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A | B
| C | D | E | F
| G | H | I | J
| K | L | M | N
| O | P | Q | R
| S | T | U | V
| W | X | Y | Z
A
Acceleration Clause
A common provision of a mortgage or note providing the holder with the
right to demand that the entire outstanding balance is immediately due and
usually payable in the event of default.
Accrued Interest
Interest earned but not yet paid.
Adjustable Rate Mortgage Loans (ARM)
Loans with interest rates that are adjusted periodically based on changes
in a pre-selected index. As a result, the interest rate on your loan and
the monthly payment will rise and fall with increases and decreases in
overall interest rates. These mortgage loans must specify how their
interest rate changes, usually in terms of a relation to a national index
such as (but not always) Treasury bill rates. If interest rates rise, your
monthly payments will rise. An interest rate cap limits the amount by
which the interest rate can change; look for this feature when you
consider an ARM loan.
Adjustment Interval
On an ARM loan, the time between changes in the interest rate or
monthly payment.
Agreement of Sale
Contract signed by buyer and seller stating the terms and conditions under
which a property will be sold.
Alternative Documentation
A method of documenting a loan file that relies on information the
borrower is likely to be able to provide instead of waiting on
verification sent to third parties for confirmation of statements made in
the application.
Amortization
Repayment of a loan with periodic payments of both principal and interest
calculated to payoff the loan at the end of a fixed period of time.
Annual Membership or Maintenance Fees
An annual charge for having the line of credit available. Charged
regardless of whether or not the line is used.
Annual Percentage Rate (APR)
The cost of credit expressed as a yearly rate. The annual percentage rate
is often not the same as the interest rate. It is a percentage that
results from an equation considering the amount financed, the finance
charges, and the term of the loan.
Application
An initial statement of personal and financial information required to
apply for a loan.
Application Fee
Fee charged by a lender to cover the initial costs of processing a loan
application. The fee may include the cost of obtaining a property
appraisal, a credit report, and a lock-in fee or other closing costs
incurred during the process or the fee may be in addition to these
charges.
Appraisal
A written estimate of a property's current market value completed by an
impartial party with knowledge of real estate markets.
Appraisal Fee
A fee charged by a licensed, certified appraiser to render an opinionof
market value as of a specific date.
APR
See Annual Percentage Rate.
ARM
See Adjustable Rate Mortgage Loans.
Assignment
The transfer of ownership, rights, or interests in property by one person,
the assignor, to another, the assignee.
Assumption
A method of selling real estate where the buyer of the property agrees to
become responsible for the repayment of an existing loan on the property.
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B
Back-end Debt Ratio
This refers to the borrower's debt ratio and is calculated using a borrower’s total of monthly payments due on credit obligations divided by the borrower’s gross monthly income. It’s expressed as a percentage. See also
Debt Ratio.
Balloon Payment
A lump-sum payment that may be required when the plan ends.
Balloon Mortgage
Balloon mortgage loans are short-term fixed-rate loans with fixed monthly
payments for a set number of years followed by one large final balloon
payment ("the balloon") for all of the remainder of the
principal. Typically, the balloon payment may be due at the end of 5, 7,
or 10 years. Borrowers with balloon loans may have the right to refinance
the loan when the balloon payment is due, but the right to refinance is
not guaranteed.
Bankruptcy
A proceeding in a federal court to relieve certain debts of a person or a
business unable to pay its debts.
Bearer
The legal owner of a piece of property.
Bequest
A gift of personal property by will.
Blanket Mortgage
A mortgage that covers more than one parcel of real estate.
Bona Fide
In good faith.
Borrower (Mortgagor)
An individual who applies for and receives funds in the form of a loan and
is obligated to repay the loan in full under the terms of the loan.
Broker
An individual who brings buyers and sellers together and assists in
negotiating contracts for a client.
Buy-Down Mortgage
A mortgage loan with a below-market rate for a period of time.
Buyer's Market
Market conditions that favor buyers. With more sellers than buyers in the
market, sellers may be forced to make substantial price concessions.
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C
Call Option
A provision of a note which allows the lender to require repayment of the
loan in full before the end of the loan term. The option may be exercised
due to breach of the terms of the loan or at the discretion of the lender.
