3 in 1 ARM
3/1 ARM is an adjustable-rate mortgage, or ARM, that has an initial interest rate for the first three years, and thereafter adjusts each year
80-20 Loan
Also known as 100% Financing, allows for an 80% first mortgage plus a 20% Home Equity second that serves as the down-payment. ...
Acceleration
The right of the mortgagee (lender) to demand the prompt repayment of the home loan balance upon the default of the mortgagor (borrower) or by using the right vested in the Due-on-Sale Clause.
Adjustable Rate Mortgage (ARM)
Is a mortgage in which the interest rate is adjusted periodically based on a pre-selected index. And sometimes known as the re negotiable rate mortgage the variable rate mortgage or the Canadian rollover mortgage.
Agreement for Sale
A document in which the buyer agrees to buy certain estate (or personal property) and the sellar agrees to sell under stated terms and conditions. Also called sales contract binder or earnest money contract.
Amortization
Gradual debt reduction. Usally the reduction is made according to a pre-determined schedule for installment payments
Amortization tables
Mathematical formula for calculating a borrower's monthly payments,based on the amount borrowed, the interest rate and the term of the loan.
Annual Percentage Rate (APR)
A term used in the Truth in Lending Act to represent the whole cost of a loan including interest and loan fees.
Appraisal
Formal written estimation of the latest market value of a home.
Appraiser
The appraiser decides the market value of a home based on its condition and the selling prices of comparable homes recently sold in the area. His of her job is to compute a fair estimate of market value to help the lender decide a reasonable loan amount.
Apprecition
An increase in value the opposite of depreciation
APR
Is the 'Annual Percentage Rate' which helps compare the total cost of comprable home loans. It takes into account the length of the term of the mortgage, the amount of interest you will pay, and other charges such as any fees.
ARM
An adjustable rate mortgage, the interest rates fluctuates
Assessed Valuation
The value that a taxing authority places upon personal property for the purposes of taxation.
Assumption
The contract between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller.
Balloon (Payment) Mortgage
Usually a short-term fixed-rate loan which involves a set interest rate for a certain period of time (usually 5 or 7 years) and one large payment for the remaining amount of the principal at the conclusion of that time frame (may be able to convert or refinance).
Borrower
A mortgagor who receives funds in the form of a loan with the obligation of repaying the loan in full with interest if applicable.
Bridge Loan
Short-term financing which is expected to be paid back relatively quickly
Broker
One who receives a commission or fee for bringing buyer and seller together and assisting in the negotiation of agreements between them.
Building Code
The local regulations that control construction and materials used in construction. Building codes are based on safety and health standards.
Buy-Down
A method of lowering the buyer's monthly payment for a short period of time. The home builder or borrower subsidizes the mortgage by lowering the interest rate for the first few years of a loan.
Buyers Agent
A buyer's agent will offer research materials that help you make a realistic offer.
Cash Out
Cashing out refers to the refinancing of a loan where the borrower will take out money on their own home. If a home is appraised at $100000 and the borrower's outstanding home loan is $600 it is possible to enter into an 80% cash-out refinance transaction for a loan of $80000 (80% of $100000). The new mortgage of $80000 will pay off the $60000 loan and leave $20000 cash-out to the borrowers.
Certificate of Occupancy
Written authorization given by a local municipality that allos a newly built or substantially completed structure to be inhabitated.
Closing
The conclusion of a transaction. In real estate closing intales the delivery of a deed financial adjustments the signing of notes and the disbursement of funds necessary to the sale or loan transaction.
Closing Costs
All of the costs to the buyer and seller individually that are associated with the purchase sale or financing of real property. They include but are not limited to proprating of agreed items such as taxes and rents the cost of title insurance policies and the cost of credit reports recording fees and escrow fees.
Closing Statement
A financial disclosure giving an account of all funds received and expected at the closing including the escrow deposits for taxes hazard insurance and mortgage insurance.
Collateral
Property pledged as security for a debt.
Commitment
An agreement between a lender and a borrower to loan money at a future date subject to compliance with stated conditions. Condominium
Condo for short, is a form of housing tenure.
Contingency
A condition that must be met before a contract is binding.
Contract of Sale
A contract between a purchaser and a seller of real property to convey a title after certain agreements have been met and payments have been made.
