{"id":1219,"date":"2016-04-19T18:42:02","date_gmt":"2016-04-19T18:42:02","guid":{"rendered":"http:\/\/maximumlending.com\/new\/?page_id=1219"},"modified":"2022-02-13T01:59:42","modified_gmt":"2022-02-13T01:59:42","slug":"mortgage-glossary","status":"publish","type":"page","link":"https:\/\/maximumlending.com\/mortgage-glossary\/","title":{"rendered":"Mortgage Glossary"},"content":{"rendered":"\t\t
A<\/a>\u00a0|\u00a0B<\/a>\u00a0|\u00a0C<\/a>\u00a0|\u00a0D<\/a>\u00a0|\u00a0E<\/a>\u00a0|\u00a0F<\/a>\u00a0|\u00a0G<\/a>\u00a0|\u00a0H<\/a>\u00a0|\u00a0I<\/a>\u00a0|\u00a0J<\/a> | K<\/span> | L<\/a>\u00a0|\u00a0M<\/a>\u00a0|\u00a0N<\/a>\u00a0|\u00a0O<\/a>\u00a0|\u00a0P<\/a>\u00a0|\u00a0Q<\/a>\u00a0|\u00a0R<\/a>\u00a0|\u00a0S<\/a>\u00a0|\u00a0T<\/a>\u00a0|\u00a0U<\/a>\u00a0|\u00a0V<\/a>\u00a0|\u00a0W<\/a> | X | Y |\u00a0Z<\/a><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t Abandonment<\/strong><\/p> The voluntary surrender of property owned or leased. Abandonment does not relieve obligations associated with ownership or lease.<\/p> Abatement<\/strong> Abrogate<\/strong> Absolute Title<\/strong> Abstract Update<\/strong> Acceleration<\/strong> Acknowledgement<\/strong> Act of God<\/strong> Addendum<\/strong> Adjustable Rate Mortgage (ARM)<\/strong> Adjustments (In Appraisal)<\/strong> Adjustment Date<\/strong> Adjustment Interval<\/strong> Adjustment Period<\/strong> Affordability Analysis<\/strong> Agency<\/strong> Amortization<\/strong> Amortization Schedule<\/strong> Amortization Term<\/strong> Annual Percentage Rate (APR)<\/strong> Appraisal<\/strong> Appraised Value<\/strong> Appraiser<\/strong> Arm\u2019s Length Transaction<\/strong> Assessment<\/strong> Assignment<\/strong> Assumability<\/strong> Assumption<\/strong> Assumption Fee<\/strong> Attachment<\/strong> Attest<\/strong> Attorney\u2019s Opinion of Title<\/strong> Top Of Page<\/a><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t A<\/a>\u00a0|\u00a0B<\/a>\u00a0<\/strong>|\u00a0C<\/a>\u00a0|\u00a0D<\/a>\u00a0|\u00a0E<\/a>\u00a0|\u00a0F<\/a>\u00a0|\u00a0G<\/a>\u00a0|\u00a0H<\/a>\u00a0|\u00a0I<\/a>\u00a0|\u00a0J<\/a> | K<\/span> | L<\/a>\u00a0|\u00a0M<\/a>\u00a0|\u00a0N<\/a>\u00a0|\u00a0O<\/a>\u00a0|\u00a0P<\/a>\u00a0|\u00a0Q<\/a>\u00a0|\u00a0R<\/a>\u00a0|\u00a0S<\/a>\u00a0|\u00a0T<\/a>\u00a0|\u00a0U<\/a>\u00a0|\u00a0V<\/a>\u00a0|\u00a0W<\/a> | X | Y |\u00a0Z<\/a><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t Back End Ratio<\/strong> Bad Title<\/strong> Balloon Mortgage<\/strong> Balloon Payment<\/strong> Bankruptcy<\/strong> Basis Point<\/strong> Beneficiary<\/strong> Bill of Sale<\/strong> Biweekly Payment Mortgage<\/strong> Blanket Mortgage<\/strong> Blended Rate<\/strong> Bona Fide<\/strong> Borrower (Mortgagor)<\/strong> Bridge Loan<\/strong> Broker<\/strong> Buy-<\/strong>down<\/strong> Top Of Page<\/a><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t A<\/a>\u00a0|\u00a0B<\/a>\u00a0|\u00a0C<\/a><\/strong>\u00a0|\u00a0D<\/a>\u00a0|\u00a0E<\/a>\u00a0|\u00a0F<\/a>\u00a0|\u00a0G<\/a>\u00a0|\u00a0H<\/a>\u00a0|\u00a0I<\/a>\u00a0|\u00a0J<\/a> | K<\/span> | L<\/a>\u00a0|\u00a0M<\/a>\u00a0|\u00a0N<\/a>\u00a0|\u00a0O<\/a>\u00a0|\u00a0P<\/a>\u00a0|\u00a0Q<\/a>\u00a0|\u00a0R<\/a>\u00a0|\u00a0S<\/a>\u00a0|\u00a0T<\/a>\u00a0|\u00a0U<\/a>\u00a0|\u00a0V<\/a>\u00a0|\u00a0W<\/a> | X | Y |\u00a0Z<\/a><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t Cash Flow<\/strong><\/p> The amount of cash derived over a certain period of time from an income producing property. The cash flow should be large enough to pay the expenses of the income producing property (mortgage payment, maintenance, utilities, etc\u2026).<\/p> Caps (interest)<\/strong> Caps (payment)<\/strong> Ceiling<\/strong> Certificate of Eligibility<\/strong> Certificate of Reasonable Value (CRV)<\/strong> Certificate of Title<\/strong> Certificate of Veteran Status<\/strong> Chattel<\/strong> Change Frequency<\/strong> Clear Title<\/strong> Closing<\/strong> Closing Agent<\/strong> Closing Costs<\/strong> Cloud on Title<\/strong> Code of Ethics<\/strong> COFI<\/strong> Collateral<\/strong> Combined Loan to Value<\/strong> Commitment<\/strong> Conforming Loan<\/strong> Construction Loan<\/strong> Consumer Reporting Agency (or Bureau)<\/strong> Contract Sale or Deed<\/strong> Controlled