b'FINANCING YOUR HOME MOVE MKEoffers several low-down-paymentmortgage. Even if they dont, hiring anmaintenance or improvements on the mortgage products for eligibleinspector is a good way to protect yourinspected property for at least two years participants. FHA-insured loans areinvestment. They may uncover structural,after the inspection has occurred. For available from most lenders who offerelectrical or plumbing problems that couldmore information about regulations or to conventional loans. For information andimpact the sales price problems. But acheck the status of an inspectors license, eligibility requirements, contact yourthorough inspection can be beneficial incall (608) 266-2112 or search for home lender or visit:hud.gov/fha .other ways. The final report can be ainspections at dsps.wi.gov.blueprint for things the buyer should be VA-Guaranteed Loansthinking about five or more years down the road, such as installing a new roof,First-TimeIf you are a veteran of military service,furnace or water heater. HomeHomeBuyersreservist, or on active military duty, youinspections, which typically cost between may qualify for a loan guarantee from the$300 and $600, can reveal structuralBuying your first home can be challenging Department of Veterans Affairs. Theseproblems that may impact the sellinggiven all the details and the money loans have low down payments.price and your interest in the home.needed for a downpayment. Fortunately, Home inspectors are licensed by thethe state of Wisconsin offers educational Home Inspections state. Under Wisconsin law, buildingand financial help through the Wisconsin inspectors are liable for damages thatHousing and Economic Development Lenders may require that you have yourarise from an act or omission relating toAgency. For more information, visit: prospective home inspected by atheir inspection. In addition, they arewheda.com/homeownership-and-professional before they approve yourprohibited from performing any repairs,renters/home-buyersCommon Financial Terms APR (Annual Percentage Rate): Because Escalator Clause: A provision that allows PITI: An acronym that stands for princi-it includes points, expenses and otherthe lender to change the interest rates orpal, interest, taxes and insurance. This is costs charged by the lender, this is thethe amount of the loan if market condi- the total monthly payment owed to the actual interest rate you will be paying.tions changelender. It includes payment on the princi-Since all lenders must calculate this figurepal and interest, as well as money the same way, the APR provides an excel-Fixed-Rate Mortgage: A loan with a fixedescrowed for insurance and taxes.lent method for comparing mortgage pro- interest rate that remains constant over posals. the life of the loan Points: Interest that is paid in advance of the loan. A point is equal to one percent ofAppraisal: An estimate of the propertys Home Warranty: Insurance purchased bythe loan value. Three points on a $100,000 market value based on the condition ofthe seller that covers the cost of repairingmortgage is equal to $3,000. Paying points the structure, the value of the land and themajor appliances, such as the furnace andlowers the monthly payments. neighborhood. Appraisals are usuallywater heater, if they fail within a year of needed whenever a home is bought, soldthe purchase date Private Mortgage Insurance (PMI): or refinanced.Insurance that protects the lender in the event the homeowner defaults on theAssumable Loan: A mortgage that can be Interest-Only Mortgage: A loan in whichmortgage. It is typically required when the taken over by the buyer for a fee. Thesethe mortgage holder makes payment onlydown payment is less than 20 percent of mortgages avoid closing costs and loanon the interestthe homes cost but can vary by lender. fees.Joint Tenancy: A type of ownership that Title: A document that indicates a buyerClosing Costs: Payments made on closingallows two or more parties to own a parcelhas clear ownership of a property. In order day to cover attorney fees, appraisals,of property together. In the event of oneto protect themselves, lenders typically will credit reports, escrow fees, prepaid insur- joint tenants death, ownership of thenot issue loans without this document. ance premiums and other fees property automatically passes to the sur-viving joint tenant(s). Title Insurance: Insurance that protectsCommon Area Assessments: Also knownthe homeowner and the lender in the as homeowner association fees, these are Loan-to-Value Ratio: The percentage ofevent there is an ownership dispute charges paid by unit owners to maintaina propertys value that can be lent to a the propertyborrower. Typically, financial institutions Variable-Rate Mortgage: A mortgage in will not lend more than 80 percent.which the interest rate is adjusted toDown Payment: The amount of cash paidreflect market conditions. Variable-rate by the homeowner at the time of closing. Mechanics Lien: A lien against the title ofmortgages feature interest rates lower Any down payment that is less than 20a property for work done on a house.than fixed-rate mortgages, but the rate percent of the purchase price usuallyCourts impose liens for non-payment ofcan change quickly. They typically have requires mortgage insurance, whichhome-related services and must be satis- caps that prevent the rate from exceeding increases the buyers monthly payments.fied at the time a home is sold.a fixed amount.discovermilwaukee.com 77'