Conventional Mortgages
A conventional loan is the most common type of mortgage. With low down payments conventional mortgages are usually insured by private mortgage insurance companies (PMI). Private mortgage insurance adds a relatively small cost to your financing ( about 6/10 of one percent of the loan amount per year or $600 per year on a $100000 loan) but it allows you to buy a home with a lower down payment.
Credit Rating
A rating given to a person to establish willingness to pay obligations based upon one's past history of good payment.
Credit Report
A report to a prospective lender on the credit standing of a prospective borrower to help determine credit worthiness.
Debt Consolidation
When one combines all smaller loans into one big loan to lower monthly bills.
Debt-to-Income Ratio
Long-term debt expenses as a percentage of monthly income.
Deed of Trust
In many states this document is used in place of a mortgage to secure the payment of a note.
Demand Clause
Demand Clause is empowering the mortgage lenders to demand payments of the total outstanding balance for any reasons to protect them.
Department of Veteran Affairs (VA)
An independent agency of the federal goverment created in 1930. The VA home loan guaranty program is designed to encourage lenders to offer long-term low downpayment mortgages toeligible veterans by guaranteeing the lender against loss.
Department of Veterans Affairs (VA)
An autonomous agency of the federal government that guarantees low or no down payment home loans to entitled veterans.
Discount Fee
In an ARM with an initial rate discount the lender gives up a number of percentage points in interest to give the borrower a lower rate and lower payments for part of the mortgage term (usually for one year or less). After the discount period the ARM rate will probably go up depending on the index rate.
Down Payment
When you borrow money for a home any lender will ask you to contribute some of your own money to the purchase of the house. A lender will usually require a down payment of at least 20% of the sales price unless the buyer purchases mortgage insurance.
Due-on-sale Clause
A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home.
Earnest Money
sum of money given to bind a sale of real estate.
Equal Credit Opportunity Act (ECOA)
Is a federal law that requires lenders and other creditors to make credit equally available without prejudice based on race color religion national origin age sex marital status or receipt of income from public assistance programs.
Equity
The difference between fair market value and the current amount the owner owes on the property.
Equity Line
Line of credit based on the amount of equity in your home.
Escrow
An amount set up by the lender into which the borrower makes periodic payments for taxes hazard insurance assessments and mortgage insurance premiums.
Fair Market Value
The price at which property is transferrred between a willing buyer and a willing seller. Fannie Mae
The Fannie Mae Foundation is the nation's largest foundation devoted to affordable housing.
Farmers Home Administration (FmHA)
Provides loans to farmers and qualified borrowers. Federal Home Loan Mortgage Corporation (FHLMC) AKA Freddie Mac. An agency that buys conventional home loans from banks.
Federal Housing Administration (FHA)
Part of HUD. They insure residential home loans made by private lenders.
Federal National Mortgage Association (FNMA)
A company created by Congress that buys and sells residential mortgages including those insured by FHA or VA.
FHA
FEDERAL HOUSING ADMINISTRATION - It's main activity is the insuring of residential home loans made by private lenders.
FHA Loan
A loan insured by the Federal Housing Administration open to all qualified home purchasers.
FHA Mortgages
The Federal Housing administration a government agency created in 1934 provides insurance on some types of home loans.The buyer pays a one-time fee of 3.8% of the loan amount for the mortgage insurance premium at closing time.
FHLMC
FEDERAL HOME LOAN MORTGAGE CORPORATION - A private corporation created by Congress to support the secondary mortgage market.Popularly known as the Freddie Mac.
First Mortgage
A real estate loan that creates a primary lien against real property.
Fixed Rate Mortgage
A mortgage which the interest rate is set for the term of the loan.
FNMA
FEDERAL NATIONAL MORTGAGE ASSOCIATION - A private corporation created by Congress to support the secondary mortgage market.
Foreclosure
In the event that the borrower fails to pay back the loan through mortgage payments the lender has the right to put the home up on the market for sale to recover the money owed to the lender.
Freddie Mac
See FHLMC.
Good Faith Estimate
An estimate of all the costs associated with a purchase or refinance. This may include points closing costs escrow.
Government National Mortgage Association (GNMA)
AKA Ginnie Mae provides sources of funds for residential mortgages guaranteed or insured by FHA or VA.
Graduated Payment Mortgage (GPM)
A type of flexible-payment mortgage where the payments increase for a specified period of time and then level off. This kind of mortgage has negative amortization built into it.
Gross Monthly Income
The amount of consistent and stable income that an individual receives each month averaged over a period of time. This amount includes overtime pay bonuses commissions and income from dividends or interest provided that the individual can show a history of receiving such income.
