| 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. |
| |
|
| Certified Mortgage Specialist (CMS): |
The Certified Mortgage Specialist is the professional
sales associate who communicates the needs of the agent and borrower to
the operation team. |
| |
|
| Client Coordinator (CC): |
The Client Coordinator sets the tone throughout the
application process and ensures that each customer is kept informed of
all needs and status through clear and concise communication. |
| |
|
| Closer: |
The person who coordinates the closing time with the
Client Coordinator and reviews and prepares the necessary closing
documents. |
| |
|
| 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.
|
| |
|
| 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. |
|
|
| 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. |
| |
|
| 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. |
|
|
| 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. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| 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). |
| |
|
| Homeowners Association (HOA): |
A non-profit corporation or
association that manages common areas and services of a Condominium or
Planned Unit Development (PUD). |
|
|
| 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. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| 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.
|
| |
|
| 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. |
|
|
| 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. |
| |
|
|
Judgment: |
Decree of a court declaring
that one individual is indebted to another and fixing the amount of such
indebtedness. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| Loan Balance: |
The amount of remaining
unpaid principal balance owed by the borrower. |
| |
|
| Loan Term: |
Number of years a loan is
amortized. Mortgage loan terms are generally 15, 20, or 30 years. |
| |
|
| 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. |
| |
|
| 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%). |
| |
|
| 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). |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| 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). |
| |
|
| 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. |
| |
|
| 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.) |
| |
|
| Mortgagee: |
The institution, group, or
individual that lends money on the security of pledged real estate; the
association, the lender. |
| |
|
| Mortgagee Clause: |
This is the clause that is
typically used for hazard insurance and flood insurance. For loans
originated by the State Farm BankŪ it will read: State Farm Bank, F.S.B.,
Its Successor and/or Assigns, P.O. Box 2583, Ft. Wayne, IN 46801-2583. |
| |
|
| Mortgagor: |
The owner of real estate who
pledges his property as security for the repayment of a debt; the
borrower. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| 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." |
| |
|
| Note Rate: |
The interest rate on the
mortgage loan. |
| |
|
|
Origination Fee: |
A fee paid to a lender for
processing a loan application; it is stated as a percentage of the
mortgage amount. |
| |
|
| Origination Process: |
Process in which a lender
solicits business, gathers required information and commits to loan
money, for the purchase of real estate. |
| |
|
| Owner-Occupied Property: |
The borrower or a member of
the immediate family lives in the property as a primary residence. |
| |
|
| PITI: |
Term commonly used to refer
to a mortgage loan payment. Acronym stands for Principal, Interest,
Taxes, and Insurance. |
| |
|
| 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. |
| |
|
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. |
| |
|
| 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) |
| |
|
| 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.
|
| |
|
| 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). |
| |
|
| Prepaid Interest: |
Interest that the borrower
pays the lender before it becomes due. |
| |
|
| Prepayment: |
A loan repayment made in
advance of its contractual due date. |
| |
|
| Prepayment Penalty: |
A penalty under a Note,
Mortgage or Deed of Trust imposed when the loan is paid before its
maturity date. |
| |
|
| 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. |
| |
|
| Principal Balance: |
The outstanding balance of a
mortgage, not counting interest. |
| |
|
| Principal, Interest, Real
Estate Tax, Insurance Payment: |
The total mortgage payment
which includes principal, interest, taxes and insurance. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| Property Taxes: |
Taxes assessed on real
estate. Property taxes are based on valuations by local and or state
governments. |
| |
|
| Purchase Agreement: |
A written agreement between a
buyer and seller of real property, that states the price and terms of
the sale. |
| |
|
| Purchase Price: |
The total amount paid for a
home. |
| |
|
|
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. |
| |
|
| Rate
Index: |
An index used to adjust the
interest rate of an adjustable mortgage loan. |
| |
|
| Real Estate Appreciation
Rate: |
Percentage increase in the
value of real estate, expressed at an annual rate. |
| |
|
| Real Estate Settlement
Procedures Act (RESPA): |
A consumer protection law
that requires, among other things, lenders to give borrowers advance
notice of closing costs. |
| |
|
| 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. |
| |
|
| Recording Fee: |
The amount paid to the
recorder's office in order to make a document a matter of public record. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| Renters Insurance: |
Insurance against perils
which are commonly covered in policies described as a "Renters Policy". |
| |
|
| Repayment: |
The payment of a mortgage
loan over a period of time established when the loan is originated. |
|
|
| 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. |
|
|
| Sales
Contract: |
A written agreement between
parties stating all terms and conditions of a sale. |
|
|
| Savings Rate: |
The interest rate a person
expects to earn on a savings account or investment account. |
|
|
| 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. |
|
|
| Seller Contribution: |
The seller may be paying some
or all of the borrower's cost. The amount of the contribution has
limitations. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| Servicing Released: |
A stipulation in the
agreement for the sale of mortgages in which the Lender is not
responsible for servicing the loan. |
| |
|
| 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. |
| |
|
| Settlement Statement:
|
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. |
| |
|
| Single-Family Attached
Home: |
A single-family dwelling that
is attached to other single-family dwellings. |
| |
|
| Single-Family Detached
Home: |
A freestanding dwelling for a
single family |
| |
|
| 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. |
| |
|
| Subordinate Financing: |
An additional lien against
the real estate securing borrowers first mortgage. This lien takes
second priority to the first mortgage. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| Subsequent Rate Adjustment
-- Next ARM Adjustment Date: |
In association with an
Adjustable Rate Mortgage loan, this is the date scheduled for the next
reevaluation and possible adjustment. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| Tax Savings: |
The amount saved on taxes by
itemizing deductions on income tax returns. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
| 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. |
| |
|
|
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. |
| |
|
|
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. |
| |
|
| 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. |
| |
|
| Verification of Mortgage (VOM): |
Form used in mortgage lending
to verify the existing mortgage balance, monthly payments and late
payments, if any. |
| |
|
| Verification of Rent: |
Form used in mortgage lending
to verify monthly rents paid and late payments, if any. |
