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Copyright © 2006 by Bob Schwartz San Diego real estate broker Certified Residential Specialist
Promotions Unlimited All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement. | | Top Ten Loan Terms in San DiegoBy Bob Schwartz, CRS, GRI, San Diego real estate broker
Everyone in San Diego knows that you should never sign on the dotted line without first reading the contract. The same goes for loans. Signing a loan without knowing the content and what everything means can be damaging to your finances, credit, and future investments. Before you sign anything, make sure that you know the following terms and how they will apply to you.
1. Interest rate. The percentage of your loan that is added to the total that you owe every month is called your interest rate. The percentage will fluctuate according to the economy and will affect your payments.
2. Fixed Rate. A fixed rate will be an interest rate that stays at the same percentage throughout the total period of your loan.
3. Variable Rate. A variable rate will adjust following the economy and the charts that are stating what the rate amount should be. This type of rate usually moves annually and adjusts according to a particular given range of percentages.
4. Principal. The principal is what you will view as your investment as it is what you pay on your actual property.
5. Escrow. This is similar to a savings account for your loan. Whatever you put in escrow will amass without paying directly into the loan. At the finish of the term you can use it to finish paying off the loan or to invest in another loan.
6. Title. A title will be your claim to your home after it is legitimately yours. It concedes that the property belongs to you.
7. Deed. A deed is most frequently used as a title for a commercial area. As opposed to declaring ownership it shows that the property is leased to the one who is using it as a business.
8. Home Equity. This is a loan or line of credit that you can get for your home. It will finance up to eight percent of your other loan and be reimbursed back later. This helps you if you want to consolidate loans or invest more into the property.
9. Appraisal. After an inspection of the home is made, an appraisal will be made. This will be an approximated value of what the home is worth.
10. Equity. This is the actual amount of the property that you own. Usually, this is what is being paid off of your principal amount.
After you've mastered these basic terms, you will be able to expand on your knowledge and find the right loan to meet your needs. These simple terms will help you in making the right decision for the type of loan that you want.
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