|
Here's an alphabetical list of terms that can help you better understand
the borrowing process and how to borrow smart.
If you need more information, we offer a list of Frequently Asked Questions.
- Amortization
- A series of payments over a specific period of time calculated to fully
pay the loan amount plus interest by the end of the life of the loan.
- Annual Percentage Rate (APR)
- The cost of credit on a yearly basis expressed as a percentage.
- Application Fee
- Fees that are paid at the time of application. An application fee may include
charges for a property appraisal and a credit report.
- Appraised Value
- The value of your home based on current market conditions.
- Cap
- A limit on how much the variable-interest rate can increase during the
life of the line of credit.
- Closing
- The time and place at which all documents for your loan are signed, dated
and notarized.
- Closing Costs
- Fees paid at closing, that may include attorneys' fees, fees for preparing
and filing a mortgage, for taxes, title search, and insurance.
- Credit Limit
- The maximum amount that you can borrow under a home equity plan.
- Debt-to-Income Ratio
- An indicator of your ability to take on debt, this ratio is the relationship
between your monthly income before taxes and the amount of your minimum
monthly debt payments.
- Equity
- The difference between the appraised value of your home and the outstanding
mortgage balance(s).
- Fixed Rate
- An interest rate that does not change during the life of the loan.
- Home Equity Line of Credit
- A revolving line of credit secured by your home.
- Home Equity Loan
- Installment loan secured by your home.
- Index
- The base for rate changes that a lender uses to decide how much the annual
percentage rate will change over time. One example of an index is the Wall
Street Journal Prime Rate.
- Interest Rate
- The periodic charge, expressed as a percentage, for use of credit.
- Loan-to-Value (LTV) Ratio
- The amount of the new loan or line of credit added to the balance of any
existing liens and then divided by the market value of your home.
- Margin
- The number of percentage points the lender adds to the Index to determine
the annual percentage rate to be charged.
- Minimum Payment
- The
minimum amount that you must pay (usually monthly)
on your account.
- Security Interest
- An interest that a lender takes in the borrower's property to ensure repayment
of a debt, i.e. a mortgage.
- Variable Rate
- An
interest rate that changes periodically in relation
to an index.
Loan Glossary
Frequently Asked Questions (FAQs)
How long does it take to get an answer on my application?
You can get one almost immediately when you apply online via the Washington Federal Savings Bank Web
Site. Most people will receive an answer within a few minutes of clicking
"send." If we can't give you an answer right away, then we'll
let you know that, too.
What is the minimum amount I can borrow for a home equity loan or line
of credit?
The minimum amount on a home equity loan or line of
credit is $2,500.
What can I use a home equity loan or line of credit for?
Just about anything. Consolidate bills, refinance a car loan, make home
improvements, pay for college expenses, make wedding plans ... even pay
off your current mortgage to refinance at a better rate.
What kind of application fees apply?
None.
Will I be charged for an appraisal?
There may be a charge for an appraisal when you apply for a Home Equity Loan or Home Equity Line of
Credit.
Are Home Equity Loans fixed or variable interest rate?
At Washington Federal Savings Bank, home equity loans are fixed rate loans and home equity lines of
credit are variable rate.
What do you mean by "my interest may be tax deductible?"
Interest paid on a home equity loan or line of credit may be tax deductible
in certain situations under the current U.S. Tax Code. Always consult your
tax advisor about whether you qualify for a tax deduction.
|
