|
Adjustable Rate Mortgage (ARM): |
Mortgage
loans under which the interest rate is
periodically adjusted to more closely coincide
are agreed to at the inception of the loan. |
| |
|
| Alternative
Documentation: |
The use of pay stubs,
W-2 forms, and bank statements in lieu of
Verifications of Employment (VOE) and
Verifications of Deposit (VOD) to qualify a
borrower for a mortgage. |
| |
|
| Amortization: |
The systematic and
continuous payment of an obligation through
installments until the debt has been paid in
full. |
| |
|
| Annual Percentage
Rate (APR): |
A term used in the
Truth-in-Lending Act to present the percentage
relationship of the total finance charge to the
amount of the loan. The APR reflects the cost of
the mortgage loan as a yearly rate. It could be
higher than the interest rate stated on the Note
because it includes, in addition to the interest
rate, loan discount points, miscellaneous fees
and mortgage insurance. |
| |
|
| Appraisal: |
A report made by a
qualified person setting forth an opinion or
estimate of property value. (Appraisal also
refers to the process through which a conclusion
on property value is derived.) |
| |
|
| Appraisal Amount or
Appraised Value: |
The fair market value
of a home determined by an independent
appraisal. The appraisal uses local real estate
market sales activity as a major basis for
valuation. |
| |
|
| Appreciation: |
An increase in the
value of a property due to market conditions or
other causes. The opposite is depreciation. |
| |
|
|
Balloon Mortgage: |
A fixed-rate mortgage
for a set number of years and then must be paid
off in full in a single "balloon" payment.
Balloon loans are popular with borrowers
expecting to sell or refinance their property
within a definite period of time. |
| |
|
| Bankruptcy: |
Legal relief from the
payment of all debts after the surrender of all
assets to a court-appointed trustee. Assets are
distributed to creditors as full satisfaction of
debts, with certain priorities and exemptions. A
person, firm or corporation may declare
bankruptcy under one of several chapters of the
U. S. Bankruptcy Code: Chapter 7 covers
liquidation of the debtor's assets; Chapter 11
covers reorganization of bankrupt businesses;
Chapter 13 covers payment of debts by
individuals through a bankruptcy plan. |
| |
|
|
Cap: |
The limit placed on
adjustments that can be made to the interest
rate or payments such as the annual cap on an
adjustable rate loan (ARM) or the cap on a rate
over the life of the loan. |
| |
|
| Cash-out Refinance: |
To refinance the
mortgage on a property for more than the
principal owed. This allows the borrower to get
cash from the equity in their home. Loan
products may vary on how much can be borrowed on
a cash-out refinance. |
| |
|
| Closing: |
Also known as
settlement, the finalization of the process of
purchasing or refinancing real estate. The
closing includes the delivery of a Deed, the
signing of Notes and the disbursement of funds |
| |
|
| Closing Costs: |
Costs that are due at
closing, in addition to the purchase price of
the property. These costs normally include, but
are not limited to, origination fee, discount
points, attorney's fees, costs for title
insurance, surveys, recording documents, and
prepayment of real estate taxes and insurance
premiums held by the lender. Sometimes the
seller will help the borrower pay some of these
costs. |
| |
|
| Closing Statement: |
An accounting of the
debits and credits incurred at closing. All FHA,
VA and Conventional financing loans use a
Uniform Closing or Settlement Statement commonly
referred to as the HUD-1. |
| |
|
| CMT: |
The Constant Maturity
Treasury (CMT) is published by the Federal
Reserve Board based on the average yield of a
variety of Treasury securities adjusted to a
one-year maturity. The CMT is offered as an
index for setting rates on adjustable rate
mortgage programs. |
| |
|
| Co-Borrower: |
A party who signs the
mortgage note along with the primary borrower,
and who also shares title to the subject real
estate. |
| |
|
| Collateral: |
Property pledged as
security for a debt. For example, real estate
that secures a mortgage. Collateral can be
repossessed if the loan is not repaid. |
| |
|
| Combined Loan To
Value (CLTV): |
The mathematical
relationship between the total of all loan
amounts (first mortgage plus subordinate liens)
and the value of the subject property. |
| |
|
| Community
Reinvestment Act (CRA): |
This act requires
financial institutions to meet the credit needs
of their community, including low and
moderate-income sections of the local community.
