A Glossary of Terms for VA Loans

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A Glossary of Terms for VA Loans
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Appraisal Appraisals are professional
evaluations of the fair market value of the
property being purchased.
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ARM Adjustable Rate Mortgage ARMs are
mortgages that have an initial low rate of the
interest that is fixed for the first 2 or 3 years
of the loan, which can then fluctuate with
current market rates after that period.
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Assumable Mortgage An assumable mortgage can be
taken over by a new buyer instead of acquiring a
new mortgage.
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The seller will still be liable for payment of
the mortgage if the new buyer defaults.
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Balloon Payment With a balloon mortgage, the
buyer makes payments for a specific amount of
time, generally five to ten years, after which
the mortgage must be paid in full.
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This type of loan is generally used by people who
do not intend to stay in the house for a long
period of time or those who intend to re-finance
the mortgage before the payoff amount comes due.
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Certificate of Eligibility A Certificate of
Eligibility is a document that proves your past
or current military service. It is required for a
home loan through the VA Guaranteed Loan Program,
which offers home loans for veterans.
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Employment Verification Employment verification
proves your place of employment and the amount of
salary you receive that will enable you to make
mortgage payments each month.
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Escrow Escrow is an account that holds money
for the distribution of various costs, such as a
lenders escrow account that holds payments for
taxes and interest.
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An escrow account can also be used to hold
earnest money during the home purchasing process.
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IRRRL Interest Rate Reduction Refinancing Loan
The IRRL is a streamlined process for
refinancing mortgages through the VA Guarantee
Loan Program.
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Mortgage Insurance Mortgage insurance provides
money to the lender in case you default on your
home mortgage.
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It is generally required if you put less than 20
percent down payment on your home.
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PITI Principal, Interest, Taxes and Insurance
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The PITI is the total amount of your monthly
mortgage payment that includes the principal on
the loan, the monthly interest, a portion of your
real estate taxes for the year and a monthly
portion of your home insurance payment for the
year.
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Points A point is 1 percent of the mortgage
loan amount that is often paid up front to
negotiate a lower interest rate on the loan.
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Paying the amount up front can often save
thousands of dollars over the term of the
mortgage.
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Prepayment Penalty This is a fee paid to the
lender if you pay off the mortgage before the
term of the loan has ended.
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Many lenders will offer no prepayment penalty
loans. The VA home loan program requires no
prepayment penalty loans.
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Pre-qualification Pre-qualification allows
homebuyers to provide their credit and employment
information to secure a loan in advance of
finding a home to purchase.
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Settlement Settlement is a term often used to
mean the closing of the loan.
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Title Insurance Title insurance is a type of
insurance that provides protection for the owner
and the lender against disputes concerning
ownership of the property.
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Variable Interest Rate Variable interest rates
change with changes in the financial market.
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VA Eligibility - The VA loan program requires
applicants to provide proof of their military
service.
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This information is requested on a VA form
26-1880, which is then submitted to Veterans
Affair Administration and is subsequently
provided to the lender.
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Walk-through The walk-through is the final
inspection of the home by the buyer to ensure
that it is in the proper condition under which
they agreed to purchase the property.
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Our VA Loan Specialist helps veterans obtain the
loans they are entitled to.
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He served in the United States Marine Corps, and
now devotes himself to the Veteran home buyer in
the Phoenix area, fulfilling a passion of his
while at the same time helping others achieve
home ownership.
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Be a proud homeowner today.
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For more details call 480-351-5904 or visit the
site www.valoansforvets.com
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VA Loans for Vets 7702 E. Doubletree Ranch Road,
Suite 220 Scottsdale, AZ 85258 Phone (480)
351-5904 Email jimmyv_at_fcbmtg.com