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Access Card
A plastic card you use to access the money in your account, in this case your HELOC.
Affordability calculator
One of many calculators on the Internet which estimates how much loan a person can afford to borrow.
A timetable for the gradual repayment of a money borrowed.
Annual Percentage Rate (APR)
The Annual Percentage Rate refers to the actual cost of a loan including the rate, points, insurance, and any other related fees (not including credit reports or appraisal charges.)
Annual fee
An annual charge imposed by the lender for maintaining a loan.
Application fee
A fee charged by the lender to cover the origination cost, or any upfront fees, of the loan.
Appraisal fee
The fee an appraiser charges to assess the property value of a property.
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A final lump sum mortgage payment due in full after a set period of time.
A person who borrows money from a lender.
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A limit on how much the variable interest rate can increase annually or during the life of the line of credit.
Closing cost(s)
All expenses related to funding a home equity loan or home equity line of credit.
Conversion fee
The fee charged to convert an adjustable rate mortgage to a fixed-rate loan.
Credit history
A borrower's record of past payment history.
Credit score(s)
A statistical method that lenders use to quickly and objectively assess the credit risk of a loan applicant.
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Draw Period
The timeframe when you can withdraw money from a Home Equity Line of Credit.
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The current market value of a property minus any outstanding loans or liens.
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Fair Isaac Corporation® (FICO®)
The company that developed the FICO® credit score, which is used to judge a borrower's creditworthiness.
Fixed rate loan
A fixed interest rate loan, or installment loan, that does not change or adjust during the course of the loan.
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Home Equity Loan (HEL)
A fixed rate loan, or installment loan, in which your home serves as collateral.
Home Equity Line of Credit (HELOC)
A form of revolving credit in which your home serves as collateral.
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A published cost of money measurement that lenders use to calculate the rate on a mortgage (e.g., T-bill, LIBOR, CMT.)
A global communication network that allows computers worldwide to connect and exchange information.
The monthly payment amount owed to a lender which covers the interest-only portion of the amount borrowed. Your equity does not increase with this type of loan since you are not paying down the principal.
Interest rate
A rate that is charged or paid for the exchange to borrow money.
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A person or company which lends money to borrowers.
Loan-to-value (LTV) ratio
The amount of a mortgage loan divided by the appraised value or sales price.
Loan officer
The person at a lending institution who solicits loans, acts as the representative for the lending institution, and represents the borrower at the lending institution.
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The difference between the interest rate and the index on a loan.
A lien on real estate to secure repayment of a loan.
Mortgage payment
The monthly payment amount owed to a lender which covers the principal and interest on a property.
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Negative Equity
When the current market value of a property is less than the amount owed.
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An upfront fee that a lender may charge a borrower for originating a loan. One point is equal to one percent of the loan amount.
Pre-payment penalty
A penalty for paying a loan early before its due date.
Prime Rate
The rate of interest publicly announced periodically by a lender. It is based on various factors, including banks' costs and desired return, and is it used as a reference point for pricing some loans.
Principal and interest (P & I)
The amount of a home equity loan payment including the principal and the interest
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A member of the National Association of Realtors.
Replacing an older loan with a newer one.
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A type of mortgage loan that is offered to individuals with poor credit.
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Teaser rate
A special introductory rate on an adjustable rate mortgage which is below current market rates to entice borrowers.
Transaction fee
A fee charged each time you draw on your credit line.
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Variable rate
An interest rate that may change periodically, related to an index for the life of the loan.
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The act of taking money from a Home Equity Line of Credit.
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