| A adjustable-rate mortgage (ARM)
A mortgage that changes interest rate periodically based upon the
changes in a specified index.
adjustment date/period
The date on which the interest rate changes for an
adjustable-rate mortgage (ARM).
adjustment period
The period that elapses between the adjustment dates for an
adjustable-rate mortgage (ARM).
advertising
agency
Description
agents
amortization
The repayment of a mortgage loan by installments with regular payments
to cover the principal and interest.
amortization term
The amount of time required to amortize the mortgage loan. The
amortization term is expressed as a number of months. For example, for a
30-year fixed-rate mortgage, the amortization term is 360 months.
animal care & control center
annual percentage rate (APR)
The cost of a mortgage stated as a yearly rate; includes such items as
interest, mortgage insurance, and loan origination fee (points).
application
A form, commonly referred to as a 1003 form, used to apply for a
mortgage and to provide information regarding a prospective mortgagor
and the proposed security.
appraisal
A written analysis of the estimated value of a property prepared by a
qualified appraiser.
appraiser value
An opinion of value reached by an appraiser based upon study of
pertinent data.
appraiser (return to top)
A person qualified by education, training, and experience to estimate
the value of real property and personal property.
apr%
Annual Percentage Rate; the true cost of
borrowing money over the life of the loan.
appreciation
An increase in the value of a property due to changes in market
conditions or other causes. The opposite of depreciation.
Arizona
Law
Description - click hyper-link for more information.
assessed value
Value placed upon property for tax purposes by the tax assessor.
asset
Anything of monetary value that is owned by a person. Assets include
real property, personal property, and enforceable claims against others
(including bank accounts, stocks, mutual funds, and so on).
assignment
The transfer of a mortgage from one person to another.
assumable mortgage
A mortgage that can be taken over ("assumed") by the buyer when a home
is sold.
assumption
The transfer of the seller's existing mortgage to the buyer.
assumption clause
A provision in an assumable mortgage that allows a buyer to
assume responsibility for the mortgage from the seller. The loan does
not need to be paid in full by the original borrower upon sale or
transfer of the property.
assumption fee
The fee paid to a lender (usually by the purchaser of real property)
resulting from the assumption of an existing mortgage.
B
backup offer
balance sheet (return to top)
A financial statement that shows assets, liabilities, and net worth as
of a specific date.
balloon mortgage
A mortgage that has level monthly payments that will amortize it over a
stated term but that provides for a lump sum payment to be due at the
end of an earlier specified term.
balloon payment
The final lump sum payment that is made at the maturity date of a
balloon mortgage.
bankrupt
A person, firm, or corporation that, through a court proceeding, is
relieved from the payment of all debts after the surrender of all assets
to a court-appointed trustee.
bankruptcy
A proceeding in a federal court in which a debtor who owes more than his
or her assets can relieve the debts by transferring his or her assets to
a trustee.
before-tax income
Income before taxes are deducted.
beneficiary
The person designated to receive the income from a trust, estate, or a
deed of trust.
binder
A preliminary agreement, secured by the payment of an earnest money
deposit, under which a buyer offers to purchase real estate.
biweekly payment mortgage
A mortgage that requires payments 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
that would be required if the loan were a standard 30-year fixed-rate
mortgage, and they are usually drafted from the borrower's bank account.
The result for the borrower is a substantial savings in interest.
blanket mortgage
The mortgage that is secured by a cooperative project, as opposed to the
share loans on individual units within the project.
bond
An interest-bearing certificate of debt with a maturity date. An
obligation of a government or business corporation. A real estate bond
is a written obligation usually secured by a mortgage or a deed of
trust.
breach
A violation of any legal obligation.
bridge loan
A form of second trust that is collateralized by the borrower's present
home (which is usually for sale) in a manner that allows the proceeds to
be used for closing on a new house before the present home is sold. Also
known as "swing loan."
broker
A person who, for a commission or a fee, brings parties together and
assists in negotiating contracts between them.
buydown mortgage
A temporary buydown is a mortgage on which an initial lump sum payment
is made by any party to reduce a borrower's monthly payments during the
first few years of a mortgage. A permanent buydown reduces the interest
rate over the entire life of a mortgage.
buyer
buyer's broker
DESCRIPTION
buyer's market
DESCRIPTION
buying a
home
C
call option (return to top)
A provision in the mortgage that gives the mortgagee the right to call
the mortgage due and payable at the end of a specified period for
whatever reason.
cap
A provision of an adjustable-rate mortgage (ARM) that limits how much
the interest rate or mortgage payments may increase or decrease.
capital improvement
Any structure or component erected as a permanent improvement to real
property that adds to its value and useful life.
cash-out refinance
A refinance transaction in which the amount of money received from the
new loan exceeds the total of the money needed to repay the existing
first mortgage, closing costs, points, and the amount required to
satisfy any outstanding subordinate mortgage liens. In other words, a
refinance transaction in which the borrower receives additional cash
that can be used for any purpose.