It also requires banks to make reports
concerning their investment in the areas where
they do business. |
| |
|
| Condominium: |
A form of property
ownership in which the homeowner holds title to
an individual dwelling unit, an undivided
interest in common areas of a multi-unit
project, and sometimes the exclusive use of
certain limited common areas. All condominiums
must meet certain investor requirements. |
| |
|
| Conforming Loan: |
A loan with a mortgage
amount that does not exceed that which is
eligible for purchase by FNMA or FHLMC. All
loans are considered either as conforming or
non-conforming, also known as jumbo. |
| |
|
| Conventional Loan: |
A mortgage loan not
insured or guaranteed by the federal government. |
| |
|
| Conversion Option: |
Options to convert an
adjustable rate mortgage or balloon loan to a
fixed rate mortgage under specified conditions. |
| |
|
| Co-Signer: |
A party who signs the
mortgage note along with the borrower, but who
does not own or have any interest in the title
to the property. |
| |
|
| Creditor: |
A person to whom debt
is owed by another person who is the "debtor". |
| |
|
| Credit Rating: |
A rating given a
person or company to establish credit-worthiness
based upon present financial condition,
experience and past credit history. |
| |
|
| Credit Report: |
A document completed
by a credit-reporting agency providing
information about the buyer's credit cards,
previous mortgage history, bank loans and public
records dealing with financial matters. |
| |
|
|
Deal Structure: |
An Underwriters review
of certain aspects of a loan application that do
not meet standard guidelines. |
| |
|
| Debt to Income
Ratio: |
Compares the amount of
monthly income to the amount the borrower will
owe each month in house payment (PITI) plus
other debts. The other debts may include but not
limited to car payment, credit cards, alimony,
child support, and personal loans. This ratio is
commonly used to see if the borrower has the
capacity to repay the debt. |
| |
|
| Deed of Trust:
|
A legal document that
conveys title to real estate to a disinterested
third party (trustee) who holds the title until
the owner of the property has repaid the debt.
In states where it is used, a Deed of Trust
accomplishes essentially the same purpose as a
Mortgage. |
| |
|
| Default: |
Failure to comply with
the terms of any agreement. In real estate,
generally used in connection with a mortgage
obligation to refer to the failure to comply
with the terms of the Promissory Note. Most
often this default is a failure to make
payments, however, there are other means by
which a borrower may default, such as the
failure to pay real estate taxes. |
| |
|
| Depreciation: |
A decline in the value
of property. The opposite of appreciation. |
| |
|
| Discount Points: |
A percentage of the
loan amount which is charged or credited by the
lender upon making a mortgage loan. Loans that
are made at the present market rate, with no
points, are considered to be made at "par."
Because of the lender's ability to charge or
credit points on an individual loan, the lender
is able to tailor a loan program and interest
rate to fit the needs of each individual
borrower. Discount points can be negotiated in
the Purchase Contract to be paid by either the
seller or the borrower.
Each point equals 1% of
the mortgage loan. For example, a charge of 1
point on a $50,000 loan would result in a charge
of $500; 1/2 point would be $250 ($50,000 x
.50%). |
| |
|
|
Down Payment: |
The part of the purchase
price which the buyer pays in cash and does not
finance with a mortgage. |
| |
|
|
Earnest Money: |
Deposit made by a
purchaser of real estate as evidence of good
faith. |
| |
|
| Equal Credit
Opportunity Act (ECOA): |
Also known as
Regulation B. A federal law that prohibits a
lender from discriminating in mortgage lending
on the basis of race, color, religion, national
origin, sex, marital status, age, income derived
from public assistance programs, or previous
exercise of Consumer Credit Protection Act
rights. |
| |
|
| Equity: |
The difference between
the current market value of a property and the
principal balance of all outstanding loans. |
| |
|
| Escrow Account: |
An account held by the
lending institution to which the borrower pays
monthly installments for property taxes,
insurance, and special assessments, and from
which the lender disburses these sums as they
become due. |
| |
|
|
Fair Credit Reporting
Act: |
Regulated the collection
and distribution of information by the consumer
credit reporting industry. It also affects how
financial institutions collect and convey credit
information about loan applicants or borrowers.
|
| |
|
| Fair Housing Act: |
Prohibits the denial
or variance of the terms of real estate related
transactions based on race, color, religion,
sex, national origin, disability, or familiar
status of the credit applicant. Real estate
related transactions include a mortgage, home
improvement, or other loans secured by a
dwelling. |
| |
|
|
Federal Home Loan
Mortgage Corporation (FHLMC): |
Also known as Freddie Mac.
