HOME+FINANCING+(i.e.+mortgages)

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Home Financing math work
 * __**personal loans**__- a type of credit that is typically started at the time of purchase for a specific asset
 * purposes also require the buyer to pay a portion of the purchase price with their own money, which is called a **__down payment__**
 * the lender would then set up a repayment schedule that would spell out the details called the **__terms of loan__**
 * personal loans time periods 24-72 months
 * a proportion of payment you make will pay the interest charges while the rest will be applied toward reducing the initial loan or **__principal__**

__Sources of Loans:__ 1) Banks 2) Credit unions 3) Other financial institutions 4) Auto companies __Contract Specifics__ 1) $1.00 amount of loan 2) Interest rate to be charged 3) Loan payment schedule __Types of Loans__ Those assets are called **__collateral.__** Stopping payments on a loan is called **__defaulting__** a loan.
 * __Maturity date-__** date when loan will be completely repaid
 * __Secured loans-__** some asset pledged against the loan so that the lender is assured of winding up with some valuable assets of borrower fails to pay off the loan
 * __Unsecured loans-__** have no collateral pledged against the loan.

__**Two basic forms of mortgage**__ __**Reason for ARM**__ __**Teaser rate**-__ extremely low interest for short time period of time that is used as a deal sweetener. __**Sub prime Mortgage**__- high interest rate mortgage loan made for people with poor credit.
 * 1) __fixed rate mortgage__- The interest rate remains the same for the life of the loan.
 * 2) __Adjustable rate mortgage__(ARM)- one where the rate may go up or down over time.
 * 1) Starting rate is lower than available fixed rate.
 * __Costs of buying a home__**
 * 1) appraisal fees
 * 2) home inspection fees
 * 3) mortgage origination fees
 * 4) loan application fees
 * 5) filling fees
 * 6) title insurance
 * 7) closing fees