Hard Money Loan
A specific type of financing in which a borrower receives funds based on the value of a specific parcel of.
Hazard Insurance
A contract that pays for loss on a home from certain hazards.
High Risk Lenders
Lenders who make loans to higher-risk clients.
Home Inspection
The purpose of your personal inspection is only to eliminate those properties from consideration that have too many obvious deficiencies.
Homeowners Association
An organization of homeowners residing within a particular devlopment whose major purposes is to maintain and provide community facilities and services for the enjoyment of the residents.
HSH
The HSH Mortgage Survey, which includes everything you need to know about mortgages offered around the country, updated weekly.
Impound
That portion of a borrower's monthly payments held by the lender or servicer to pay for taxes hazard insurance mortgage insurance lease payments and other items as they become due.
Index
The measure of interest rate changes the lender uses to decide how much the interest rate on an ARM will change over time.
Interest
Money paid for the use of money -- that is money paid for over a loan.
Investor
A money source for a lender or bank
Jumbo Loan
A loan which is larger than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
LEM
The Location Efficient Mortgage (LEM)is a mortgage that helps people become homeowners in location efficient communities.
Lender
Any person or institution that provides a borrower with money.
LIBOR
Which stand for London Interbank Offered Rate, are benchmark interest rates for many adjustable rate mortgages, business loans, and financial instruments traded on global financial markets.
Lien
A claim on property of another as security against the payment of a just debt.
Loan
An amount of money a borrower will take from a lender to pay for a purchase.
Loan Officer
Loan officers facilitate lending by finding potential clients and assisting them in applying for loans.
Loan-to-Value Ratio
The relationship between the amount of a home loan and the total value of the property.
Lock-In Rate
A agreement from a lender to make a loan at a pre-set interest rate at some future date usually for not more than 90 days.
Margin
The number of percentage points a lender adds to the index rate to calculate the ARM interest rate at each adjustment.
Market Value
The highest price that a willing buyer would pay and the lowest that a willing seller would accept.
Mortgage
An interest in real property given for security for the payment of an obligation.
Mortgage Calculator
This calculator will compute the monthly principal and interest payment on a mortgage. It does not include insurance or taxes.
Mortgage Insurance
A policy that allows mortgage lenders to recover part of their financial losses if a borrower fails to full re-pay a loan. Mortgage Investor
Any person or institution that invests in mortgages.
Mortgage Life Insurance
A type of term life insurance. The amount of coverage decreases as the mortgage balance declines. In the event that the borrower dies while the policy is in force the debt is paid by insurance proceeds.
Mortgagee
A lender to whom property is conveyed as security for the loan.
Mortgagor
One who borrows money giving as security a mortgage a deed of trust on real property.
Negative Amortization
Occurs when the monthly payments on the mortgage do not cover all of the interest cost. The interest cost that isn't covered is added to unpaid principal balance.
Origination Fee
The fee charged by a lender to prepare loan documents process underwrite make credit checks inspect and sometimes appraise a property.
PITI
Principal Interest Taxes and Insurance are the components of mortgage payments.
PMI Insurance
Private mortgage insurance enables borrowers to obtain a larger loan amount because the lender is protected against default.
Point
A dollar amount paid to a lender for making a loan. A point is one percent of the loan amount.
Power of Attorney
A legal document authorizing a person to act on behalf of another.
Prepaids
Necessary to create an escrow account or to adjust the seller's existing escrow account.
Prepayment
A privilege in a mortgage permitting a borrower to make payments in advance of their due date.
Prepayment penalty
Money charged for an early repayment of debt. Prepayment penalties are allowed in some form in 36 states and the District of Columbia.
Pre-qualification
Qualifying a borrower for a loan amount before looking for a home. Final approval subject to appraisal of the property.
Principal
The original blanace of money loaned excluding interest. Also the remaining balance of a loan excluding the interest.
Purchasing
Obtaining a home loan for the acquisition of property usually a home.
Rate
A percentage of the monthly mortgage payment that is paid to the lender.
Real Estate Broker
The seller of the house pays the real estate broker to attract potential buyers and help negotiate the contract between the seller and the buyer. The broker identifies available properties for buyers and shows them homes that meet their criteria.
Real Estate Settlement Procedures Act (RESPA)
Short for the Real Estate Settlement Procedures Act. RESPA is a federal law that in part allows consumers to review information on known or estimated settlement costs once after application and once prior to or at a settlement.