CC&R's
Certificate of Eligibility
A document issued by the federal government certifying a veteran's
eligibility for a Department of Veterans Affairs (VA) mortgage.
Certificate of Reasonable Value (CRV)
A document issued by the Department of Veterans Affairs (VA) that
establishes the maximum value and loan amount for a VA mortgage.
certificate of title
A statement provided by an abstract company, title company, or attorney
stating that the title to real estate is legally held by the current
owner.
chain of title
The history of all of the documents that transfer title to a parcel of
real property, starting with the earliest existing document and ending
with the most recent.
change frequency
The frequency (in months) of payment and/or interest rate changes in an
adjustable-rate mortgage (ARM).
CLA - conditional loan approval
clear title
A title that is free of liens or legal questions as to ownership of the
property.
closing
A meeting at which a sale of a property is finalized by the buyer
signing the mortgage documents and paying closing costs. Also called
"settlement."
closing cost item (return to top)
A fee or amount that a home buyer must pay at closing for a single
service, tax, or product. Closing costs are made up of individual
closing cost items such as origination fees and attorney's fees. Many
closing cost items are included as numbered items on the HUD-1
statement.
closing costs
Expenses (over and above the price of the property) incurred by buyers
and sellers in transferring ownership of a property. Closing costs
normally include an origination fee, an attorney's fee, taxes, an amount
placed in escrow, and charges for obtaining title insurance and a
survey. Closing costs percentage will vary according to the area of the
country.
COE - close of escrow
closing statement
Also referred to as the HUD1. The final statement of costs incurred to
close on a loan or to purchase a home.
cloud on title
Any conditions revealed by a title search that adversely affect the
title to real estate. Usually clouds on title cannot be removed except
by a quitclaim deed, release, or court action.
CMA
collateral
An asset (such as a car or a home) that guarantees the repayment of a
loan. The borrower risks losing the asset if the loan is not repaid
according to the terms of the loan contract.
collection
The efforts used to bring a delinquent mortgage current and to file the
necessary notices to proceed with foreclosure when necessary.
co-maker
A person who signs a promissory note along with the borrower. A
co-maker's signature guarantees that the loan will be repaid, because
the borrower and the co-maker are equally responsible for the repayment.
See endorser.
commission
The fee charged by a broker or agent for negotiating a real estate or
loan transaction. A commission is generally a percentage of the price of
the property or loan.
commitment letter
A formal offer by a lender stating the terms under which it agrees to
lend money to a home buyer. Also known as a "loan commitment."
common areas
Those portions of a building, land, and amenities owned (or managed) by
a planned unit development (PUD) or condominium project's homeowners'
association (or a cooperative project's cooperative corporation) that
are used by all of the unit owners, who share in the common expenses of
their operation and maintenance. Common areas include swimming pools,
tennis courts, and other recreational facilities, as well as common
corridors of buildings, parking areas, means of ingress and egress, etc.
Community Home Improvement Mortgage Loan
An alternative financing option that allows low- and moderate-income
home buyers to obtain 95 percent financing for the purchase and
improvement of a home in need of modest repairs. The repair work can
account for as much as 30 percent of the appraised value.
community property (return to top)
In some western and southwestern states, a form of ownership under which
property acquired during a marriage is presumed to be owned jointly
unless acquired as separate property of either spouse.
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.
comparables market analysis
conditions
conditional loan approval
condominium
A real estate project in which each unit owner has title to a unit in a
building, an undivided interest in the common areas of the project, and
sometimes the exclusive use of certain limited common areas.
conforming loan
A conventional mortgage that conforms to the loan amounts and
underwriting guidelines used by the Federal National Mortgage
Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC).
