Whenever you approach a new topic of study – like mortgages and mortgage law – the most important thing to get down first is the "lingo." There are countless vocabulary words related to the mortgage industry, many of which you might not know the definitions. So let's do a brief vocabulary review of a few terms that your mortgage broker and real estate attorney probably know:
In the vast majority of mortgages, you'll pay one loan payment each month. However, with a bi-weekly mortgage, you'll make two payments each month – every two weeks.
The amortization refers to the schedule by which a borrower will pay back his or her loan. For example, if it's a 15-year loan, the amortization schedule will confirm this timetable as well as any other important details about the borrowed amount, the interest rates and other important information.
Good faith estimate
A good faith estimate is the estimated amount to be paid for closing costs. The lender will usually provide such an estimate to the borrower.
Truth in lending
One would hope that there is always truth in lending, but that's not exactly what borrowers always receive, which is why the federal government created the laws that require lenders to disclose their rates and to be truthful when advertising for mortgage loans.
This was just a short review of several vocabulary words you might not have heard of from the mortgage and loan industry. If you're considering a mortgage to buy real estate property, you might also want to consider an experienced attorney who can help you navigate the uncharted legal waters of a real estate deal.