An escrow account is used by lenders to hold funds for property taxes, homeowners insurance, and other related expenses, ensuring these bills are paid on time.
An amortized loan is repaid through regular payments that cover both interest and principal over a set period, gradually reducing the loan balance to zero.
A mortgage lender provides the funds needed by the buyer to purchase a property, typically in the form of a loan secured by the property itself.
A fixed-rate mortgage has an interest rate that remains constant throughout the life of the loan, providing predictable monthly payments.
PMI is usually required when a borrower makes a down payment of less than 20% of the home's purchase price, protecting the lender in case of default.