Realtor
A member of National Association of Realtors.
Refinance
Obtaining a new home loan on a property already owned.
RESPA
Real Estate Settlement Procedures Act. RESPA is a federal law which requires lenders to provide home mortgage borrowers with information about known or estimated settlement costs.
Second Mortgage
When one takes out a second mortgage to cash out equity in the home.
Second Trust
A mortgage that is made subsequent to another mortgage and subordinate to the first one.
Sellers Agent
Agents that help aid home buyers in finding a home that they can afford and will be satisfied with.
Servicer
After a home loan closes the loan servicer collects the payments manages escrow accounts pays escrowed taxes and insurance and manages delinquent payments. Lenders often "release" servicing to another business which means that a home buyer will not necessarily send house payments to the original lender. Settlement The closing of a home loan.
Stamp Duty
Government tax you have to pay on the purchase price of a property worth £60,000 or more.
Subprime Credit
Refers to less than perfect credit, or unsatisfactory payment history.
Title
The evidence of the right to or ownership in property.
Title Insurance
A policy usually issued by a title insurance company which insures a home buyer against errors in the title search (Owners Title Insurance). The cost of the policy is usually a function of the value of the property and is often borne by the purchaser and/or seller. Policies are also available to protect the lender's interests (Lenders Title Insurance).
Truth in Lending Act
AKA Regulation Z. A federal law requiring disclosure of the Annual Percentage Rate to home buyers shortly afterapplying for the loan.
Underwriter
He/she who performs the analysis of the risk involved in making a loan to a potential home buyer based on credit employment assets and other factors.
Unsecured Note
A loan that is not backed by collateral property.
VA Mortgages
If you are current in the United States military or if you have ever served in U.S. armed forces you may be eligible to get a loan insured by the Veterans Administration.
Variable Rate Mortgage (VRM)
Adjustable Rate Mortgage.
Verification of Employment
A document signed by a borrower's employer verifying his/her position and salary.
Wraparound Mortgage
Results when an existing assumable loan is combined with a new loan resulting in an interest rate somewhere between the old rate and the current market rate. The payments are made to a second lender or the previous homeowner who then forwards the payments to the first lender after taking their share.
3/1 ARM is an adjustable-rate mortgage, or ARM, that has an initial interest rate for the first three years, and thereafter adjusts each year
80-20 Loan
Also known as 100% Financing, allows for an 80% first mortgage plus a 20% Home Equity second that serves as the down-payment. ...
Acceleration
The right of the mortgagee (lender) to demand the prompt repayment of the home loan balance upon the default of the mortgagor (borrower) or by using the right vested in the Due-on-Sale Clause.
Adjustable Rate Mortgage (ARM)
Is a mortgage in which the interest rate is adjusted periodically based on a pre-selected index. And sometimes known as the re negotiable rate mortgage the variable rate mortgage or the Canadian rollover mortgage.
Agreement for Sale
A document in which the buyer agrees to buy certain estate (or personal property) and the sellar agrees to sell under stated terms and conditions. Also called sales contract binder or earnest money contract.
Amortization
Gradual debt reduction. Usally the reduction is made according to a pre-determined schedule for installment payments
Amortization tables
Mathematical formula for calculating a borrower's monthly payments,based on the amount borrowed, the interest rate and the term of the loan.
Annual Percentage Rate (APR)
A term used in the Truth in Lending Act to represent the whole cost of a loan including interest and loan fees.
Appraisal
Formal written estimation of the latest market value of a home.
Appraiser
The appraiser decides the market value of a home based on its condition and the selling prices of comparable homes recently sold in the area. His of her job is to compute a fair estimate of market value to help the lender decide a reasonable loan amount.
Apprecition
An increase in value the opposite of depreciation
APR
Is the 'Annual Percentage Rate' which helps compare the total cost of comprable home loans. It takes into account the length of the term of the mortgage, the amount of interest you will pay, and other charges such as any fees.
ARM
An adjustable rate mortgage, the interest rates fluctuates
Assessed Valuation
The value that a taxing authority places upon personal property for the purposes of taxation.
Assumption
The contract between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller.
Balloon (Payment) Mortgage
Usually a short-term fixed-rate loan which involves a set interest rate for a certain period of time (usually 5 or 7 years) and one large payment for the remaining amount of the principal at the conclusion of that time frame (may be able to convert or refinance).
