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This will help you when you are still new in the mortgage business, specifically home buying. By then you would need some terminologies about the basics on mortgages. And through this, you may be able to somehow understand what the basic processes of mortgage are. Along with the terms will be the specific definitions. Real estate buying can be tricky..

Here are the following terms that are usually used in mortgage business:

Underwriting: It is a process for identifying the level of risk that you and your mortgage company will be facing. This is done by an underwriter who does the evaluation of your credit, your available collateral, and your employment, as well as your current debts.

Points: This refers to the payment that you should make upon having a mortgage. It has two categories and these are:
*Discount- the amount is already deductible by the first one that you have paid and this one can help lessen your interest rate.
*Origination- the amount of fees that are to be paid in exchange of the processes and the evaluation that the lender has made. This is not deductible with tax.

Fixed Rate: this is the rate that is constantly given. The rates you will be having will stay the same throughout the period of your loan.

Adjustable Rate: The interest rate shall be changed periodically. They may add penalties for whole payments prior to the given maturity date.

Amortization: It is the decrease on the principal amount owed on the item in mortgage that would depend on the life of the loan.

Down Payment: It is an amount paid primarily as part of the whole fee of the loan. It will be deducted from the principal amount of the loan.

Good Faith Estimate: Within the three days of your application, RESPA would require the lender to give you an estimate for your whole due amount.

Escrow: This means that your funds will be at an escrow account.  This account is with a third party until the closing of your transaction.

Refinancing: If you have stable and good credit standing, this is what you would usually do. By that, they will allow you.

These are the terms that you would usually encounter when you enter the mortgage business. There are some unfamiliar yet professional terms suited for the kind of business. When you are new in mortgage, you would usually ask some questions regarding the processes that they make and the conditions that are there in the transactions. But you will have to ask about those things directly to the lender so that you will be given exact information. And with that, you can start the mortgage process.