Top Ten Loan Terms in San Diego
By Bob Schwartz, CRS,
GRI ©2005
www.brokerforyou.com All rights reserved.
Everyone in San Diego knows that you should never sign
on the dotted line without first reading the contract.
The same goes for loans. Signing a loan without knowing
the terms and what everything means can be harmful to
your finances, credit, and future investments. Before
you sign anything, make sure that you can recognize the
following terms and how they will affect you.
1. Interest rate. The percentage of your loan that is
added to the total that you owe each month is called
your interest rate. The percentage will vary based on
the economy and will affect your payments.
2. Fixed Rate. This is an interest rate that remains at
the same percentage throughout the entire time-span of
your loan.
3. Variable Rate. A variable rate will vary according to
the economy and the charts that are stating what the
rate amount should be. This type of rate normally shifts
every year and adjusts according to a particular given
range of percentages.
4. Principal. The principal is what you will view as
your investment as it is what you pay on your actual
home.
5. Escrow. This is similar to a savings account for your
loan. However much you put in escrow will accumulate
without paying directly into the loan. At the close of
the term you can use it to finish paying off the loan or
to invest in another loan.
6. Title. A title will be your claim to your home after
it is legitimately yours. It states that the property is
yours.
7. Deed. A deed is most frequently used as a title for a
commercial area. Instead of acknowledging ownership it
shows that the property is leased to the one who is
using it as a business.
8. Home Equity. This is a loan or line of credit that
you can get for your home. It will finance up to 8% of
your other loan and be paid back later. This helps you
if you want to consolidate loans or invest more into the
property.
9. Appraisal. After an inspection of the home is made,
an appraisal will be made. This will be an approximated
value of what the home is worth.
10. Equity. This is the actual amount of the property
that you own. Most likely, this is what is being paid
off of your principal amount.
After you've mastered these fundamental terms, you will
be able to expand on your knowledge and find the exact
loan to meet your needs. These basic definitions will
help you in making the right decision for the type of
loan that you want.
ABOUT THE AUTHOR
Bob Schwartz, is a Certified Residential
Specialist, CA licensed real estate broker with
www.Brokerforyou.com. Bob has over 27 years of
residential real estate experience, authored a number of
published articles and served as an expert witness for
San Diego lawyers.
You can contact Bob via e-mail at bob@brokerforyou.com
or visit his highly popular
San Diego real estate website
at:
http://www.brokerforyou.com
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