Home Ownership

The term points refers to a one-time fee that lenders charge at the mortgage closing. Usually, the more points you pay, the lower the interest rate will be.
Generally, taxpayers who plan to own the same house for an extended period of time should consider paying more points up front to save thousands of dollars in interest payments over the term of the loan.
A point equals one percent of the mortgage loan. (1 point on a $100,000 loan is $1,000). Lending institutions charge points as a way to make a profit.
Borrowers may pay discount points to reduce the loan interest rate. Buyers are prohibited from paying points on HUD or VA guaranteed loans. On a conventional mortgage, points may be paid by either buyer or seller or split between them. Generally, points are usually tax deductible as mortgage interest on IRS Schedule A.

A Lease Purchase Option Mortgage is a financing option that allows a potential home buyer to lease a property with the option to buy in the future.
It is often constructed so the monthly rent payment covers the owner's first mortgage payment plus an additional amount as a savings deposit to accumulate cash for a down payment.
A seller may agree to a lease purchase option if the housing market is slow and stagnent and the seller is having difficulty selling the residence.

Ginnie Mae is the government-owned corporation within the U.S. Department of Housing and Urban Development (HUD). It was created by Congress in 1968 and has responsibility for the special assistance loan program known as Ginnie Mae. GMNA refers to The Government National Mortgage Association.

Freddie Mac is the nickname for The Federal Home Loan Mortgage Corp. It is a financial corporation chartered by the federal government to buy pools of mortgages from lenders and to sell securities backed by these mortgages.

Fannie Mae is the nickname for the Federal National Mortgage Association. It is a government-chartered, non-bank financial services company and is the nation's largest source of financing for home mortgages. It was started to make sure mortgage money is available in all areas of the country.

Your house equity is the value of your homeowner's unencumbered interest in the house. Equity is the difference between the home's fair market value (FMV)and the unpaid balance of the mortgage and any outstanding liens. Equity increases as the mortgage is paid down over the years or as the property appreciates.

A mortgage "roll-in" loan option is a refinanced loan that rolls any of the closing costs or additional fees into the mortgage loan. Generally, this option best serves people who have a reasonable amount of equity and want to reduce their overall interest expense and plan to stay in their homes for the balance of their mortgage term.

A mortgage loan backed by the Veteran's Administration requires very low or no down payments and has less requirements for qualification. Generally, the interest rates are lower than what is being offered in the marketplace. Members of the U.S. Armed Forces are eligible for the loans under certain qualifying conditions. Contact the local Veteran's Administration office for more information.

The mortgage loan to value ratio is the ratio of the mortgage loan amount to the property's appraised value or sales price, whichever is less. An example of this is if a residence is sold for $200,000 and the mortgage amount is $150,000, the house has a 75 percent loan to value ratio.