Business Arrangements (CBA)<\/strong> Conventional Loan<\/strong> Conversion Clause<\/strong> Conveyance<\/strong> Covenant<\/strong> Credit Report<\/strong> Credit Repository<\/strong> Credit Risk Score<\/strong> Top Of Page<\/a><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t A<\/a>\u00a0|\u00a0B<\/a>\u00a0|\u00a0C<\/a>\u00a0|\u00a0D<\/strong><\/a>\u00a0|\u00a0E<\/a>\u00a0|\u00a0F<\/a>\u00a0|\u00a0G<\/a>\u00a0|\u00a0H<\/a>\u00a0|\u00a0I<\/a>\u00a0|\u00a0J<\/a> | K<\/span> | L<\/a>\u00a0|\u00a0M<\/a>\u00a0|\u00a0N<\/a>\u00a0|\u00a0O<\/a>\u00a0|\u00a0P<\/a>\u00a0|\u00a0Q<\/a>\u00a0|\u00a0R<\/a>\u00a0|\u00a0S<\/a>\u00a0|\u00a0T<\/a>\u00a0|\u00a0U<\/a>\u00a0|\u00a0V<\/a>\u00a0|\u00a0W<\/a> | X | Y |\u00a0Z<\/a><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t Debt-to-Income Ratio<\/strong> Decree<\/strong> Deed<\/strong> Deed of Trust<\/strong> Default<\/strong> Deferred Interest<\/strong> Delinquency<\/strong> Department of Veterans Affairs (VA)<\/strong>
A reduction in amount or intensity. Usually relates to a decrease in taxes or payments due.<\/p>
Abolish, withdraw, cancel.<\/p>
A title that is clear, without any liens or judgments.<\/p>
Making current an existing Abstract of Title.<\/p>
The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor (borrower), or by using the right vested in the Due on Sale Clause.<\/p>
A declaration by a person who has signed a document that such signature is a voluntary act, made before a duly authorized person.<\/p>
An unpreventable destructive occurrence of the natural world.<\/p>
Something added as an attachment to a contract.<\/p>
A mortgage in which the interest rate is adjusted periodically based on a pre-selected index. Also sometimes known as a renegotiable rate mortgage, variable rate mortgage or Canadian rollover mortgage.<\/p>
The dollar value added or subtracted from the sale price of a comparable property used to provide an indication of value of the subject property.<\/p>
The date that the interest rate changes on an adjustable rate mortgage (ARM).<\/p>
On an adjustable rate mortgage, the time between changes in the interest rate and\/or monthly payment, typically one, three or five years depending on the index.<\/p>
The period elapsing between adjustment dates for an adjustable rate mortgage (ARM).<\/p>
An analysis of a buyer\u2019s ability to afford the purchase of a home. Reviews income, liabilities, and available funds, and considers the type of mortgage you plan to use, the area where you want to purchase a home, and the closing costs that are likely.<\/p>
The legal relationship between a principal and his agent arising from a contract in which the principal engages the agent to perform certain acts on the behalf of the principal.<\/p>
Loan payment divided into equal periodic payments calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.<\/p>
A table that shows the periodic payments of interest and principal and the unpaid balance for each term, usually for each month of the term of the loan.<\/p>
The length of time required to amortize the mortgage loan expressed as a number of months. For example, 360 months is the amortization term for a 30-year fixed rate mortgage.<\/p>
The measurement of the full cost of a loan including interest and loan fees expressed as a yearly percentage rate. Because all lenders apply the same rules in calculating the annual percentage rate, it provides consumers with a good basis for comparing the cost of different loans.<\/p>
An estimate of the value of property made by a qualified professional called an \u201cappraiser.\u201d<\/p>
An opinion of a property\u2019s fair market value, based on an appraiser\u2019s knowledge, experience, and analysis of the property.<\/p>
One qualified to estimate the value of real property. (Usually a certified, general, residential, or licensed appraiser)<\/p>
A transaction among parties, each of whom acts in his or her best interest.<\/p>
A local tax levied against a property for a specific purpose, such as a sewer or street lights.<\/p>
The transfer of a mortgage from one person to another.<\/p>
An assumable mortgage can be transferred from the seller to the new buyer. Generally requires a credit review of the new borrower and lenders may charge a fee for the assumption. If a mortgage contains a due on sale clause, it may not be assumed by a new buyer.<\/p>
