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
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