Borrower
A mortgagor who receives funds in the form of a loan with the obligation of repaying the loan in full with interest if applicable.
Bridge Loan
Short-term financing which is expected to be paid back relatively quickly
Broker
One who receives a commission or fee for bringing buyer and seller together and assisting in the negotiation of agreements between them.
Building Code
The local regulations that control construction and materials used in construction. Building codes are based on safety and health standards.
Buy-Down
A method of lowering the buyer's monthly payment for a short period of time. The home builder or borrower subsidizes the mortgage by lowering the interest rate for the first few years of a loan.
Buyers Agent
A buyer's agent will offer research materials that help you make a realistic offer.
Cash Out
Cashing out refers to the refinancing of a loan where the borrower will take out money on their own home. If a home is appraised at $100000 and the borrower's outstanding home loan is $600 it is possible to enter into an 80% cash-out refinance transaction for a loan of $80000 (80% of $100000). The new mortgage of $80000 will pay off the $60000 loan and leave $20000 cash-out to the borrowers.
Certificate of Occupancy
Written authorization given by a local municipality that allos a newly built or substantially completed structure to be inhabitated.
Closing
The conclusion of a transaction. In real estate closing intales the delivery of a deed financial adjustments the signing of notes and the disbursement of funds necessary to the sale or loan transaction.
Closing Costs
All of the costs to the buyer and seller individually that are associated with the purchase sale or financing of real property. They include but are not limited to proprating of agreed items such as taxes and rents the cost of title insurance policies and the cost of credit reports recording fees and escrow fees.
Closing Statement
A financial disclosure giving an account of all funds received and expected at the closing including the escrow deposits for taxes hazard insurance and mortgage insurance.
Collateral
Property pledged as security for a debt.
Commitment
An agreement between a lender and a borrower to loan money at a future date subject to compliance with stated conditions. Condominium
Condo for short, is a form of housing tenure.
Contingency
A condition that must be met before a contract is binding.
Contract of Sale
A contract between a purchaser and a seller of real property to convey a title after certain agreements have been met and payments have been made.
Conventional Mortgages
A conventional loan is the most common type of mortgage. With low down payments conventional mortgages are usually insured by private mortgage insurance companies (PMI). Private mortgage insurance adds a relatively small cost to your financing ( about 6/10 of one percent of the loan amount per year or $600 per year on a $100000 loan) but it allows you to buy a home with a lower down payment.
Credit Rating
A rating given to a person to establish willingness to pay obligations based upon one's past history of good payment.
Credit Report
A report to a prospective lender on the credit standing of a prospective borrower to help determine credit worthiness.
Debt Consolidation
When one combines all smaller loans into one big loan to lower monthly bills.
Debt-to-Income Ratio
Long-term debt expenses as a percentage of monthly income.
Deed of Trust
In many states this document is used in place of a mortgage to secure the payment of a note.
Demand Clause
Demand Clause is empowering the mortgage lenders to demand payments of the total outstanding balance for any reasons to protect them.
Department of Veteran Affairs (VA)
An independent agency of the federal goverment created in 1930. The VA home loan guaranty program is designed to encourage lenders to offer long-term low downpayment mortgages toeligible veterans by guaranteeing the lender against loss.
Department of Veterans Affairs (VA)
An autonomous agency of the federal government that guarantees low or no down payment home loans to entitled veterans.
Discount Fee
In an ARM with an initial rate discount the lender gives up a number of percentage points in interest to give the borrower a lower rate and lower payments for part of the mortgage term (usually for one year or less). After the discount period the ARM rate will probably go up depending on the index rate.
Down Payment
When you borrow money for a home any lender will ask you to contribute some of your own money to the purchase of the house. A lender will usually require a down payment of at least 20% of the sales price unless the buyer purchases mortgage insurance.
Due-on-sale Clause
A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home.
Earnest Money
sum of money given to bind a sale of real estate.
Equal Credit Opportunity Act (ECOA)
Is a federal law that requires lenders and other creditors to make credit equally available without prejudice based on race color religion national origin age sex marital status or receipt of income from public assistance programs.
Equity
The difference between fair market value and the current amount the owner owes on the property.
Equity Line
Line of credit based on the amount of equity in your home.
Escrow
An amount set up by the lender into which the borrower makes periodic payments for taxes hazard insurance assessments and mortgage insurance premiums.