Caps (interest)
Consumer safeguards which limit the amount the interest rate on an
adjustable rate mortgage can change in an adjustment interval and/or over
the life of the loan. For example, if your per-period cap is 1% and your
current rate is 7%, then your newly adjusted rate must fall between 6% and
8% regardless of actual changes in the index.
Caps (payment)
Consumer safeguards which limit the amount monthly payments on an adjustable
rate mortgage may change. Since they do not limit the amount of
interest the lender is earning, these consumer safeguards may cause negative
amortization.
Cash-Out
Any cash received when you get a new loan that is larger than the
remaining balance of your current mortgage, based upon the equity you have
already built up in the house.
The cash-out amount is calculated by subtracting the sum of the old loan
and fees from the new mortgage loan.
For example, if your existing loan is $100,000, you might refinance it
with a loan of $120,000. After you pay off your current loan ($100,000)
and any loan-origination costs for the new loan (for example $2,000 in
points), you would be left with $18,000 cash-out.
Cash-out loans may not be available for all types of property.
Cashier's Check (or Bank Check)
A check whose payment is guaranteed because it was paid for in advance and
is drawn on the bank's account instead of the customer's.
Ceiling
The maximum allowable interest rate of an adjustable rate mortgage.
Certificate of Eligibility
Document issued by the Veterans Administration to qualified veterans which
verifies a veteran's eligibility for a VA Guaranteed Loan.
Obtainable through local VA office by submitting form DD-214 (Separation
Paper) and VA form 1880 (request for Certificate of Eligibility).
Certificate of Title
Written opinion of the status of title to a property, given by a title
company. This certificate does not offer the protection given by title
insurance.
Certificate of Veteran Status
FHA form filled out by the VA to establish a borrower's eligibility
for an FHA Vet loan. Obtainable through local VA office by submitting form
DD 214 (Separation Paper) with form26-8261a (request for certificate of
veteran status).
Chain of Title
The chronological order of conveyance of a property from the original
owner to the present owner.
Closing (or Settlement)
The settlement or closing is the conclusion of your real estate
transaction. It includes the delivery of your security instrument, signing
of your legal documents and the disbursement of the funds necessary to the
sale of your home or loan transaction (refinance).
Closing Costs
Costs for services that must be performed before your loan can be
initiated. Examples include title fees, recording fees, appraisal fee,
credit report fee, pest inspection, attorney's fees, and surveying fees.
COFI
See Cost of Funds Index
Collateral
Assets (such as your home) pledged as security for a debt.
Commission
Money paid to a real estate agent or broker for negotiating a real estate
or loan transaction.
Commitment
A promise to lend and a statement by the lender of the terms and
conditions under which a loan is made.
Comparables
An abbreviation for "comparable properties"; used for
comparative purposes in the appraisal process. Comparables are properties
like the property under consideration; they have reasonably the same size,
location, and amenities and have recently been sold. Comparables help the
appraiser determine the approximate fair market value of the subject
property.
Comparative Market Analysis
An informal estimate of market value that a real estate agent or broker
calculates based on sales of comparable properties. An appraisal or a
comparative market analysis are the most accurate ways to determine what
your home is worth.
Compound Interest
Interest paid on the principal balance and on the accrued and unpaid
interest.
Condominium
A form of property ownership in which the homeowner holds title to an
individual dwelling unit and a proportionate interest in common areas and
facilities of a multi-unit project.
Conforming Loan
A mortgage loan which meets all requirements to be eligible for purchase
by federal agencies such as FNMA and FHLMC. The maximum conforming
loan amount is $300,700 for a one-unit Property in California.
Consumer
Reporting Agency
A company which regularly gathers, files and sells information to
creditors to facilitate their decisions to extend credit.
Contingency
A condition which must be satisfied before a contract is legally binding.
Contract of Sale
The agreement between the buyer and seller on the purchase price, terms,
and conditions of a sale.
Conventional Loan
Loans that are not made under any government housing program; they are not
subject to the restrictions of government housing programs, such as loan
size limits.