A publicly owned corporation created by Congress
to support the secondary mortgage market. It
purchases and sells conventional residential
mortgages as well as residential mortgages
insured by the Federal Housing Administration
(FHA) or guaranteed by the Veterans
Administration (VA). |
| |
|
| Federal National
Mortgage Association (FNMA): |
Also known as Fannie
Mae. A privately owned corporation to support
the secondary mortgage market. It adds liquidity
to the mortgage market by investing in home
loans through the country. |
| |
|
| FICO Score: |
A credit score given
to a person that establishes creditworthiness
based on present financial condition, experience
and past credit history. |
| |
|
| Finance Charge:
|
The cost of credit as
a dollar amount (i.e. total amount of interest
and specific other loan charges to be paid over
the term of the loan and other loan charges to
be paid by the borrower at closing). Loan
charges include origination fees, discount
points, mortgage insurance, and other applicable
charges. If the seller pays any of these
charges, they cannot be included in the finance
charge. |
| |
|
| Financial
Statement: |
A summary of facts
showing an individual's or company's financial
condition. For individuals, it states their
assets and liabilities as of a given date. For a
company it should include a Profit and Loss
Statement (P&L) for a certain period of time and
balance sheet, stating assets and liabilities as
of a given date. |
|
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|
First Mortgage: |
A real estate loan that
creates a primary lien against real property. |
|
|
|
|
First Rate Adjustment
-- First rate adjustment after: |
In association with an
Adjustable Rate Mortgage loan, this is the
number of months after which the loan has closed
when the first interest rate adjustment will
occur. |
|
|
|
|
First Rate Adjustment
-- Maximum rate decrease: |
In association with an
Adjustable Rate Mortgage loan, this is the most
the interest rate can decrease during the first
adjustment period. |
|
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|
|
First Rate Adjustment
-- Maximum rate increase: |
In association with an
Adjustable Rate Mortgage loan, this is the most
the interest rate can increase during the first
adjustment period. |
|
|
|
|
Fixed Rate Mortgage: |
The type of loan where the
interest rate will not change for the entire
term of the loan. |
|
|
|
Floating: |
The term used when a
purchaser elects not to lock-in an interest rate
at the time of application. |
|
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|
Flood Insurance: |
Insurance that compensates
for direct physical damages by or from flood to
the insured property subject to the terms,
provisions, conditions and losses not covered
provision of the policy. It is required for
mortgages on properties located in federally
designated flood areas. |
|
|
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|
Good Faith Estimate
(GFE): |
An estimate of settlement
charges paid by the borrower at closing. The
Real Estate Settlement Procedures Act (RESPA)
requires a Good Faith Estimate of settlement
charges be provided to the borrower. |
|
|
|
|
Gift Letter: |
A letter or affidavit that
indicates that part of a borrower's down payment
is supplied by relatives or friends in the form
of a gift and that the gift does not have to be
repaid. |
|
|
|
Gross Income: |
A person's income before
deduction for income taxation. |
|
|
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|
Hazard Insurance:
|
Insurance against losses
caused by perils which are commonly covered in
policies described as a "Homeowner Policy". |
|
|
|
|
Home Maintenance: |
Costs associated with
maintaining a home. This may include, but not
limited to, general repairs, replacement or
repair of furnace, air conditioning, roof,
plumbing and electrical systems. |
|
|
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|
Home Mortgage
Disclosure Act (HMDA): |
Also known as Regulation
C. The purpose of HMDA is to provide disclosure
of mortgage lending application activity (home
purchase or improvement) to regulators and the
public. Information is collected on each
application, and is recorded on a log that is
compiled to produce a report on application
activity by geographic designation (census
tract). |
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|
Homeowners Association
(HOA): |
A non-profit corporation
or association that manages common areas and
services of a Condominium or Planned Unit
Development (PUD). |
|
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|
Homeowners Insurance: |
Insurance that covers
damage to the insureds' residence and liability
claims made against the insured subject to the
policy terms, conditions, provisions, losses not
insured provision and exclusions. |
|
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|
|
Housing Expense Ratio: |
Ratio used to determine
the borrowers capacity to repay a home loan. The
ratio compares monthly income to the house
payment (Principal, Interest, Taxes and
Insurance). |
|
|
|
|
Index: |
In connection with ARM
loans, the external measurement used by a Lender
to determine future changes which are to occur
to an adjustable loan program. These will
typically be published rates that are
independent of the Lender's control, such as a
Treasury Bill. |
|
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|
Initial Interest Rate: |
The beginning interest
rate at the start of an adjustable rate mortgage
(ARM). It may be lower than the fully indexed
rate or "going market rate" and it will remain
constant until it is adjusted up or down on the
adjustment date. |
|
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|
Interest: |
- The amount paid by
a borrower to a lender for the use of the
lender's money for a certain period of time.