Conventional mortgages are classified as non-conforming when loan
amounts are too large or the underwriting quidelines are unacceptable to
FNMA or FHLMC.
non-conforming loan
A conventional loan is considered non-conforming when the loan amount is
too large or underwriting practices are outside the guidelines
established by the Federal National Mortgage Association (FNMA) or the
Federal Home Loan Mortgage Corporation (FHLMC). A jumbo loan is a
non-conforming loan.
condominium conversion
Changing the ownership of an existing building (usually a rental
project) to the condominium form of ownership.
construction loan
A short-term, interim loan for financing the cost of construction. The
lender makes payments to the builder at periodic intervals as the work
progresses.
consultant
consumer reporting agency (or bureau)
An organization that prepares reports that are used by lenders to
determine a potential borrower's credit history. The agency obtains data
for these reports from a credit repository as well as from other
sources.
contingency
A condition that must be met before a contract is legally binding. For
example, home purchasers often include a contingency that specifies that
the contract is not binding until the purchaser obtains a satisfactory
home inspection report from a qualified home inspector.
contract
An oral or written agreement to do or not to do a certain thing.
conventional mortgage
A mortgage that is not insured or guaranteed by the federal government.
convertibility clause
A provision in some adjustable-rate mortgages (ARMs) that allows the
borrower to change the ARM to a fixed-rate mortgage at specified
timeframes after loan origination.
convertible ARM
An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate
mortgage under specified conditions.
cooperative (co-op)
A type of multiple ownership in which the residents of a multiunit
housing complex own shares in the cooperative corporation that owns the
property, giving each resident the right to occupy a specific apartment
or unit.
corporate relocation
Arrangements under which an employer moves an employee to another area
as part of the employer's normal course of business or under which it
transfers a substantial part or all of its operations and employees to
another area because it is relocating its headquarters or expanding its
office capacity.
cost of funds index (COFI)
An index that is used to determine interest rate changes for certain
adjustable-rate mortgage (ARM) plans. It represents the weighted-average
cost of savings, borrowings, and advances of the 11th District members
of the Federal Home Loan Bank of San Francisco.
counter offer
covenant
A clause in a mortgage that obligates or restricts the borrower and
that, if violated, can result in foreclosure.
covenants, conditions & restrictions
DESCRIPTION
credit
An agreement in which a borrower receives something of value in exchange
for a promise to repay the lender at a later date.
credit history (return to top)
A record of an individual's open and fully repaid debts. A credit
history helps a lender to determine whether a potential borrower has a
history of repaying debts in a timely manner.
credit report
A report of an individual's credit history prepared by a credit bureau
and used by a lender in determining a loan applicant's creditworthiness.
See merged credit report.
credit repository
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.
curb appeal
D
debt (return to top)
An amount owed to another.
deed
The legal document conveying title to a property.
deed-in-lieu
A deed given by a mortgagor to the mortgagee to satisfy a debt and avoid
foreclosure.
deed of trust
The document used in some states instead of a mortgage; title is
conveyed to a trustee.
default
Failure to make mortgage payments on a timely basis or to comply with
other requirements of a mortgage.
delinquency
Failure to make mortgage payments when mortgage payments are due.
deposit
A sum of money given to bind the sale of real estate, or a sum of money
given to ensure payment or an advance of funds in the processing of a
loan.
depreciation
A decline in the value of property; the opposite of appreciation.
direct mail
down payment
The part of the purchase price of a property that the buyer pays in cash
and does not finance with a mortgage.
due-on-sale provision
A provision in a mortgage that allows the lender to demand repayment in
full if the borrower sells the property that serves as security for the
mortgage.
E
earnest money deposit
A deposit made by the potential home buyer to show that he or she is
serious about buying the house.
easement
A right of way giving persons other than the owner access to or over a
property.
effective age
An appraiser's estimate of the physical condition of a building. The
actual age of a building may be shorter or longer than its effective
age.
effective gross income
Normal annual income including overtime that is regular or guaranteed.
The income may be from more than one source. Salary is generally the
principal source, but other income may qualify if it is significant and
stable.
email listings - active & sold listings can be sent via the
internet to view at your leisure in the privacy of your own home or
office.
encumbrance
Anything that affects or limits the fee simple title to a property, such
as mortgages, leases, easements, or restrictions.
endorser
A person who signs ownership interest over to another party. Contrast
with co-maker.