Conversion Clause
A provision in some ARMs that allows you to change an ARM to a
fixed-rate loan, usually after the first adjustment period. The new fixed
rate will be set at current rates, and there may be a charge for the
conversion feature.
Convertible ARMs
A type of ARM loanwith the option to convert to a fixed-rate loan
during a given time period.
Conveyance
The document used to effect a transfer, such as a deed, or mortgage.
Cost of Funds Index (COFI)
An index of the weighted-average interest rate paid by savings
institutions for sources of funds, usually by members of the 11th Federal
Home Loan Bank District.
Credit Bureau
A credit bureau is a clearinghouse for credit history information. Credit
grantors provide the bureau with factual information on how their credit
customers pay their bills. The bureau regularly assembles this
information, along with public record information obtained from
courthouses around the country, into a "file" on each consumer.
Credit Report
A report detailing the credit history of a prospective borrower that's
used to help determine borrower creditworthiness.
Credit Score
A statistical method of assessing your creditworthiness. Your credit card
history; amount of outstanding debt; the type of credit you use; negative
information such as bankruptcies or late payments; collection accounts and
judgments; too little credit history and too many credit lines with the
maximum amount borrowed are all included in credit-scoring models to
determine your credit score.
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D
Debt Ratio (DR)
The percentage of the customers’ gross monthly income allocated to pay the monthly installments on their debt owing. See also
BACK-END and FRONT-END.
Deed
Legal document by which title to real property is transferred from one
owner to another. The deed contains a description of the property, and is
signed, witnessed, and delivered to the buyer at closing.
Deed of Trust
A legal document that conveys title to real property to a third party. The
third party holds title until the owner of the property has repaid the
debt in full.
Default
Failure to meet legal obligations in a contract, including failure to make
payments on a loan.
Delinquency
Failure to make payments as agreed in the loan agreement.
Discount Points (or Points)
Points are an up-front fee paid to the lender at the time that you get
your loan. Each point equals one percent of your total loan amount. Points
and interest rates are inherently connected: in general, the more points
you pay, the lower the interest rate you get. However, the more points you
pay, the more cash you need up front since points are paid in cash at
closing.
Down Payment
The amount of your home's purchase price you need to supply up front in
cash to get your loan. For conventional loans, you should strive for a
down payment that's at least 20% of your home's value, since lenders
generally do not require private mortgage insurance with a down payment of
at least 20% of your home's purchase price. (Note, however, that FHA and
VA loans have different policies regarding insurance.)
DR
An acronym for debt ratio. See DEBT RATIO.
Due-on-Sale Clause
Provision in a mortgage or deed of trust allowing the lender to demand
immediate payment of the loan balance upon sale of the property.
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E
Earnest Money
Deposit made by a buyer towards the down payment in evidence of good faith
when the purchase agreement is signed.
ECOA
See Equal Credit Opportunity Act.
Equifax
One of the three largest credit bureaus in the United States.
Equal Credit Opportunity Act (ECOA)
Federal law requiring creditors to make credit equally available without
discrimination based on race, color, religion, national origin, age, sex,
marital status or receipt of income from public assistance programs.
Equity
The difference between the current market value of a property and the
total debt obligations against the property. On a new mortgage loan, the
down payment represents the equity in the property.
Escrow
A transaction in which a third party acts as the agent for seller and
buyer, or for borrower and lender, in handling legal documents and
disbursement of funds.
Escrow Account
An account held by the lender to which the borrower pays monthly
installments, collected as part of the monthly mortgage payment, for
annual expenses such as taxes and insurance. The lender disburses escrow
account funds on behalf of the borrower when they become due. Also known
as Impound Account.
Escrow Agent
A person with fiduciary responsibility to the buyer and seller, or the
borrower and lender, to ensure that the terms of the purchase/sale or loan
are carried out.
Experian
One of the three largest credit bureaus in the United States.
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F
Fair, Isaac and Co.
The company that invented credit scoring software.
Fannie Mae
A common nickname for the Federal National Mortgage Association.
FDIC
See Federal Deposit Insurance Corporation.
Federal Deposit Insurance Corporation (FDIC)
Independent deposit insurance agency created by Congress to maintain
stability and public confidence in the nation's banking system.