- The amount paid by
a bank on some deposit accounts.
|
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|
Interest Income: |
The potential income from
funds which would have been used for the down
payment, closing costs, and any difference
(increase) between monthly rental payment and
monthly mortgage payment. |
|
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|
Interest Rate: |
The percentage of an
amount of money that is paid for its use for a
specific time; usually expressed as an annual
percentage. |
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|
Judgment: |
Decree of a court
declaring that one individual is indebted to
another and fixing the amount of such
indebtedness. |
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|
|
Jumbo Loan: |
A loan above the limit set
by the Federal National Mortgage Association
(Fannie Mae) and the Federal Home Loan Mortgage
Corporation (Freddie Mac). Also referred to as a
non-conforming loan. |
|
|
|
|
Late Charge:
|
An additional charge a
borrower is required to pay as a penalty for
failure to pay a regular mortgage loan
installment when due; a penalty for a delinquent
payment. |
| |
|
| LIBOR: |
LIBOR is
an abbreviation for the "London Interbank
Offered Rate," and is the interest rate offered
by a specific group of London banks for U.S.
dollar deposits of a stated maturity. LIBOR is
used as a base index for setting rates of some
adjustable rate financial instruments, including
Interest only loans and other adjustable rate
mortgage programs. |
|
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|
Lien: |
A legal claim against a
property that must be paid off when the property
is sold. A lien is created when you borrow money
and use your home as collateral for the loan. |
|
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|
|
Life of Loan -- Maximum
rate decrease: |
In association with an
Adjustable Rate Mortgage loan, this is the most
the interest can decrease over the life of the
mortgage loan. |
|
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|
|
Life of Loan -- Maximum
rate increase: |
In association with an
Adjustable Rate Mortgage loan, this is the most
the interest can increase over the life of the
mortgage loan. |
|
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|
Loan Application: |
A source of information on
which the lender bases a decision to make or not
make a loan; defines the terms of the loan
contract, gives the names of the borrower(s),
place of employment, salary, bank accounts,
credit references, real estate owned, and
describes the property to be mortgaged. |
|
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|
Loan Balance: |
The amount of remaining
unpaid principal balance owed by the borrower. |
|
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|
Loan Term: |
Number of years a loan is
amortized. Mortgage loan terms are generally 15,
20, or 30 years. |
|
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|
Loan-to-Value (LTV): |
The ratio of the total
amount borrowed on a mortgage against a
property, compared to the appraised value of the
property. A LTV ratio of 90 means that the
borrower is borrowing 90% of the value of the
property and paying 10% as a down payment. For
purchases, the value of the property is the
lesser of the purchase price or the appraised
value. For refinances the value is determined by
an appraisal. |
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|
|
Loan-to-Value Ratio: |
The ratio, expressed as a
percentage, of the amount of the loan
(numerator) to the value or selling price of
real property (denominator). For example, if you
have an $80,000 1st mortgage on a home with an
appraised value of $100,000, the LTV is 80%
($80,000 / $100,000 = 80%). |
|
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|
Lock-In: |
A written agreement
between the lender and borrower for a specified
period of time in which the lender will hold a
specific interest rate, origination and/or
discount point(s). |
|
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|
|
Margin: |
Under the terms of an
adjustable rate mortgage (ARM), the margin is a
set adjustment to the index. The particular loan
product determines the amount of the margin. |
|
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|
|
Median Income: |
The middle income level.
