![]() It’s usually taken out for a period of a few weeks to up to three years. Bridge loanĪ bridge loan is a short-term loan a homeowner takes out against their property to finance the purchase of another property. The end result is that you'll pay the equivalent of 13 monthly payments each year lowering interest rates and your principal balance at a faster pace. With a bi-weekly mortgage, you'll make 26 payments per year instead of 12. Bi-weekly mortgageĪ bi-weekly mortgage payment means a homeowner pays their monthly mortgage payment in two monthly installments instead of one. It’s usually associated with investment or construction projects that are issued for the short term and don’t require collateral. Instead of a traditional fixed-rate mortgage in which the owner pays on the loan in installments, a balloon mortgage is paid in one lump sum (e.g., the balloon payment). The buyer takes on the seller’s remaining debt instead of taking out a new mortgage of their own. Assumable mortgageĪssumption is when a seller transfers all terms and conditions of a mortgage to a buyer. AssignmentĪn assignment is when the seller of a property signs over rights and obligations to that property to the buyer before the official closing. An assessor calculates the assessment of a home’s value by looking at comparable homes in your area and reviewing an inspection of the home in question. Assessed valueĪn assessment is used to determine how much in taxes the owner of a property will pay. ![]() To calculate a home’s likely appreciation rate, add one to the annual appreciation rate, raise this to a power equal to the number of years you’d like to estimate, then multiply that by the current value of the property. ![]() AppreciationĪppreciation is the amount a home increases in value over time. If the home’s appraised value is below what the buyer has offered, the lender may request the buyer pay the difference in cost. When buying a home, the lender requires an appraisal by a third party ( the appraiser) to make sure the loan amount requested is accurate. AppraisalĪn appraisal on your home is an unbiased estimate of how much a home is worth. The annual percentage rate (APR) is the amount of interest charged on your loan every year. In real estate, a buyer's amortization schedule is usually one monthly payment scheduled over a 15- or 30-year period of time. AmortizationĪmortization is the schedule of your mortgage payments spread out over time. The adjustment date usually falls on the first day of the month after mortgage funds are advanced or dispersed to the borrower. This is the date your mortgage begins to accrue interest (though you might not have made a mortgage payment yet). You might start with lower monthly payments than you would with a fixed-rate mortgage, but fluctuating interest rates will likely make those monthly payments rise in the future. The interest rate for an adjustable-rate mortgage changes periodically. The rest of the contract stays the same, regardless of the addendum. ![]() If a buyer or seller want to change an existing contract, they might add an addendum outlining the specific part of the contract they’d like to adjust and the parameters of that change. In this situation, the seller is also likely accepting backup offers in case their current offer fails to meet its contingencies. A house is listed as “ active under contract” when the seller has accepted an offer with contingencies, but still wants the house to be listed as active.
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