Equal Credit Opportunity Act (ECOA)
A federal law that requires lenders and other 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
A homeowner's financial interest in a property. Equity is the difference
between the fair market value of the property and the amount still owed
on its mortgage.
escrow
An item of value, money, or documents deposited with a third party to be
delivered upon the fulfillment of a condition. For example, the deposit
by a borrower with the lender of funds to pay taxes and insurance
premiums when they become due, or the deposit of funds or documents with
an attorney or escrow agent to be disbursed upon the closing of a sale
of real estate.
escrow account
The account in which a mortgage servicer holds the borrower's escrow
payments prior to paying property expenses.
escrow analysis
The periodic examination of escrow accounts to determine if current
monthly deposits will provide sufficient funds to pay taxes, insurance,
and other bills when due.
escrow collections (return to top)
Funds collected by the servicer and set aside in an escrow account to
pay the borrower's property taxes, mortgage insurance, and hazard
insurance.
escrow disbursements
The use of escrow funds to pay real estate taxes, hazard insurance,
mortgage insurance, and other property expenses as they become due.
escrow instructions
DESCRIPTION
escrow officer / agent
escrow payment
The portion of a mortgagor's monthly payment that is held by the
servicer to pay for taxes, hazard insurance, mortgage insurance, lease
payments, and other items as they become due. Known as "impounds" or
"reserves" in some states.
estate
The ownership interest of an individual in real property. The sum total
of all the real property and personal property owned by an individual at
time of death.
estoppel
DESCRIPTION
eviction
The lawful expulsion of an occupant from real property.
examination of title
The report on the title of a property from the public records or an
abstract of the title.
F
Fair Credit Reporting Act (return to top)
A consumer protection law that regulates the disclosure of consumer
credit reports by consumer/credit reporting agencies and establishes
procedures for correcting mistakes on one's credit record.
fair housing
fair market value
The highest price that a buyer, willing but not compelled to buy, would
pay, and the lowest a seller, willing but not compelled to sell, would
accept.
Fannie Mae
A congressionally chartered, shareholder-owned company that is the
nation's largest supplier of home mortgage funds.
Fannie Mae's Community Home Buyer's Program
An income-based community lending model, under which mortgage insurers
and Fannie Mae offer flexible underwriting guidelines to increase a low-
or moderate-income family's buying power and to decrease the total
amount of cash needed to purchase a home. Borrowers who participate in
this model are required to attend pre-purchase home-buyer education
sessions.
Federal Housing Administration (FHA)
An agency of the U.S. Department of Housing and Urban Development (HUD).
Its main activity is the insuring of residential mortgage loans made by
private lenders. The FHA sets standards for construction and
underwriting but does not lend money or plan or construct housing.
fee simple
The greatest possible interest a person can have in real estate.
FHA mortgage
A mortgage that is insured by the Federal Housing Administration (FHA).
Also known as a government mortgage.
finder's fee
A fee or commission paid to a mortgage broker for finding a mortgage
loan for a prospective borrower.
first mortgage
A mortgage that is the primary lien against a property.
first time home buyer
fixed-rate mortgage (FRM)
A mortgage in which the interest rate does not change during the entire
term of the loan.
flood insurance
Insurance that compensates for physical property damage resulting from
flooding. It is required for properties located in federally designated
flood areas.
foreclosure (return to top)
The legal process by which a borrower in default under a mortgage is
deprived of his or her interest in the mortgaged property. This usually
involves a forced sale of the property at public auction with the
proceeds of the sale being applied to the mortgage debt.
FSBO
fully amortized ARM
An adjustable-rate mortgage (ARM) with a monthly payment that is
sufficient to amortize the remaining balance, at the interest accrual
rate, over the amortization term.
funded
G
good faith estimate
An estimate of charges which a borrower is likely to incur in connection
with a settlement.
H
hazard insurance
(return to top)
Insurance protecting against loss to real estate caused by fire,
some natural causes, vandalism, etc., depending upon the terms of the
policy.
home inspections
home warranty
housing ratio
The ratio of the monthly housing payment in total (PITI - Principal,
Interest, Taxes, and Insurance) divided by the gross monthly income.
This ratio is sometimes referred to as the top ratio or front end ratio.
HUD
The U.S. Department of Housing and Urban Development.
HUD 1 statement
See Uniform also
improvements
index
(return to top)
A published interest rate to which the interest rate on an
Adjustable Rate Mortgage (ARM) is tied. Some commonly used indices
include the 1 Year Treasury Bill, 6 Month LIBOR, and the 11th District
Cost of Funds (COFI).
inspection period
insurance - home owners
intelligent pricing
internet services
J
K
L
lenders
lien
(return to top)
An encumbrance against property for money due, either voluntary or
involuntary.
lifetime cap
A provision of an ARM that limits the highest rate that can occur
over the life of the loan.
loan / mortgage officers
loan to value ratio (LTV)
The ratio of the amount of your loan to the appraised value of the
home. The LTV will affect programs available to the borrower and
generally, the lower the LTV the more favorable the terms of the
programs offered by lenders.
loan types
Definitions:
- 1-1 ARM: An adjustable rate mortgage that has an
initial fixed interest rate for one year, and thereafter has a
variable interest rate that may be adjusted each year. See the
definition of an adjustable rate mortgage for additional information.