Half of the incomes would be higher than the
median income and half of the incomes would be
below the median income. This is not to be
confused with an average income. |
|
|
|
|
Mortgage: |
The written instrument
used to pledge a title to real estate as
security for repayment of a Promissory Note. |
|
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|
Mortgage Insurance: |
Insurance written in
connection with a mortgage loan that indemnifies
the lender in the event of borrower default. In
connection with conventional loan transactions,
this insurance is commonly referred to as
Private Mortgage Insurance (PMI). |
|
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|
Mortgage Note: |
A written promise to pay a
sum of money at a stated interest rate during a
specified term. It is typically secured by a
mortgage. |
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|
Mortgage Servicing: |
Controlling the necessary
duties of a mortgagee, such as collecting
payments, releasing the lien upon payment in
full, foreclosing if in default, and making sure
the taxes are paid, insurance is in force, etc.
The lender or a company acting for the lender,
for a servicing fee, may do servicing. (Also
called Loan Servicing.) |
|
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|
Mortgagee: |
The institution, group, or
individual that lends money on the security of
pledged real estate; the association, the
lender. |
|
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|
Mortgagee Clause: |
This is the clause that is
typically used for hazard insurance and flood
insurance. For loans originated by the State
Farm Bank® it will read: State Farm Bank,
F.S.B., Its Successor and/or Assigns, P.O. Box
2583, Ft. Wayne, IN 46801-2583. |
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|
Mortgagor: |
The owner of real estate
who pledges his property as security for the
repayment of a debt; the borrower. |
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Net Income: |
The difference between
effective gross income and expense including
taxes and insurance. The term is qualified as
net income before depreciation and debt. |
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|
Non-Conforming: |
A loan with a mortgage
amount that exceeds that which is eligible for
purchase by FNMA or FHLMC. All other loans above
this amount are considered to be non-conforming
or jumbo loans. |
|
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|
Non-Owner-Occupied
Property: |
Property purchased by a
borrower not for a primary residence but as an
investment with the intent of generating rental
income, tax benefits, and profitable resale. |
|
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|
|
Note: |
A written promise by one
party to pay a specific sum of money to a second
party under conditions agreed upon mutually.
Also called "promissory note." |
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|
Note Rate: |
The interest rate on the
mortgage loan. |
|
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|
Origination Fee: |
A fee paid to a lender for
processing a loan application; it is stated as a
percentage of the mortgage amount. |
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|
Origination Process: |
Process in which a lender
solicits business, gathers required information
and commits to loan money, for the purchase of
real estate. |
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|
Owner-Occupied
Property: |
The borrower or a member
of the immediate family lives in the property as
a primary residence. |
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|
PITI: |
Term commonly used to
refer to a mortgage loan payment. Acronym stands
for Principal, Interest, Taxes, and Insurance. |
|
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|
PITI Ratio: |
Compares the amount of the
monthly income to the amount the borrower will
owe each month in principal, interest, real
estate tax and insurance on a mortgage. Lenders
use it in deciding whether to give the borrower
a loan. Also called "income-to-debt" ratio. |
|
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|
Planned Unit
Development (PUD): |
A housing project that may
consist of any combination of homes (one-family
to four-family), condominiums, and various other
styles. In a PUD, often the individual unit and
the land upon which it sits are owned by the
unit/homeowner; however, the homeowner's
association owns common facilities. |
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Pre-Approval: |
A process in which a
customer provides appropriate information on
income, debts and assets that will be used to
make a credit only loan decision. The customer
typically has not identified a property to be
purchased, however, a specific sales price and
loan amount are used to make a loan decision.
