Common Financing Terms
Pre Qualification: This means that you have been provided an estimate of what a sort of loan you can expect to obtain based on your credit score and what’s currently available. It is a good idea to get a prequalification letter to take with you on your house hunt.
Pre Approval: This means you have been approved for the loan that you have applied for. There is a time limit for the approval in which the terms quoted are guaranteed.
Locked In: This means that you have a certain interest rate if you acquire the loan within a certain amount of time, usually 30 days.
The Loan Deconstructed
Principal: Amount that is owed on the loan excluding interest.
Interest Rate: Percentage amount of loan that you will be paying on the loan.
APR (Annual Percentage Rate): The yearly cost of financing the loan amount.
Term: The length of time over which the loan will be repaid.
Amortization: Schedule of payments over a period of time to pay off the loan amount.
Points: Amount of money that a buyer can choose to pay to the lender in order to get a lower interest rate. A point equals one percent of the loan amount, this is usually paid at closing.
Closing: the point at which the loan is complete and the terms become active. Everything will be signed and completed at closing.
Closing Costs: The amount of money that must be paid at closing to make the loan active.
Talk to the local bank and find out how they set up their loans and what other resources they can offer. A local bank will be familiar with the types of properties and homes that are being lended on and what is out there for the customer.
We are here to help with finding the right home, land, farm, or commercial property that is in your budget. Call State Wide Realty Today at 434-392-6163 or visit our website at www.VaStateWideRealty.com