Protects the homeowner from weather-related damage, as well as potential liability from events that occur on the property.
Other settlement services:
Fees paid for services associated with the purchase of a home that do not represent compensation to the lender and/or the broker for originating the loan.
An analysis of the cost effectiveness of different alternatives in order to see whether the benefits outweigh the costs.
Property Taxes and Homeowner's Insurance:
A typical monthly mortgage payment consists of amounts for loan principal, interest, property taxes and homeowner's insurance.
Private mortgage insurance (PMI):
An insurance policy that protects lenders against loss if a borrower defaults. Typically required if the loan-to-value (LTV) ratio of the home exceeds 80%.
A lender may charge an origination fee that is additional to any mortgage points you pay. Origination fees are the lender's charge for funding your mortgage with a mortgage broker. The process of funding your loan is called origination.
The percentage of your taxable income that is owed to the state and federal governments. The tax rate increases as the taxable base amount increases.
The period of a loan, generally measured in years. Auto loans generally range from 2 to 5 years. Mortgage loans: 15 to 20 years.
Charge for specific interest rate:
An additional charge, expressed as a percentage of the loan amount, to obtain a lower interest rate.
Mortgage interest tax deduction:
A deduction for taxpayers who pay interest on home mortgage and home equity loan interest, allowed primarily to encourage home ownership.
The sum of all fees and charges from origination-related services. This represents all compensation to the lender and/or broker for originating the loan.
Savings interest rate:
The yearly interest rate you earn on your savings.
A tax assessed on real estate by the local government, usually based on the value of the property (including the land) you own.
The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of money.