Protects the homeowner from weather-related damage, as well as potential liability from events that occur on the property.
Appraisal value is the market value of an asset that is derived from the appraisal process. Depending on the asset, the method used to appraise the asset will differ. For homes, appraisers often use a method that includes recent sales data of comparable homes. They may also use the replacement method, which is the cost to replace the home at today's prices.
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 item or expense subtracted from adjusted gross income to reduce the amount of income subject to tax.
The amount you may save in taxes from a tax deduction or tax credit.
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.
After-tax interest rate:
The effective interest rate you pay on a loan if you deduct interest expense.
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.
Also known as closing costs, these are the customary costs above and beyond the sales price that must be paid to cover the transfer of ownership at closing.
The period of a loan, generally measured in years. Auto loans generally range from 2 to 5 years. Mortgage loans: 15 to 30 years.
Charge for specific interest rate:
An additional charge, expressed as a percentage of the loan amount, to obtain a lower interest rate.
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.
The gradual reduction of loan principal that occurs as you make periodic loan payments.
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.