Home Equity Loans - More Information
Glossary.
Annual Percentage Rate (APR) - the cost of loan expressed
as yearly interest rate. The APR includes the interest rate and
all fees paid to obtain the loan such as points and closing costs.
Balloon Payment - a large, one-time payment that is due
when a home equity loan expires to clear an outstanding balance.
Cash-out Refinancing - refinancing in which the amount borrowed
exceeds the amount owed on the original first mortgage. The difference
between the two is a home equity loan.
Closed-End Loan - see Home Equity Loan.
Closing Costs - costs paid by the borrower to finalize a
loan. Closing costs includes costs for attorney fees, appraisal
fees, credit report fees and mortgage preparation fees.
Equity - see Home Equity.
Fees - costs associated with closing a home equity loan.
Fees consist of points and closing costs.
Home Equity - the difference between a home's value and
the mortgage.
Home Equity Line of Credit - a type of home equity loan
which offers revolving credit. Borrower pays interest on the amount
borrowed. Usually features a variable interest rate.
Home Equity Loan - a loan that is guaranteed by your home.
There are two types of home equity loans: the standard home equity
loan and a home equity line of credit. In a standard home equity
loan, a specified amount of money is loaned in a lump sum for a
specified period of time. A standard home equity loan is also called
a term loan, a closed-end loan or a second mortgage installment
loan.
Loan-to-Value Ratio (LTV) - the ratio of the loan or borrowed
amount to the value of the home. LTV is expressed as a percent.
Points - a one time fee paid to the lender to close a home
equity loan. One point is one percent of the loan amount.
Second Mortgage Installment Loan - see Home Equity Loan.
Term Loan - see Home Equity Loan.
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