| The state of Pennsylvania is home to some of the | | | | pre-designated timeframe before "adjusting". A "1 year |
| most historic happenings in the entire country, so it's not | | | | ARM" would mean that your mortgage interest rate is |
| a surprise that so many families are relocating to or | | | | the same for one year, then it will "adjust" or rise (as |
| buying their first home is this celebrated state. | | | | laymen refer to it). A 2 Year ARM would fall into the |
| But no matter where you are, purchasing your first | | | | same category, adjusting after two years. And so on. |
| home can be a scary topic. Besides all of the legalities | | | | Mortgage professionals also like to say things like "A |
| involved in transferring property, the mere thought of a | | | | 2-28 ARM". When you add 2 + 28, you get 30. 30 is |
| mortgage (and its involved process) can be one of the | | | | the number of years of your mortgage: two years are |
| most intimidating subject matters of one's hectic life. | | | | a fixed rate, and the remaining 28 are not. |
| The options you have can keep you from sleeping for | | | | Escrow Account- You may elect this convenience for |
| weeks - never mind the terminology used by those | | | | money paid each month, in addition to your principal |
| within the lending industry! Lucky for you that you've | | | | and interest payment, to cover your property taxes |
| stumbled upon all of the information you could possibly | | | | and hazard insurance. (It's much easier to put $250 |
| need about terminology used for securing a mortgage | | | | aside each month than come up with $3,000 come tax |
| in Pennsylvania: | | | | time.) |
| Amortization Schedule- For however many years | | | | Fixed Rate- The interest rate is the same for the |
| you're repaying your loan (let's say 30), you will receive | | | | entire loan. |
| a schedule of your monthly payment for each year of | | | | Loan Life- How long the loan is (usually 15 to 30 years). |
| the note, showing exactly how much money goes on | | | | PMI- Private Mortgage Insurance- This is extra money |
| the loan's principal and how much to the interest. | | | | that you may be required to pay each month. It's not |
| ARM- Adjustable Rate Mortgage- You will hear this | | | | hazard insurance, its mortgage insurance- put in place |
| as "arm", not the letters spelled out. This simply means | | | | by the lender to insure your mortgage against possible |
| that your mortgage interest rate will be the same for a | | | | default on your part. |