12 Mortgage Terms You Should Probably Know About

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When I waded into the business of trying to buy an apartment, I was soon waist-deep in Things I Didn’t Know. There were so many unfamiliar words and abbreviations and clumps of jargon. But I went to the kind of hoity-toity liberal arts college that was big on literary theory — Zizek, Foucault, Derrida and Butler were scary at first too — so once I discovered that their bizarro language could be decoded, their ideas were pretty straightforward. (Most of the time.)

If I could kick my way through the murk of that and end up swimming, I figured I could do the same thing with Mortgage-ese. And so I did, with nothing to help me but sheer cussedness and my determination not to pay anyone to do anything I could conceivably do myself. Here is a glossary of what I learned are some of the most important mortgage terms. Familiarize yourself with them and soon you too can feel more confident in your home-buying adventures.

But first: watch this quick lesson that details the most important terms

Adjustable-rate mortgage (ARM) A type of home loan in which the interest rate changes according to a standard financial index. ARMs can start off lower than a fixed-rate mortgage, but that can change. I got one that is steady for seven years and then adjusts, which is an especially good deal if the odds are good that you will sell your property in the near term (rather than, you know, 30 years from now).

Appraisal How much the property is worth according to a professional appraiser.

Assessed value How much your house is worth according to the municipality, so that they can figure out how much you have to pay in real estate taxes. Taxes may be annoying, but remember: they help maintain the roads, and potholes outside your front door would make your place less attractive to future buyers.

Closing costs Expenses like attorney’s fees, taxes, escrow payments and title insurance that buyers and sellers incur while transferring ownership of a home. These will, almost inevitably, run higher than you expect, so plan to have more cash on hand than you think you will need.

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My friend, also a nice writer-type woman, had been told that “of course” she should lie in an upcoming salary negotiation, and she was surprised to receive that advice.

Chatting About Letting The Children Choose The Real Estate

Nicole: Hi! It’s the first day of spring! I’m wearing pink. Are you still dealing with the miserable winter weather thing? Winter Storm Aziraphale or whatever?

Ester: Yes, thank you, it’s very unpleasant. I went out anyway to get a free salad, though, because I was so excited to have earned it. What have you done / what are you going to do to celebrate?

Nicole: I haven’t done anything yet, but I am going to go see Cinderella tonight with friends, and I’m also really secretly excited about the Frozen Fever short that they’re running before the movie. (Yes, I am a grown woman.) Are you doing anything to celebrate?

Ester: Hahaha that sounds nice! I really want to do something like that, something that involves going out, since I realized Ben and I have had one date in two months. It’s not coincidental — the one time we went out in February, for our anniversary, friends came and stayed with Lara; it’s just so expensive to get a babysitter, and as it is, when we added up the figures for tax time, we realized we spent over $20,000 on childcare in 2014. When I saw that I laughed til I cried and then I cried til I passed out. It was fun.

Nicole: That is incredible. I feel like making one of those old-person statements: “When I was a teenager I only charged $5 an hour for babysitting!”

Ester: Yeah, man, THOSE DAYS. They are gone. We don’t want to pay someone sad, gross wages, but unfortunately that means we end up not paying anyone at all, because $15 an hour or more adds up. But clearly I am the only person worrying about money in the city of New York right now, because did you read that article in the Times about how children are helping their parents pick up fancy apartments

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It’s a lot to ask a normal teenage kid to not spend $30,000 that mysteriously appeared in his bank account.

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Since it’s tax season, the theme for March will be: taxes.

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Even though the numbers are bigger, an apartment is still just another Thing that you’re buying. A Thing and an Experience: a Home. You realize by doing it than you can do it and then it’s like, hey cool, this was possible after all.

Chatting About “[Financial] Health At Every Size”

Ester: Hello!

Nicole: Hi!

Ester: How’s being back in Seattle after vacation? Have you adjusted your spending habits any, post-vacation, or are you just back to normal?

Nicole: Well, I mean, I didn’t go see Fifty Shades of Grey or The Last Five Years, so that’s a start. But I did end up at a bar with a friend where it was cash only and the ATM was oh-so-conveniently placed next to the bar, so… you know, you try to cut back and everything erases itself.

Sometimes I feel like both weight and spending have a “set point.”

Ester: Ooh, intriguing! Please say more.

Nicole: Well, the “set point” thing is how our bodies naturally gravitate towards specific weight ranges, and some people are naturally fatter or thinner than others. And then if you go outside of that range, over time you find your way back to it. That’s a really rough explanation of that. But it’s kind of the same with spending; there’s a point at which I will be all “NOPE TOO MUCH MONEY,” and so I’ll find my way back to a spending equilibrium, and if I am spending too little money, I’ll … well, you know, I feel like I spend around the same amount of money every month, no matter what happens.

I don’t ever end a month with, like, an extra $800 that I just didn’t spend.

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From our pal Michelle Markowitz: Just wanted to pass along this video from Fast Company on how people really interpret what you say when you ask for a raise (if you’re not careful).

Relive ‘The Billfold Live’

For those of you who missed it: Here’s audio of the live event we hosted on Jan. 28. featuring stories from Anne Helen Petersen, Jazmine Hughes, Jason Diamond, Jia Tolentino, Helaine Olen, Logan Sachon, Christiana Cole, and the Billfold Staff.