Amortization

Amortization

Amortization is the process by which a mortgage loan is paid off over time through structured, regular payments. This process occurs within a specified time frame and varies based on the terms of your mortgage.

Your monthly mortgage payments are allocated to cover both the principal (the original loan amount) and the interest charged on the loan. The way these funds are distributed changes over the course of the loan. In the early stages of the mortgage, a larger portion of your payment goes toward interest. As time progresses, this distribution shifts, and a greater share of your payment is applied to the principal balance.

The amortization schedule provides a detailed breakdown of your monthly payments, indicating how much goes toward principal and interest. Understanding this breakdown can help you make informed decisions regarding prepayments or refinancing options. For instance, if you foresee a significant amount going toward interest, you may consider opting for a loan with a shorter amortization period. Therefore, reviewing and comprehending your amortization schedule is crucial for effective financial planning concerning your mortgage.

Obama Mortgage

The Home Affordable Refinance Program (HARP) was an initiative from the Obama administration that provided options to help homeowners based on their situations.

First-Time Homebuyer

U.S. Department of Housing and Urban Development (HUD) sets criteria to define first-time homebuyers. Helps lenders identify and allows to track their numbers.

Loan Application

To begin mortgage process, you must fill out and submit a loan application to your lender. This form and documents help assess your eligibility for the mortgage

FHA Handbook

FHA home loans have specific rules that lenders must ensure the loans are insured by the U.S. government. Rules compiled in a reference book called HUD 4000.1

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