Don't let anyone rush you and ask as many questions as you need. A percentage of the home purchase price that the buyer pays in cash, instead of financing with borrowed money. Mortgage insurance Insurance that protects the lender from financial loss if the homeowner defaults on the mortgage. PMI usually is required if the downpayment is less than 20 percent of the purchase price of the home. Premiums are paid monthly by the borrower even though the insurance protects the lender.
Mortgage insurance is available from private-sector companies and governmental agencies.
Credit report A summary of a person's track-record of repaying borrowed money, including credit cards, department store cards, mortgages, car and boat loans, personal credit lines, home equity loans and so on. A credit score is a numerical representation of a person's credit-worthiness. A credit report doesn't include personal lifestyle or medical information. ARM Adjustable-rate mortgage. Hybrid mortgages may be a combination of a fixed rate and an adjustable rate or have an initial fixed rate followed by an adjustment after five, seven or 10 years.