business?  Im struggling! I need loans, referrals!  HELP!

Oct 19, 2006 04:25 PM
Eddy Martinez
Nationwide Funding Group - Highland Park, CA
Nima hey bro things are always busy here in the west coast man. ARMs are resetting , its a buyer market people are buying houses , and the holidays are coming up so people need cash. Come on nima things cant be slow you are countrywides mortgage man!!!!!!! 
Oct 19, 2006 04:34 PM
Scott Gormley
Oak Valley Mortgage-California Home Loans and Refinancing - Chico, CA

haha...You tell him Eddy...Have fun over there while me and Eddy are chillin like villans Nima :)


Oct 19, 2006 06:55 PM
Eddy Martinez
Nationwide Funding Group - Highland Park, CA
Thats right scott dont you just love cali ha ha, congrats on getting the spot you are the man!!!!!!
Oct 20, 2006 06:29 AM