Fair Market Value
The price at which property is transferrred between a willing buyer and a willing seller. Fannie Mae
The Fannie Mae Foundation is the nation's largest foundation devoted to affordable housing.
Farmers Home Administration (FmHA)
Provides loans to farmers and qualified borrowers. Federal Home Loan Mortgage Corporation (FHLMC) AKA Freddie Mac. An agency that buys conventional home loans from banks.
Federal Housing Administration (FHA)
Part of HUD. They insure residential home loans made by private lenders.
Federal National Mortgage Association (FNMA)
A company created by Congress that buys and sells residential mortgages including those insured by FHA or VA.
FHA
FEDERAL HOUSING ADMINISTRATION - It's main activity is the insuring of residential home loans made by private lenders.
FHA Loan
A loan insured by the Federal Housing Administration open to all qualified home purchasers.
FHA Mortgages
The Federal Housing administration a government agency created in 1934 provides insurance on some types of home loans.The buyer pays a one-time fee of 3.8% of the loan amount for the mortgage insurance premium at closing time.
FHLMC
FEDERAL HOME LOAN MORTGAGE CORPORATION - A private corporation created by Congress to support the secondary mortgage market.Popularly known as the Freddie Mac.
First Mortgage
A real estate loan that creates a primary lien against real property.
Fixed Rate Mortgage
A mortgage which the interest rate is set for the term of the loan.
FNMA
FEDERAL NATIONAL MORTGAGE ASSOCIATION - A private corporation created by Congress to support the secondary mortgage market.
Foreclosure
In the event that the borrower fails to pay back the loan through mortgage payments the lender has the right to put the home up on the market for sale to recover the money owed to the lender.
Freddie Mac
See FHLMC.
Good Faith Estimate
An estimate of all the costs associated with a purchase or refinance. This may include points closing costs escrow.
Government National Mortgage Association (GNMA)
AKA Ginnie Mae provides sources of funds for residential mortgages guaranteed or insured by FHA or VA.
Graduated Payment Mortgage (GPM)
A type of flexible-payment mortgage where the payments increase for a specified period of time and then level off. This kind of mortgage has negative amortization built into it.
Gross Monthly Income
The amount of consistent and stable income that an individual receives each month averaged over a period of time. This amount includes overtime pay bonuses commissions and income from dividends or interest provided that the individual can show a history of receiving such income.
Hard Money Loan
A specific type of financing in which a borrower receives funds based on the value of a specific parcel of.
Hazard Insurance
A contract that pays for loss on a home from certain hazards.
High Risk Lenders
Lenders who make loans to higher-risk clients.
Home Inspection
The purpose of your personal inspection is only to eliminate those properties from consideration that have too many obvious deficiencies.
Homeowners Association
An organization of homeowners residing within a particular devlopment whose major purposes is to maintain and provide community facilities and services for the enjoyment of the residents.
HSH
The HSH Mortgage Survey, which includes everything you need to know about mortgages offered around the country, updated weekly.
Impound
That portion of a borrower's monthly payments held by the lender or servicer to pay for taxes hazard insurance mortgage insurance lease payments and other items as they become due.
Index
The measure of interest rate changes the lender uses to decide how much the interest rate on an ARM will change over time.
Interest
Money paid for the use of money -- that is money paid for over a loan.
Investor
A money source for a lender or bank
Jumbo Loan
A loan which is larger than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
LEM
The Location Efficient Mortgage (LEM)is a mortgage that helps people become homeowners in location efficient communities.
Lender
Any person or institution that provides a borrower with money.
LIBOR
Which stand for London Interbank Offered Rate, are benchmark interest rates for many adjustable rate mortgages, business loans, and financial instruments traded on global financial markets.
Lien
A claim on property of another as security against the payment of a just debt.
Loan
An amount of money a borrower will take from a lender to pay for a purchase.
Loan Officer
Loan officers facilitate lending by finding potential clients and assisting them in applying for loans.
Loan-to-Value Ratio
The relationship between the amount of a home loan and the total value of the property.
Lock-In Rate
A agreement from a lender to make a loan at a pre-set interest rate at some future date usually for not more than 90 days.
Margin
The number of percentage points a lender adds to the index rate to calculate the ARM interest rate at each adjustment.
Market Value
The highest price that a willing buyer would pay and the lowest that a willing seller would accept.
Mortgage
An interest in real property given for security for the payment of an obligation.
Mortgage Calculator
This calculator will compute the monthly principal and interest payment on a mortgage. It does not include insurance or taxes.