Federal Home Loan Mortgage Corporation (FHLMC, or Freddie Mac)
This agency buys loans that are underwritten to its specific guidelines.
These guidelines are an industry standard for residential conventional
lending.
Federal Housing Administration (FHA)
A federal agency within the Department of Housing and Urban Development
(HUD), which insures residential mortgage loans made by private lenders
and sets standards for underwriting mortgage loans.
Federal National Mortgage Association (FNMA, or Fannie Mae)
This agency buys loans that are underwritten to its specific guidelines.
These guidelines are an industry standard for residential conventional
lending.
Federal Reserve
The 7-member Board of Governors that oversees Federal Reserve Banks,
establishes monetary policy (interest rates, credit, etc.), and monitors
the economic health of the country. It's members are appointed by the
President subject to Senate confirmation, and serve 14-year terms. Also
called the Fed.
Fee Simple
Absolute ownership of real property.
FHA
See Federal Housing Administration.
FHA Loans
Fixed- or adjustable-rate loans insured by the U.S. Department of Housing
and Urban Development. FHA loans are designed to make housing more
affordable, particularly for first-time homebuyers. FHA loans typically
permit borrowers to buy a home with a lower down payment than conventional
loans. With FHA insurance, eligible buyers can purchase a home with a down
payment as little as 3% of the appraised value or the purchase price,
whichever is lower. FHA borrowers typically are required to participate in
a face-to-face meeting with their lender or a government approved mortgage
counselor prior to closing on a new mortgage loan. The current FHA loan
limits vary depending on home type and home location. To find the most
recent limits for your home, consult the FHA
Maximum Mortgage Limits web page.
FHLMC
See Federal Home Loan Mortgage Corporation.
FICO
The most common credit-scoring model used by lenders, it is also known as
a Fair, Isaac score. Your FICO can range from 200 to 900. According to
this model, the higher your score, the less likely you are to default on
your loan.
First Mortgage
A mortgage which is in first lien position, taking priority over all other
liens. In the case of a foreclosure, the first mortgage will be repaid
before any other mortgages.
Fixed Rate
An interest rate which is fixed for the term of the loan.
Fixed-Rate Loans
Fixed-rate loans have interest rates that do not change over the life of
the loan. As a result, monthly payments for principal and interest are
also fixed for the life of the loan. Fixed-rate loans typically have
15-year or 30-year terms. With a fixed-rate loan, you will have
predictable monthly mortgage payments for as long as you have the loan.
Flood Insurance
Insurance that compensates for physical damage to a property by flood.
Typically not covered under standard hazard insurance.
FNMA
See Federal National Mortgage Association.
Forbearance
The act by the lender of refraining from taking legal action on a mortgage
loan that is delinquent.
Foreclosure (or Repossession)
Legal process by which a mortgaged property may be sold to pay off a
mortgage loan that is in default.
Freddie Mac
A common nickname for the Federal Home Loan Mortgage Corporation.
Front-End
Debt Ratio
This refers to the debt ratio calculation using only principal, interest, tax and insurance divided by gross monthly income. It’s expressed as a percentage. See also
DEBT RATIO.
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G
Good Faith Estimate
Written estimate of the settlement costs the borrower will likely have to
pay at closing. Under the Real Estate Settlement Procedures Act (RESPA),
the lender is required to provide this disclosure to the borrower within
three days of receiving a loan application.
Grace Period
Period of time during which a loan payment may be made after its due date
without incurring a late penalty. The grace period is specified as part of
the terms of the loan in the Note.
Gross Income
Total income before taxes or expenses are deducted.
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H
Hazard Insurance
Protects the insured against loss due to fire or other natural disaster in
exchange for a premium paid to the insurer.
Housing and Urban Development
See HUD.
HUD
Housing and Urban Development. A U.S. government agency established to
implement federal housing and community development programs; oversees the
Federal Housing Administration.
HUD-1 Uniform Settlement Statement
A standard form which itemizes the closing costs associated with
purchasing a home or refinancing a loan.
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I
Impound Account
An account held by the lender to which the borrower pays monthly
installments, collected as part of the monthly mortgage payment, for
annual expenses such as taxes and insurance. The lender disburses impound
account funds on behalf of the borrower when they become due. (Also known
as Escrow Account.)
