UT Mortgage Glossary – Are You Familiar with the Terms?

Do you wish to apply for a UT mortgage? Are you familiar with the mortgage glossary? Do you know what you will be dealing with? Even if you hire a professional to do the job for you, you need to be able to evaluate and assess a potential danger or prospective benefits. Unless you are familiar with the basic terminology, you will have a hard time to figuring out if a UT mortgage is beneficial or not.

Mortgage: the loan you ask so as to buy a property or a house. The amount of loan depends on the price of the house you want to buy and the amount of money you can pay up front. A UT mortgage could range from $50,000 to more than $400,000. Some lenders may allow smaller or larger loan amounts. A UT mortgage is a secure loan, meaning that you need to place collateral.

Collateral: an asset used so as to secure the loan. In the case of a UT mortgage, the collateral is the house itself.

Interest: Interest is the additional amount of money that lenders charge as a fee for using their money to buy or refinance a house. Interest rates can be different among lenders. Interest is generally stated in percentages and added to monthly installments.

Loan term: the amount of time you will need to pay off the debt; it is agreed between you and the lender when obtaining the UT mortgage.

Debt amortization: amortization is a process based on which lenders calculate mortgage payments. The amount applied to principal is usually lower early in the loan and higher towards the end.

Fixed Rates: the interest rates that remain constant throughout the loan term.

Adjustable Rates: the rates that may adjust during the life of a loan based on a pre-specified index. The rates can rise or fall.

Equity: equity is a term referring to the difference between the value of a home and the amount remaining on the mortgage. The equity grows as the amount in debt lessens.

Foreclosure: the legal procedure during which the lender takes away the property from the borrower, who defaulted on paying the debt on time. The property is sold to try to cover the amount owed.

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