We all know how favorable it is to look for mortgage in Virginia. But before making you familiar with VA cities and homes real estate agents have on offer, let us discuss a couple of terms related to mortgage.

We have all heard the APR letters. Annual Percentage Rate is the meaning of this abbreviation. APR generally includes finance charges, points, origination fees, interests in a yearly rate, interest rate. As you can understand APR is much higher if we compare it with interest rate. Knowing Annual Percentage Rate a person can compare different types of mortgages.

Closing costs is the next thing to be discussed. These costs generally include taxes, insurance, certifications. Closing costs usually total 4-6 percent of the amount of mortgage. Anoter abbreviation to be discussed is ARM or Adjustable Rate Mortgage in other words. The meaning is clear - interest rates of this mortgage change from time to time, in accordance with an index a person chooses before the issuance of the mortgage. On the initial stage, the rate will be lower in comparison with mortgages with fixed rate, but monthly payments can change.

Balloon mortgage or balloon payment. This is a loan that is fixed and short-term and which involves payments that should be made for a certain period of time and a large payment at a date specified in the contract. Finally, settlement. Settlement is also called closing and means the meeting between lenders, buyers and sellers where funds or property change the owner.

There are a lot more terms that are used when talking about mortgages. The remaining will be discussed in the upcoming articles a bit later.