Index
Most lenders generally tie adjustable rate mortgage loan (ARM) interest
rate changes to an "index." An index is a widely published rate
such as LIBOR, T-Bill, or 11th District Cost of Funds (COFI). Lenders use
these indices to establish the interest rates charged on mortgage loans.
For ARMs, a predetermined margin is added to the index to compute the
interest rate adjustment.
Initial Cap
Consumer safeguard which limits the amount the interest rate on an
adjustable rate mortgage can change during the first adjustment period.
See Caps.
Initial Rate
The rate charged during the first interval of an ARM loan.
Interest
Charge paid for borrowing money, calculated as a percentage of the
remaining balance of the amount borrowed.
Interest Rate
The annual rate of interest on the loan, expressed as a percentage of 100.
Interest Rate Cap
Consumer safeguards which limit the amount the interest rate on an ARM
loan can change in an adjustment interval and/or over the life of the
loan. For example, if your per-period cap is 1% and your current rate is
7%, then your newly adjusted rate must fall between 6% and 8% regardless
of actual changes in the index.
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J
Joint Liability
Liability shared among two or more people, each of whom is liable for the
full debt.
Joint Tenancy
A form of ownership of property giving each person equal interest in the
property, including rights of survivorship.
Jumbo Loan
A mortgage larger than the $300,700 limit set by the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation.
Junior Mortgage
A mortgage subordinate to the claim of a prior lien or mortgage. In the
case of a foreclosure, a senior mortgage or lien will be paid first.
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K
No K terms.
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L
Late Charge
Penalty paid by a borrower when a payment is made after the due date.
Lender
The bank, mortgage company, or mortgage broker offering the loan.
LIBOR (London Interbank Offered Rate)
The interest rate charged among banks in the foreign market for short-term
loans to one another. A common index for ARM loans.
Lien
A legal claim by one person on the property of another for security for
payment of a debt.
Lifetime (or Overall) Cap
Consumer safeguard which limits the amount the interest rate on an
adjustable rate mortgage loan (ARM) can change over the life of the
loan. See Caps.
Loan Application
An initial statement of personal and financial information required to
apply for a loan.
Loan Application Fee
Fee charged by a lender to cover the initial costs of processing a loan
application. The fee may include the cost of obtaining a property
appraisal, a credit report, and a lock-in fee or other closing costs
incurred during the process or the fee may be in addition to these
charges.
Loan Origination Fee
Fee charged by the lender.
Loan-to-Value Ratio (LTV)
The percentage of the loan amount to the appraised value (or the sales
price, whichever is less) of the property.
Lock or Lock-In
A lender's guarantee of an interest rate for a set period of time. The
time period is usually that between loan application approval and loan
closing. The lock-in protects you against rate increases during that time.
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M
Margin
The percentage difference between the index for a particular loan and the
interest rate charged. This is a number predetermined by the lender.
Minimum Payments
The minimum amount that you must pay (usually monthly) on your account.
Under some plans, the minimum payment may cover interest only; under
others, it may include both principal and interest.
Mortgage
A legal document by which real property is pledged as security for the
repayment of a loan.
Mortgage Banker
An individual or company that originates and/or services mortgage loans.
Mortgage Broker
An individual or company that arranges financing for borrowers.
Mortgage Insurance
Insurance to protect the lender in case you default on your loan. With
conventional loans, mortgage insurance is generally not required if you
make a down payment of at least 20% of the home's appraised value. (Note,
however, that FHA and VA loans have different insurance guidelines.)
Mortgage Loan
A loan for which real estate serves as collateral to provide for repayment
in case of default.
Mortgage Note
Legal document obligating a borrower to repay a loan at a stated interest
rate during a specified period of time. The agreement is secured by a
mortgage or deed of trust or other security instrument.
Mortgagee
The lender in a mortgage loan transaction.
Mortgagor
The borrower in a mortgage loan transaction.
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N
Negative Amortization
A loan payment schedule in which the outstanding principal balance of a
loan goes up rather than down because the payments do not cover the full
amount of interest due. The monthly shortfall in payment is added to the
unpaid principal balance of the loan.