Mortgage Insurance
A policy that allows mortgage lenders to recover part of their financial losses if a borrower fails to full re-pay a loan. Mortgage Investor
Any person or institution that invests in mortgages.
Mortgage Life Insurance
A type of term life insurance. The amount of coverage decreases as the mortgage balance declines. In the event that the borrower dies while the policy is in force the debt is paid by insurance proceeds.
Mortgagee
A lender to whom property is conveyed as security for the loan.
Mortgagor
One who borrows money giving as security a mortgage a deed of trust on real property.
Negative Amortization
Occurs when the monthly payments on the mortgage do not cover all of the interest cost. The interest cost that isn't covered is added to unpaid principal balance.
Origination Fee
The fee charged by a lender to prepare loan documents process underwrite make credit checks inspect and sometimes appraise a property.
PITI
Principal Interest Taxes and Insurance are the components of mortgage payments.
PMI Insurance
Private mortgage insurance enables borrowers to obtain a larger loan amount because the lender is protected against default.
Point
A dollar amount paid to a lender for making a loan. A point is one percent of the loan amount.
Power of Attorney
A legal document authorizing a person to act on behalf of another.
Prepaids
Necessary to create an escrow account or to adjust the seller's existing escrow account.
Prepayment
A privilege in a mortgage permitting a borrower to make payments in advance of their due date.
Prepayment penalty
Money charged for an early repayment of debt. Prepayment penalties are allowed in some form in 36 states and the District of Columbia.
Pre-qualification
Qualifying a borrower for a loan amount before looking for a home. Final approval subject to appraisal of the property.
Principal
The original blanace of money loaned excluding interest. Also the remaining balance of a loan excluding the interest.
Purchasing
Obtaining a home loan for the acquisition of property usually a home.
Rate
A percentage of the monthly mortgage payment that is paid to the lender.
Real Estate Broker
The seller of the house pays the real estate broker to attract potential buyers and help negotiate the contract between the seller and the buyer. The broker identifies available properties for buyers and shows them homes that meet their criteria.
Real Estate Settlement Procedures Act (RESPA)
Short for the Real Estate Settlement Procedures Act. RESPA is a federal law that in part allows consumers to review information on known or estimated settlement costs once after application and once prior to or at a settlement.
Realtor
A member of National Association of Realtors.
Refinance
Obtaining a new home loan on a property already owned.
RESPA
Real Estate Settlement Procedures Act. RESPA is a federal law which requires lenders to provide home mortgage borrowers with information about known or estimated settlement costs.
Second Mortgage
When one takes out a second mortgage to cash out equity in the home.
Second Trust
A mortgage that is made subsequent to another mortgage and subordinate to the first one.
Sellers Agent
Agents that help aid home buyers in finding a home that they can afford and will be satisfied with.
Servicer
After a home loan closes the loan servicer collects the payments manages escrow accounts pays escrowed taxes and insurance and manages delinquent payments. Lenders often "release" servicing to another business which means that a home buyer will not necessarily send house payments to the original lender. Settlement The closing of a home loan.
Stamp Duty
Government tax you have to pay on the purchase price of a property worth £60,000 or more.
Subprime Credit
Refers to less than perfect credit, or unsatisfactory payment history.
Title
The evidence of the right to or ownership in property.
Title Insurance
A policy usually issued by a title insurance company which insures a home buyer against errors in the title search (Owners Title Insurance). The cost of the policy is usually a function of the value of the property and is often borne by the purchaser and/or seller. Policies are also available to protect the lender's interests (Lenders Title Insurance).
Truth in Lending Act
AKA Regulation Z. A federal law requiring disclosure of the Annual Percentage Rate to home buyers shortly afterapplying for the loan.
Underwriter
He/she who performs the analysis of the risk involved in making a loan to a potential home buyer based on credit employment assets and other factors.
Unsecured Note
A loan that is not backed by collateral property.
VA Mortgages
If you are current in the United States military or if you have ever served in U.S. armed forces you may be eligible to get a loan insured by the Veterans Administration.
Variable Rate Mortgage (VRM)
Adjustable Rate Mortgage.
Verification of Employment
A document signed by a borrower's employer verifying his/her position and salary.
Wraparound Mortgage
Results when an existing assumable loan is combined with a new loan resulting in an interest rate somewhere between the old rate and the current market rate. The payments are made to a second lender or the previous homeowner who then forwards the payments to the first lender after taking their share.
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