Here are some common mortgage terms you will see throughout your homeownership journey:
Amortization schedule: provides you with a list of equal loan payments calculated to pay off debt at the end of a fixed period, including accrued interest on the outstanding principal balance. You can obtain an amortization schedule of your mortgage loan through our Digital Servicing platform or by contacting our Customer Service Department. There may be a nominal fee for this service.
Adjustable-Rate Mortgage (ARM): a loan that has an interest rate that is adjusted periodically based upon a pre-selected index.
Condominium Association Fees: Condo Association fees should be paid by the homeowner directly to their condo association; these fees are not paid out of the escrow account.
Escrow Analysis: RIHousing holds the predetermined amount of real estate tax, insurance, and mortgage insurance that you pay each month in an escrow account until the taxes or insurance are due to be paid. Your escrow account will be reviewed annually.
Homeowners Insurance: pays for losses and damage to your property if something unexpected happens, like a fire or burglary. Your homeowner’s insurance may also cover the contents of your home and provide personal liability coverage. Standard homeowners’ insurance doesn’t cover damage from earthquakes or floods, but it may be possible to add this coverage.
Homeowners insurance also protects your lender’s financial interest in the property. Therefore, lenders require proof of homeowners insurance.
Choosing your insurance provider is up to you, if the provider is licensed and authorized to do business in Rhode Island, and the policy meets the property insurance requirements for your loan.
Loan prepayment: is an option contained in a loan which permits the borrower to make payments in advance of their due date.
Principal curtailment: is an unscheduled additional payment to the current outstanding loan balance. This additional amount may reduce the life of your loan. The account must be current for the curtailment to be allowed.
Real Estate Taxes: RIHousing receives real estate tax information directly from the city or town in which your home is located. We will collect monthly funds from you in the form of an escrow payment to pay your property taxes.
We do not collect money for or pay other local taxes, like sewer or water bills. It is very important that your sewer or water bills are paid when they are due. Non-payment of these bills can lead to foreclosure.
Refinancing: is obtaining a new mortgage loan on a property already owned. RIHousing mortgage customers interested in refinancing their mortgage, may reach out to 401-457-1180 or 1-800-854-1180 for details and information.
Silent Seconds: a “second mortgage” usually for a down payment funds that are normally deferred until either the refinancing or sale of the property. Monthly statements are not created for these types of loans because there is no payment required on these loans.