Non-Assumption Clause
A statement in a mortgage contract forbidding the assumption of the
mortgage by another borrower without the prior approval of the lender.
Note
Legal document obligating a borrower to repay a loan at a stated interest
rate during a specified period of time. The agreement is secured by a
mortgage or deed of trust or other security instrument.
Notice of Default
Written notice to a borrower that a default has occurred and that legal
action may be taken.
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O
Origination Fee
Fee charged by a lender.
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P
Payment Cap
Consumer safeguards which limit the amount monthly payments on an
adjustable-rate mortgage may change. Since they do not limit the amount of
interest the lender is earning, they may cause negative amortization.
Per Diem Interest
Interest calculated per day. (Depending on the day of the month on which
closing takes place, you will have to pay interest from the date of
closing to the end of the month. Your first mortgage payment will probably
be due the first day of the following month.)
Periodic Cap
Consumer safeguard which limits the amount the interest rate on an
adjustable rate mortgage (ARM) can change in an adjustment interval. See Caps.
PITI
Abbreviation for Principal, Interest, Taxes and Insurance, the components
of a monthly mortgage payment.
Points (or Discount Points)
Points are an up-front fee paid to the lender at the time that you get
your loan. Each point equals one percent of your total loan amount. Points
and interest rates are inherently connected: in general, the more points
you pay, the lower the interest rate you get. However, the more points you
pay, the more cash you need up front since points are paid in cash at
closing.
Power of Attorney
Legal document authorizing one person to act on behalf of another.
Pre-approval
The process of determining how much money a prospective homebuyer or
refinancer will be eligible to borrow prior to application for a loan. A
pre-approval includes a preliminary screening of a borrower's credit
history. Information submitted during pre-approval is subject to
verification at application.
Prepaid Expenses
Taxes, insurance and assessments paid in advance of their due dates. These
expenses are included at closing.
Prepaid Interest
Interest that is paid in advance of when it is due. Typically charged to a
borrower at closing to cover interest on the loan between the closing date
and the first payment date.
Prepayment
Full or partial repayment of the principal before the contractual due
date.
Prepayment Penalty
Fee charged by a lender for a loan paid off in advance of the contractual
due date.
Pre-qualification
The process of determining how much money a prospective homebuyer will be
eligible to borrow prior to application for a loan. Information submitted
during pre-qualification is subject to verification at application.
Principal
The amount of debt, not counting interest, left on a loan.
Private Mortgage Insurance (PMI)
Insurance to protect the lender in case you default on your loan. With
conventional loans, mortgage insurance is generally not required if you
make a down payment of at least 20% of the home's purchase price. (Note,
however, that FHA and VA loans have different insurance guidelines.)
Purchase Agreement
Contract signed by buyer and seller stating the terms and conditions under
which a property will be sold.
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Q
Qualify/Underwriting
The analysis of a customer’s credit capacity and the loan’s collateral upon which a risk is given.
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R
Real Financing Cost
The real financing cost is a consumer-oriented rate that takes into
account the projected amount of time you tell us you will actually have
the loan, as well as the specific costs, fees, and potential rate changes
associated with it. The fees and costs are distributed over the time you
plan to be in the house, allowing you to do an apples-to-apples comparison
of a variety of loan types. The real financing cost is not the APR.
The APR assumes that you keep your loan for the entire term (e.g. 30 years
for a 30 year fixed loan) and includes only some of your loan fees. The
total financing cost takes into account all of your closing costs
associated with your loan and also how long you plan to be in your house.
Real Property
Land and any improvements permanently affixed to it, such as buildings.
Reconveyance
The transfer of property back to the owner when a mortgage loan is fully
repaid.
Recording
The act of entering documents concerning title to a property into the
public records.
Recording Fee
Money paid to an agent for entering the sale of a property into the public
records.
Refinancing
The process of paying off one loan with the proceeds from a new loan
secured by the same property.
RESPA
Real Estate Settlement Procedures Act. RESPA is a federal law that gives
consumers the right to review information about loan settlement costs. The
law gives you the right to review this information after you apply for a
loan, and again at loan settlement. The law only obliges lenders to
provide these settlement costs after application.