The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt, unlike a new mortgage where closing cost and new, probably higher, market rate interest charges will apply.<\/p>
The fee paid to a lender (usually by the purchaser of real property) when an assumption takes place.<\/p>
A legal seizure of property to force payment of a debt. An attachment creates a lien on property.<\/p>
To witness by observation and signature.<\/p>
A written statement by an attorney after examination of public records and or abstracts of title that in his or her judgment that the title to a particular property is good.<\/p>
One of several criteria used to qualify a loan. The back end ratio takes into consideration all current indebtedness.<\/p>
A condition where complete real estate ownership is impaired by unsettled claims and liens. Also called Cloud on Title.<\/p>
A loan which is amortized for a longer period than the term of the loan. Usually this refers to a thirty year amortization and a five or seven year term. At the end of the term of the loan, the remaining outstanding principal on the loan is due. This final payment is known as a balloon payment.<\/p>
The final lump sum paid at the maturity date of a balloon mortgage.<\/p>
The financial inability to pay one\u2019s debts when due and the debtor seeks relief through court action that may restructure the debts or erase the debt.<\/p>
One 100th of 1%.<\/p>
The person who receives or is to receive the benefits from a specific action or act.<\/p>
A written instrument given to pass Title of personal property from the seller to the buyer.<\/p>
A plan to reduce the debt every two weeks (instead of the standard monthly payment schedule). The 26 (or possibly 27) biweekly payments are each equal to one half of the monthly payment required if the loan were a standard 30-year fixed rate mortgage. The result for the borrower is a substantial savings in interest.<\/p>
A mortgage covering at least two pieces of real estate as security for the same mortgage.<\/p>
An interest rate applied to a refinanced loan that is higher than the old rate but lower than the new rate usually offered as an inducement. In a refinance with a simultaneous first and second mortgage an average of the first and second mortgage rates calculated with the percentage of each loan in relation to the total loan. (The average is not an average of the two rates only)<\/p>
In good faith, without fraud.<\/p>
One who applies for and receives a loan in the form of a mortgage with the intention of repaying the loan in full.<\/p>
A second trust that is collateralized by the borrower\u2019s present home allowing the proceeds to be used to close on a new house before the present home is sold. Also known as \u201cswing loan.\u201d<\/p>
An individual in the business of assisting in arranging funding or negotiating contracts for a client but who does not loan the money himself. Brokers usually charge a fee or receive a commission for their services.<\/p>
When the lender and\/or the home builder subsidized the mortgage to lower the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires.<\/p>
Consumer safeguards which limit the amount of change to the interest rate for an adjustable rate mortgage.<\/p>
Consumer safeguards which limit the amount of change to the monthly payments for an adjustable rate mortgage.<\/p>
The maximum allowable interest rate over the life of the loan of an adjustable rate mortgage.<\/p>
The document given to qualified veterans which entitles them to VA guaranteed loans for homes, business and mobile homes. Certificates of eligibility may be obtained by sending form DADA (Separation Paper) to the local VA office with VA form 1880 (Request for Certificate of Eligibility).<\/p>
An appraisal issued by the Veterans Administration showing the property\u2019s current market value.<\/p>
A statement provided by an abstract company, title company, or attorney stating that the title of real estate is legally held by the current owner.<\/p>
The document given to veterans or reservists who have served 90 days of continuous active duty (including training time). It may be obtained by sending DD 214 to the local VA office with form 26-8261a (Request for Certificate of Veteran Status). This document enables veterans to obtain lower down payments on certain FHA insured loans.<\/p>
