United Bank & Trust
Personal/Small BusinessLoginBusiness BankingLogin

Loan Services


Terms To Know

These are important terms you should know as you begin the home loan process. Our mortgage specialists are here to help you understand the process from start to finish.

Closing Costs

Costs the homebuyer pays, in addition to down payment, at the time of purchase. Usually includes appraisal fee, title search, and lawyer's fees, but may include points and other fees (i.e., one-year homeowner's insurance and/or PMI).

Down Payment

A portion of the purchase price paid in cash upfront, reducing the amount of the loan or mortgage.

Escrow

Most often, homeowner's insurance and taxes are held in escrow. A portion of your monthly mortgage payment will include a monthly homeowner's insurance and property tax amount. The funds then accumulate in the escrow account to be paid when due.

Homeowner's Insurance

Lenders require homebuyers to purchase homeowner's insurance to protect from losses due to fire, wind or flood. Insurance also protects the homeowner from responsibility should an injury occur on the property.

Loan-to-Value Ratio

One of the factors lenders consider before approving a mortgage, this is the loan amount expressed as a percent of the property's market value.

Points

Finance charges paid to the lender as part of the closing costs. (1 point = 1% of the total mortgage loan.) Points can be negotiable and are sometimes tied to the interest rate. Paying more points to get a lower interest rate may be a good idea if you plan to take a long-term loan.

Private Mortgage Insurance (PMI)

Insurance the buyer carries to guarantee the lender is paid off if the buyer fails to pay on a mortgage. PMI is generally required for mortgages with less than 20% down.