(The sales price and loan amount are based on
customer assumptions) |
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|
Pre-Qualification: |
A process designed to
assist a customer in determining a maximum sales
price, loan amount and PITI payment they are
qualified for. A pre-qualification is not
considered a loan approval. A customer would
provide basic information (income, debts,
assets) to be used to determine the maximum
sales price, etc. |
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|
Prepaid Expenses or
Prepaids: |
The term used to describe
the funds the Lender requires to be deposited to
establish the escrow account for taxes and
insurance at the time of closing (also refers to
Prepaid Interest). |
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|
Prepaid Interest: |
Interest that the borrower
pays the lender before it becomes due. |
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|
Prepayment: |
A loan repayment made in
advance of its contractual due date. |
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|
Prepayment Penalty: |
A penalty under a Note,
Mortgage or Deed of Trust imposed when the loan
is paid before its maturity date. |
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|
Principal and Interest: |
Two components of a
monthly mortgage payment. Principal refers to
the portion of the monthly payment that reduces
the remaining balance for the mortgage. Interest
is the fee charged for borrowing money. |
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|
Principal Balance: |
The outstanding balance of
a mortgage, not counting interest. |
|
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|
Principal, Interest,
Real Estate Tax, Insurance Payment: |
The total mortgage payment
which includes principal, interest, taxes and
insurance. |
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|
Private Mortgage
Insurance (PMI): |
Insurance against a loss
by a lender in the event of default by a
borrower (mortgagor). A private insurance
company issues this insurance. The premium is
paid by the borrower and is included in the
mortgage payment. |
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|
Processing: |
Gathering the loan
application and all required supporting
documents (including the property appraisal,
credit report, credit history, and income and
expenses) so that a lender can consider the
borrower for a loan. |
|
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|
Promissory Note:
|
A document in which the
borrower promises to pay a stated amount on a
specific date. The note normally states the name
of the lender, the terms of payment and any
interest rate. |
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|
Property Taxes: |
Taxes assessed on real
estate. Property taxes are based on valuations
by local and or state governments. |
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Purchase Agreement: |
A written agreement
between a buyer and seller of real property,
that states the price and terms of the sale. |
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Purchase Price: |
The total amount paid for
a home. |
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|
Qualifying Income
Ratios: |
Income analysis used by
lenders in deciding whether to offer the
borrower a loan. One type of analysis compares
only the amount of the proposed monthly mortgage
payment to the monthly income. Another compares
the amount of the total monthly payments (for
example car, credit card and proposed mortgage
payments) to the monthly income. |
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|
Rate Index: |
An index used to adjust
the interest rate of an adjustable mortgage
loan. |
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|
Real Estate
Appreciation Rate: |
Percentage increase in the
value of real estate, expressed at an annual
rate. |
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Real Estate Settlement
Procedures Act (RESPA): |
A consumer protection law
that requires, among other things, lenders to
give borrowers advance notice of closing costs. |
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Realtor: |
A person licensed to
negotiate and transact the sale of real estate
on behalf of the property owner. A real estate
broker or associate must hold active membership
in a real estate board affiliated with the
National Association of Realtors. |
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Recording Fee: |
The amount paid to the
recorder's office in order to make a document a
matter of public record. |
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Regulation Z: |
Federal Reserve regulation
issued under the Truth-in-Lending Act, which,
among other things, requires that a credit
purchaser be advised in writing of all costs
connected with the credit portion of the loan. |
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Rental Payment: |
A payment made to use
another's property. The amount of the rent is
determined in a contract and is typically paid
monthly. |
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Renters Insurance: |
Insurance against perils
which are commonly covered in policies described
as a "Renters Policy". |
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Repayment: |
The payment of a mortgage
loan over a period of time established when the
loan is originated. |
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Rescind: |
To avoid or cancel in such
a way as to treat the contract or other object
of the rescission as if it never existed. |
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Sales Contract: |
A written agreement
between parties stating all terms and conditions
of a sale. |
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Savings Rate: |
The interest rate a person
expects to earn on a savings account or
investment account. |
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Secondary Market: |
An informal market where
existing mortgages are bought and sold. It is
the traditional aftermarket for mortgage loans
that brings together lenders that sell mortgages
with lenders, investors and agencies that buy
mortgages. |
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Seller Contribution: |
The seller may be paying
some or all of the borrower's cost. The amount
of the contribution has limitations.
