Loan Basics

• Interest Rate is the loan multiplied by a certain percentage that the bank charges for the length of time it take you repay the loan.
• APR is the Annual Percentage Rate which includes all costs involved in securing the loan (i.e. interest rate, points, annual fees, etc...).
• Lien Holder is generally the bank in which you are borrowing from.
• Title Insurance provides protection for both the buyer and the lender when a title is involved in the purchase if they encounter complications.
• Rescission period is a three business day waiting period after you sign your closing papers to ensure that you want to move forward with the transaction and is federally required for all refinances that are owner-occupied.

Revolving Loan vs Installment Loan:

• Revolving loans, at maturity, are automatically renewed and Installment loans have to be payed back at a specified rate.

Things you should know if you are considering refinancing:

• Refinancing is basically signing for a new loan with different terms, which also includes the same charges and fees that you paid on the original loan. 
• Some of the benefits to refinancing your existing loan:
  • Shorten your loan life
  • Lower your current interest rate and save money over the loan's life
  • Available cash option to pay off other high interest debt
  • Able to refinance multiple times
• Some disadvantages of refinancing your existing loan:
  • Potentially  higher payments - see our Loan/Mortgage Payment Calculator to check what the monthly payment would be in comparison.
  • If you have less than perfect credit, you may not qualify for a lower rate.

Using Home Equity loans:

• Home equity loans are revolving lines of credit where your home is used as the collateral.
• Home equity loans can generally offer a lower interest rate that you will get on an auto loan.
• Home equity loans, if used wisely, can be used in several ways - home renovations, debt consolidation, etc...

Basic info for Debt Consolidation:

• This repayment method is just a way of restructuring your outstanding balances with the lending agencies. Payments are generally negotiated at a lower rate while the overall debt gets repaid faster and improves your credit.