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    • Finance/Mortgage (BlizBlaze.net)

    Mortgage breakdown, Finance info and terms
    mortgage basics: amortization vs simple interest

    Terms

    Interest Rate: This is the cost you pay each year to borrow the principal loan amount. It does NOT include any extra fees.

    APR (Annual Percentage Rate): The APR is a calculation designed to more easily compare mortgage offers. It includes your interest rate plus additional fees and charges
    (such as origination fees, closing costs, or points). (Because the APR factors in these extra costs, it is almost always higher than the standard interest rate on the same loan.
    While your monthly payments are based on the interest rate, the APR gives you a better view of the total annual cost of borrowing)

    Loan Term:The duration of your loan (typically 15 or 30 years) dictates your repayment pace.
    A shorter term means higher monthly payments but significantly less interest paid overall.

    Loan Amortization: An amortized loan is a type of loan where regular payments gradually reduce both the principal and interest, ultimately paying off the debt over a set period.

    Initial Principal: This is the original amount borrowed from the lender. It serves as the baseline for calculating interest and determining the repayment schedule.

    Outstanding Principal: A portion of each payment is applied toward reducing the principal as you make payments on your loan. The remaining balance is referred to as the outstanding principal, and it continues to accrue interest until the loan is fully paid off.

    Mortgage Loan Types
    Conventional Loans Government Backed Loans Special Programs Other Specialty Loans
    Fixed Rate Mortgage:
    Your rate and your monthly payment stay the same, year after year. No surprises, no drama.    		 FHA Loan:
    The “Still Building My Credit” Loan Easier credit qualifications and smaller down payments — perfect if you’re not rocking a perfect score yet.    		 First-Time Homebuyer Programs:
    The “Starting Strong” Loan Special perks like lower down payments and grants to help you get the keys to your first place.    		 Bank Statement Loan:
    The “Self-Employed Superstar” Loan No traditional W-2s? No problem. Use your bank statements to show you’re good for it.
    Adjustable-Rate Mortgage (ARM):
    The “Low Upfront, Ride the Rate Later” Loan Start with a lower interest rate (and lower payments) but be ready for it to adjust over time.    		 VA Loan:
    The “Thank You for Your Service” Loan Zero down payment required, no mortgage insurance necessary, and great rates (for eligible veterans, active-duty service members, and surviving spouses).    		 State or Local Housing Agencies:
    The “Homegrown Help” Program Backed by your county or state, these programs are designed for first-time buyers, everyday heroes like teachers and first responders, and folks with modest incomes. Local love, big support.    		 Construction Loan:
    The “Ultimate DIY-er” Loan Building from the ground up? This short-term loan covers the cost of construction — turning blueprints into your future front porch.
    Investment Loan:
    The “Keys to Cash Flow” Loan This loan is for buying rental properties and building wealth, because passive income sounds pretty great.