Personal property. Anything owned other than real estate.<\/p>
The frequency (in months) of payment and\/or interest rate changes in an adjustable rate mortgage (ARM).<\/p>
A Marketable Title or one free of clouds.<\/p>
The meeting between the buyer, seller and lender or their agents where the property and funds legally change hands, also called settlement. Closing costs usually include an origination fee, discount points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. The cost of closing usually are about 3 percent to 6 percent of the mortgage amount.<\/p>
A third party who prepares the paperwork and conducts the closing or settlement.<\/p>
Expenses over and above the price of the property that are incurred by buyers and sellers when transferring ownership of a property. Closing costs normally include an origination fee, property taxes, charges for title insurance and escrow costs, appraisal fees, etc. Closing costs will vary according to the area country and the lenders used.<\/p>
An outstanding claim or encumbrance on the title.<\/p>
A statement of principles concerning behavior of those who subscribe to the code.<\/p>
An adjustable rate mortgage with a rate that adjusts based on a cost-of-funds index, often the 11th District Cost of Funds.<\/p>
Property pledged as security for a debt.<\/p>
The relationship between the unpaid principal balances of all the mortgages on a property and the properties appraised value or the loan amount whichever is less.<\/p>
A pledge or promise, a firm agreement.<\/p>
A loan that is eligible for purchase by FNMA or FHLMC.<\/p>
A short term interim loan to pay for the construction of buildings or homes. These are usually designed to provide periodic disbursements to the builder as he or she progresses.<\/p>
An organization that handles the preparation of reports used by lenders to determine a potential borrower\u2019s credit history. The agency gets data for these reports from a credit repository and other sources.<\/p>
A contract between purchaser and a seller of real estate to convey title after certain conditions have been met. It is a form of installment sale.<\/p>
A brokerage office that provides related services through subsidiary companies.<\/p>
A mortgage not insured by FHA or guaranteed by VA.<\/p>
A provision in an ARM allowing the loan to be converted to a fixed rate at some point during the term. Usually conversion is allowed at the end of the first adjustment period. The conversion feature may cost extra.<\/p>
The transfer of the Title of real estate from one to another.<\/p>
Promise written into Deeds and other instruments agreeing to performance or non?performance of certain acts or preventing certain uses of the property.<\/p>
A report documenting the credit history and current status of a borrower\u2019s credit standing.<\/p>
An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.<\/p>
A credit risk score is a statistical summary of the information contained in a consumer\u2019s credit report. The most well known type of credit risk score is the Fair Isaac or FICO score. This form of credit scoring is a mathematical summary calculation that assigns numerical values to various pieces of information in the credit report. The overall credit risk score is highly relative in the credit underwriting process for a mortgage loan.<\/p>
The ratio, expressed as a percentage, which results when a borrower\u2019s monthly payment obligation on long term debts is divided by his or her gross monthly income. See housing expenses-to-income ratio.<\/p>
An order issued by one in authority.<\/p>
A written instrument properly signed and delivered that conveys Title to real property.<\/p>
In many states, this document is used in place of a mortgage to secure the payment of a note.<\/p>
Failure to meet legal obligations in a contract, specifically, failure to make the monthly payments on a mortgage.<\/p>
When a mortgage is written with a monthly payment that is less than required to satisfy the note rate, the unpaid interest is deferred by adding it to the loan balance. See negative amortization.<\/p>
Failure to make payments on time. This can lead to foreclosure.<\/p>