Right to Rescission
Under the provisions of the Truth-in-Lending Act, the borrower's right, on
certain kinds of loans, to cancel the loan within three days of signing a
mortgage.
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S
Sales Agreement
Contract signed by buyer and seller stating the terms and conditions under
which a property will be sold.
Second Mortgage
An additional mortgage placed on a property that has rights that are
subordinate to the first mortgage.
Security Interest
An interest that a lender takes in the borrower's property to ensure
repayment of a debt.
Settlement (or Closing)
The settlement or closing is the conclusion of your real estate
transaction. It includes the delivery of your security instrument, signing
of your legal documents and the disbursement of the funds necessary to the
sale of your home or loan transaction (refinance).
Settlement Costs
Also known as closing costs, these costs are for services that must be
performed before your loan can be initiated. Examples include title fees,
recording fees, appraisal fee, credit report fee, pest inspection,
attorney's fees, taxes, and surveying fees.
Settlement Cost (HUD guide)
HUD - published booklet that provides an overview of the lending process,
and that is given to consumers after completing loan application.
Simple Interest
Interest paid only on the original principal, not on the accrued interest.
Structural Improvements
A "Structural Improvement" is any permanent improvement made to
your property that is not strictly for decorating purposes. Examples
include: additions, new flooring, kitchen or bathroom upgrades, new
windows and central air. Swimming pools are considered structural
improvements only if they are in ground and your property is in a year
round warm weather climate.
Survey
A measurement of land, prepared by a licensed surveyor, showing a
property's boundaries, elevations, improvements, and relationship to
surrounding tracts.
Sweat Equity
Value added to a property in the form of labor or services of the owner
rather than cash.
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T
Tax Impound
Money paid to and held by a lender for annual tax payments.
Tax Lien
Claim against a property for unpaid taxes.
Tax Sale
Public sale of property by a government authority as a result of
non-payment of taxes.
Term
The period of time between the beginning loan date on the legal documents
and the date the entire balance of the loan is due.
Title
Document which gives evidence of ownership of a property. Also indicates
the rights of ownership and possession of the property.
Title Company
A company that insures title to property.
Title Insurance
Insurance which protects the lender (lender's policy) or the buyer
(owner's policy) against loss due to disputes over ownership of a
property.
Title Search
Examination of municipal records to ensure that the seller is the legal
owner of a property and that there are no liens or other claims against
the property.
Trade Lines
Trade lines are your different credit accounts listed on your credit
report.
Trans Union
One of the three largest credit bureaus in the United States.
Transfer Tax
Tax paid when title passes from one owner to another.
Truth-in-Lending Act
Federal law requiring written disclosure of the terms of a mortgage
(including the APR and other charges) by a lender to a borrower
after application. Also requires the right to rescission period.
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U
Underwriting
In mortgage lending, the process of determining the risks involved in a
particular loan and establishing suitable terms and conditions for the
loan.
Usury
Interest charged in excess of the legal rate established by law.
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V
VA Loans
Fixed-rate loans guaranteed by the U.S. Department of Veterans Affairs.
They are designed to make housing affordable for eligible U.S. veterans.
VA loans are available to veterans, reservists, active-duty personnel, and
surviving spouses of veterans with 100% entitlement. Eligible veterans may
be able to purchase a home with no down payment, no cash reserve, no
application fee, and lower closing costs than other financing options. The
maximum VA loan amount is currently $203,000.
Variable Rate Mortgage
See Adjustable Rate Mortgage.
Variable Rate
Interest rate that changes periodically in relation to an index.
Verification of Deposit (VOD)
Document signed by the borrower's bank or other financial institution
verifying the borrower's account balance and history.
Verification of Employment (VOE)
Document signed by the borrower's employer verifying the borrower's
position and salary.
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W
Waiver
Voluntary relinquishment or surrender of some right or privilege.
Walk-through
A final inspection of a home to check for problems that may need to be
corrected before closing.
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X
No X terms.
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Y
No Y terms.
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Z
Zoning Ordinances (or Zoning Regulations)
Local law establishing building codes and usage regulations for properties
in a specified area.
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Ca. Dept. of Real Estate, Real
Estate Broker: # 01807067  |
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