- 1-1 ARM jumbo: An adjustable rate mortgage for an
amount over $300,700 that has an initial fixed interest rate for one
year, and thereafter has a variable interest rate that may be adjusted
each year. See the definition of an adjustable rate mortgage for
additional information.
- 15-yr fixed mortgage: A 15-year loan in which the
interest rate does not change during the entire term of the loan.
- 15-yr fixed jumbo: A 15-year loan for an amount
over $300,700 in which the interest rate does not change during the
entire term of the loan.
- 30-yr fixed mortgage: A 30-year loan in which the
interest rate does not change during the entire term of the loan.
- 30-yr fixed jumbo: A 30-year loan for an amount
over $300,700 in which the interest rate does not change during the
entire term of the loan.
- Adjustable-rate mortgage: (ARM) A type of
mortgage loan in which the interest rate is adjusted according to a
schedule identified in the contract. Each individual contract may
stipulate interest rate limits (caps and floors) and frequency of
payment adjustments. Adjustable rate mortgages have an interest rate
that increases or decreases over the life of the loan based upon
market conditions. With most adjustable rates, the initial rate is
lower than the rate offered on a standard fixed rate mortgage.
Adjustable rate mortgages have two important terms, the index and the
margin. An index is the benchmark used to adjust the interest rate at
specified times in the future. This financial index governs the
changes in the interest rate. When the index rises, so will the
interest rate; the opposite happens when the index falls. The margin
is the difference between the index rate and the loan interest rate.
To calculate the interest rate (indexed rate) for an adjustable rate
loan, add the margin to the index. The most common ARMs are 1/1, 3/1,
5/1, 7/1 and 10/1.
- Adjustment period: How often the loan's interest
rate can be changed on an adjustable rate mortgage.
- Annual percentage rate: (APR) The cost of your
credit expressed in terms of an annual rate. The APR is a method for
calculating an interest rate based on the interest collected, discount
points charged, mortgage insurance premiums and certain cost related
to the closing. Because of these factors, APR is often higher than the
loan interest rate.
- Caps: Limits on how much the interest rate of an
adjustable rate mortgage can change, either at each adjustment period
or during the life of the loan.
- Home Equity Line of Credit: (HELOC) The HELOC is
a revolving, open-ended line of credit. The HELOC typically allows the
consumer a set number of years to use the available credit. Some
lenders may require a minimum monthly payment of principal and
interest, while others may allow consumers to pay the interest only
amount monthly for a designated period. In addition, some lenders may
charge an early termination fee if the line of credit is closed prior
to the designated repayment term. This line of credit is often used
for home improvement and debt consolidation.
- Home Equity loan: A loan that is based on the
equity in the dwelling being used as collateral. Equity is the
difference between the home’s fair market value and the unpaid balance
of the mortgage and any outstanding liens. Equity is increased as the
mortgage is paid down or as the property appreciates.
- Index: A published measure for the cost of money
that lenders use to calculate the rate on an adjustable rate mortgage.
- Indexed rate: The sum of the published index plus
the margin.
- Jumbo loan: A mortgage loan that has a principal
balance greater than the amount eligible for purchase by Fannie Mae or
Freddie Mac. ($300,700 in 2002)
- Loan-to-Value: The ratio of the mortgage loan
amount to the property's appraised value or selling price, whichever
is less.
- Margin: The number of percentage points added to
the index on an adjustable rate mortgage.
- Points: A point equals one percent of the
principal balance of a mortgage loan. Lenders charge points as a way
to make profit. Borrowers may pay discount points to reduce the loan
interest rate.
- Principal: The total amount of money borrowed on
the loan.
lock-in
A written agreement guaranteeing the home buyer a specified interest
rate provided the loan is closed within a set period of time. The
lock-in also usually specifies the number of points to be paid at
closing.
