Mortgage Terms Used by Dreyer Group Mortgages
We have put together some basic information on mortgage terminology, mortgage costs and some tips on how to make an informed decision on your mortgage needs. There are 20 entries in this glossary.
|Interest Adjustment Date||
This may apply to mortgages that close on any day other than the requested day of payment. For instances: since some lenders want monthly payments to be made on the first day of the month, they will adjust the interest due on closing so that interest on your mortgage is paid up until the first of the coming month. If you close on the 20th of the month (and the month has 30 days), you will have to pay interest for 10 days so that you are paid up until the first of the coming month. Then your first full mortgage payment will be due on the first of the following month.
The rate of interest is a key consideration when arranging your mortgage. The interest is the payment to the lender for the use of the mortgage money.
The interest rate can be fixed (where the rate remains constant for the term) or floating (where the rate changes at regular intervals). Short term or convertible terms usually have lower interest rates and can be used to a borrower's advantage in an unstable market. These mortgages allow you to ride out a fluctuating or falling rate market until rates reach a level where you wish to "lock-in" to a longer term. On the other hand, long term rates offer stability and eliminate the need to monitor rates daily.
When the purchase of your new home closes in 60 days but the firm sale of your current home closes in 90 days, you will need interim or bridge financing. This is because for 30 days, you will own both properties, and of course, not receive the equity out of your old property. If the lender you choose cannot provide you with interim financing, you may find getting it from alternate lenders will be very expensive.