FinLocker Blog

While nearly all industries have lingo and jargon, not all industries are as likely to impact your life as is the mortgage industry.  Basically, if you want to buy a house, you will likely need a mortgage.  Knowing a bit about the common acronyms and jargon of the mortgage industry could prove helpful during the home buying process.   This list is not in alphabetical order, but rather in the order you are likely to hear to terms. Consumer:   This word refers to you--a person looking to buy a house and needs a mortgage to do so. Mortgage:  A mortgage is a type loan that is secured against real estate, such as a house or a condo.  Most consumers obtain one to help to purchase their home.  The term 'mortgage' is also sometimes used to describe the consumer's financial documents used to determine if the consumer has the ability to repay the loan.  Pre-qualified:   This is a conversation with a loan officer who request...

There are many reasons to refinance your mortgage, some obvious and some a bit obscure.  Some of the situations are complete opposites of one another and will depend on your unique financial goals and/or risk appetite.  Here’s a list of some reasons to refinance.  To get a Lower Interest Rate: If mortgage rates are lower now than when you took out your mortgage, then this one is the no-brainer.  A typical rate-term refinance allows homeowners to reduce their interest rate, so you can enjoy a lower monthly payment.  Beware the potential downside of resetting the clock (term) on your mortgage.  The term of your mortgage refers to the amount of time it takes to repay the mortgage.  You would need to specify that you want to go with your current remaining term. To change the Term of your Mortgage: Or perhaps, you want to change the term of your mortgage.  Most mortgages are done over a 30-year repayment period or term.  Shortening th...

Wait.    What is a HELOC again? It is a H ome E quity L ine o f C redit.   Basically, it is a loan that establishes a line of credit (amount you can borrow) based on the equity in your home.   In the end, it functions very similar to a credit card.   You borrow the amount you choose for the purposes you choose when you choose to, with no impact on your current first mortgage. Many homeowners are looking to take advantage of recent appreciation in the value of their homes.   In the recent past, most homeowners elected to do this with a cash-out refinance.   This was especially true as mortgage rates have remained low.   However, as mortgage rates begin to rise, homeowners are not going to want to give up their ultra-low fixed-rate first mortgage.   Trans-union has projected 1.6 million new home equity consumers in 2018.   Are you one of those people? Here are some common reasons homeowners take equity out of their h...