A mortgage loan is a loan for which real estate serves as collateral for repayment in case of default.
Refinancing refers to the replacement of an existing debt obligation with a debt obligation bearing different terms. A refinance closing can take place to reduce interest rate/interest costs (by refinancing at a lower rate), to extend the repayment time, to pay off other debt(s), to reduce one’s periodic payment obligations (sometimes by taking a longer-term loan), to reduce or alter risk (such as by refinancing from a variable-rate to a fixed-rate loan), and/or to raise cash for investment, consumption, or the payment of a dividend.
Reverse Mortgage Closings
A reverse mortgage enables older homeowners (62+) to convert part of the equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. The reverse mortgage is aptly named because the payment stream is “reversed.” Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to you.
Home Equity Loan Closings
A home equity loan closing, (aka HELOC), is a credit line that is kept open and restored as you pay off what is owed. An equity line of credit also has a high credit limit similar to a credit card that you are allowed to draw upon as needed. Most lenders require interest-only payments each month, allowing you the flexibility to pay down the principal of the loan when you can.
FHA Loan Closings
FHA loan closings are fixed- or adjustable-rate loans insured by the U.S. Department of Housing and Urban Development. FHA loans are designed to make housing more affordable, particularly for first-time homebuyers.
A loan modification is a permanent change in one or more of the terms of a mortgagor’s loan, allowing the loan to be reinstated, and resulting in a payment the mortgagor can afford.