prepayment penalty, you would have agreed to this in your note when you closed on your home. Not all mortgages have a prepayment penalty. Principal The principal is the amount of a mortgage loan that you borrowed that you have to pay back. Your monthly payment includes a portion of that principal that creates your equity interest. Short sale A short sale is a sale of your home for less than what you owe on your mortgage. A short sale is an alternative to foreclosure, but because it is a sale, you will have to leave your home. If your lender or servicer agrees to a short sale, you may be able to sell your home to pay off your mortgage, even if the sale price or proceeds turn out to be less than the balance remaining on your mortgage. A short sale is a type of loss mitigation. If you live in a state in which you are responsible for any deficiency, which is the difference between the value of your property and the amount you still owe on your mortgage loan, you will want to ask your lender to waive the deficiency. If the lender waives the deficiency, get the waiver in writing and keep it for your records. Survey A survey is a drawing of your property showing the location of the lot, the house and any other structures, as well as any improvements on the property. Title service fees Title service fees are part of the closing costs you pay when getting a mortgage. When you purchase a home, you receive a document most often called a deed, which shows the seller transferred their legal ownership, or “title,” to the home to you. Title service fees are costs associated with issuing a title insurance policy for the lender.
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