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