The word mortgage can mean many things to many people. For the new couple buying their first home it can be exciting, for those struggling to pay it, it can be downright scary. The best way to plan for your future is to be informed before you make that commitment. Like anything dealing with finances, missing just one aspect of the agreement can be just enough to have a serious impact on your ability to adhere to the terms. Understanding what all of these words associated with a mortgage mean will save you time, money, and potentially disastrous results if you are incorrect or misinformed.

Private Mortgage Insurance: When you obtain a mortgage, the lender might require you to provide at least 20 percent of the price of the home as a down payment. If you are not able to pay the 20 percent down, the lender will likely have you buy private mortgage insurance or PMI. PMI protects the lender in the event that you are to default or foreclose on your loan. PMI can be cancelled once you have paid down your mortgage to a certain percentage and you have established equity in your home.

Interest Rate: The interest rate is the percentage at which your lender will loan you the money to purchase your home. When a lender determines if they will take a risk and lend you money, they keep their interest rate as their fee to lend you the funds. This arrangement allows the bank to get much more money than they ever would if you paid back the loan without an interest rate.

Lender: The lender is the bank or other loan agency which is giving you the funds to purchase your home. When you take out a mortgage you will actually need to contact this lender to set up all of the loan details and to complete the mortgage process.

Points: This is a fee that your lender will charge for lending you the money to take out a loan. This is separate from the interest rate, and is generally paid up front, during the closing of the loan. Lenders will generally give the borrower options, such as paying more points to receive a lower interest rate, or paying no points to receive a higher interest rate.

Closing Costs: These are all of the costs that are associated when your mortgage loan becomes official. The lender’s fees will be included in the closings costs. Your realtor’s fees and the fee for the title insurance as well as the inspection and appraisal will also all be included in these fees. Your attorney costs will also be wrapped up into these costs. Generally, these costs are paid out of pocket by the borrower, but sometimes they can be split between the seller and the borrower, or they can be financed into the mortgage by the borrower.
Shelly is a writer for TotallyMoney.com, a site that compares and ranks the many options for interest only mortgage loans and the benefits and downfalls of unsecured loan deals.

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If it is any consolation to those experiencing tough economic times, you are not alone. The crisis economy has hit hard and taken casualties. Many seemingly sound business investments have been turned on their head, and a whole generation of home owners, car owners, and working people have been stopped in their tracks. Many people who are having a hard time climbing back out of the hole eventually consider Chapter 13 or Chapter 7 bankruptcy. Thankfully, this option exists for those who really need it. In order to determine if you might be a good candidate for Sacramento Bankruptcy, it is important to talk to a lawyer and learn about your options.

Like any financial arrangement, there are benefits and risks. A Sacramento Bankruptcy Lawyer can answer your questions with authority. By declaring bankruptcy, you enter an agreement with all financial institutions whereby you renounce outstanding debt on account of inability to pay. You are hereby released of your obligations, but you are also stripped of your credit for a set period of time. In other words, you eliminate the immediate problem while incurring a different ongoing problem. Depending on your situation and needs, a Sacramento Bankruptcy Lawyer can help you to minimize ill effects as you take this difficult step.

Obviously there is always a cost when working with a lawyer. While an extra expense is the last thing a person facing economic troubles is looking for, it is important to take the long view. The money you spend on a lawyer will be compensated by the beneficial effects of his or her council. Helpful advice coming from experience and expertise in economic law are tools that can help a person to reverse negative trends and plan effectively for the future. If you are facing Sacramento Bankruptcy, some good legal advice is highly advisable.

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