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Selling Costs: |
The costs incurred in
selling a home. This could include Realtor
expenses and other miscellaneous expenses such
as painting or minor repairs to prepare the home
for sale. |
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Servicing: |
All the management and
operational procedures that the mortgage company
handles for the life of the loan, up through
foreclosure if necessary, including: collecting
the mortgage payments, ensuring that the taxes
and insurance charges are paid promptly, and
sending an annual report on the mortgage and
escrow accounts. |
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Servicing Released: |
A stipulation in the
agreement for the sale of mortgages in which the
Lender is not responsible for servicing the
loan. |
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Servicing Retained: |
A loan sale in which the
original lender's servicing department continues
to service the loan after the sale to a
secondary institution or investor. |
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Settlement Statement:
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Also referred to as a
HUD-1 Settlement Statement. The complete
breakdown of costs involved in the real estate
transaction for both the seller and buyer. |
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Single-Family Attached
Home: |
A single-family dwelling
that is attached to other single-family
dwellings. |
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Single-Family Detached
Home: |
A freestanding dwelling
for a single family |
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Survey: |
A measurement of land,
prepared by a registered land surveyor, showing
the location of the land with reference to known
points, its dimensions and the location and
dimensions of any improvements. |
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Subordinate Financing: |
An additional lien against
the real estate securing borrowers first
mortgage. This lien takes second priority to the
first mortgage. |
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Subsequent Rate
Adjustment -- Maximum rate decrease: |
In association with an
Adjustable Rate Mortgage loan, this is the most
the interest rate can decrease when it is
scheduled for reevaluation and possible
adjustment. |
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Subsequent Rate
Adjustment -- Maximum rate increase: |
In association with an
Adjustable Rate Mortgage loan, this is the most
the interest rate can increase when it is
scheduled for reevaluation and possible
adjustment. |
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Subsequent Rate
Adjustment -- Next ARM Adjustment Date: |
In association with an
Adjustable Rate Mortgage loan, this is the date
scheduled for the next possible payment
adjustment. |
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Subsequent Rate
Adjustment -- Rate Change Frequency: |
In association with an
Adjustable Rate Mortgage loan, this is the
frequency in which possible adjustments may be
made to the interest rate amount for Adjustable
Rate Mortgages after the initial adjustment. |
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Tax Rates: |
Tax levied by the federal
government and some states based on a person's
income. Federal income tax rates vary depending
on a person's adjusted gross income. |
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Tax Savings: |
The amount saved on taxes
by itemizing deductions on income tax returns. |
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Title: |
The evidence to the right
to or ownership in property. In the case of real
estate, the documentary evidence of ownership is
the title deed, which specifies in whom the
legal state is vested and the history of
ownership and transfers. Title may be acquired
through purchase, inheritance, devise, gift or
through the foreclosure of a mortgage. |
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Title Insurance Policy: |
A contract by which the
insurer, usually a title company, indicates who
has legal title and agrees to pay the insured a
specific amount of any loss caused by clouds,
claims or defects of title to real estate, which
the insured has an interest as owner, mortgagee
or otherwise.
(a) Owner's Title Policy: Usually issued to the
landowner himself. The owner's title insurance
policy is bought and paid for only once and then
continues in force without any further payment.
Owner's Title Insurance policies are not
assignable.
(b) Mortgagee's Title Policy: Issued to the
mortgagee and terminates when the mortgage debt
is paid. In the event of foreclosure, or if the
mortgagee acquires title from the mortgagor in
lieu of foreclosure, the policy continues in
force, giving continued protection against any
defects of title which existed at, or prior to,
the date of the policy. |
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Treasury Bills: |
Interest bearing U.S.
Government obligations sold at a weekly sale.
The change in interest rates paid on these
obligations is frequently used as the Rate Index
for Adjustable Mortgage Loans. |
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Truth in Lending (TIL): |
The name given to the
federal statues and regulations (Regulation Z)
which are designed primarily to insure that
prospective Borrowers of credit received credit
and cost information before concluding a loan
transaction. |
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Underwriting (Mortgage
Loans): |
The process of evaluating
a loan application to determine the risk
involved for the lender. It involves an analysis
of the borrower's creditworthiness and the
quality of the property itself. |
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Verification of Deposit
(VOD): |
Form used in mortgage
lending to verify the deposits or assets of a
prospective borrower when monthly statements are
unavailable or unusable. |
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Verification of
Employment (VOE): |
Form used in mortgage
lending to verify the employment and income of a
prospective borrower when pay stubs and W2 forms
are unavailable or unusable. |
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Verification of
Mortgage (VOM): |
Form used in mortgage
lending to verify the existing mortgage balance,
monthly payments and late payments, if any. |
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Verification of Rent: |
Form used in mortgage
lending to verify monthly rents paid and late
payments, if any |