M
margin
(return to top)
The number of percentage points a lender adds to the index value to
calculate the ARM interest rate at each adjustment period. A
representative margin would be 2.75%.
marketing
market price
market value
MLS
model homes
mortgage
A legal document that pledges a property to the lender as security
for payment of a debt
mortgage disability insurance
A disability insurance policy which will pay the monthly mortgage
payment in the event of a covered disability of an insured borrower for
a specified period of time.
mortgage insurance (MI)
Insurance written by an independent mortgage insurance company
protecting the mortgage lender against loss incurred by a mortgage
default. Usually required for loans with an LTV of 80.01% or higher.
mortgagee
The person or company who receives the mortgage as a pledge for
repayment of the loan. The mortgage lender.
mortgagor
The mortgage borrower who gives the mortgage as a pledge to repay.
multiple listing service
N
negotiation
new home construction -warning about new
construction model homes.
no income, no asset verifying loans
DESCRIPTION
non-conforming loan
(return to top)
Also called a jumbo loan. Conventional home mortgages not eligible
for sale and delivery to either Fannie Mae (FNMA) or Freddie Mac (FHLMC)
because of various reasons, including loan amount, loan characteristics
or underwriting guidelines. Non-conforming loans usually incur a rate
and origination fee premium. The current non-conforming loan limit is
,601 and above.
note
A written agreement containing a promise of the signer to pay to a
named person, or order, or bearer, a definite sum of money at a
specified date or on demand.
O
offer
DESCRIPTION
offer & acceptance
DESCRIPTION
open house
DESCRIPTION
origination fee
A fee imposed by a lender to cover certain processing expenses in
connection with making a real estate loan. Usually a percentage of the
amount loaned, such as one percent.
owner financing (return to top)
A property purchase transaction in which the property seller
provides all or part of the financing.
P
pest inspections - termites, mold, fungus etc.,
Planned Unit Developments (PUD)
A subdivision of five or more individually owned lots with one or
more other parcels owned in common or with reciprocal rights in one or
more other parcels.
PITI
Principal, interest, taxes and insurance--the components of a
monthly mortgage payment.
points
Charges levied by the mortgage lender and usually payable at
closing. One point represents 1% of the face value of the mortgage loan.
preliminary title report/search
prepaids
Those expenses of property which are paid in advance of their due
date and will usually be prorated upon sale, such as taxes, insurance,
rent, etc.
prepayment penalty
A charge imposed by a mortgage lender on a borrower who wants to pay
off part or all of a mortgage loan in advance of schedule.
pre-qualify
presenting offers
principal
Amount of debt, not including interest. The face value of a note or
mortgage.
private mortgage insurance (PMI)
Insurance provided by non-governmental insurers that protects lenders
against loss if a borrower defaults. Fannie Mae generally requires
private mortgage insurance for loans with loan-to-value (LTV)
percentages greater than 80%.
processing sale
property condition
protection warranty
purchase and sale contract
The formal agreement in which the seller agrees to sell and the buyer
agrees to buy the property.
Q
qualifying ratios
The ratio of your fixed monthly expenses to your gross monthly
income, used to determine how much you can afford to borrow. The fixed
monthly expenses would include PITI along with other obligations such as
student loans, car loans, or credit card payments.
R
rate cap
A limit on how much the interest rate can change, either at each
adjustment period or over the life of the loan.
rate lock-in (return to top)
A written agreement in which the lender guarantees the borrower a
specified interest rate, provided the loan closes within a set period of
time.
real estate - not legal unless in writing and all parties have
mutual consent.
real estate consultant
recording / recordation's of documents
rebate
Compensation received from a wholesale lender which can be used to cover
closing costs or as a refund to the borrower. Loans with rebates often
carry higher interest rates than loans with "points" (see above).
referral services
refinancing
The process of paying off one loan with the proceeds from a new loan
using the same property as security.
residential mortgage credit report (RMCR)
A report requested by your lender that utilizes information from at
least two of the three national credit bureaus and information provided
on your loan application.
S
second mortgage
A second lien on a property.
seller
seller carry back
(return to top)
An agreement in which the owner of a property provides financing, often
in combination with an assumed mortgage.
seller disclosure statement
selling
showings
SPDS
survey
A print showing the measurements of the boundaries of a parcel of land,
together with the location of all improvements on the land and sometimes
its area and topography.
T
tenants-in-common
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An undivided interest in property taken by two or more persons. The
interest need not be equal. Upon death of one or more persons, there is
no right of survivorship.
term
The period or duration of a note or loan.
terms & conditions
termite inspections
time is of the essence
title
The evidence one has of right to possession of land.
title companies
title insurance
Insurance against loss resulting from defects of title to a specifically
described parcel of real property.
title search
An investigation into the history of ownership of a property to check
for liens, unpaid claims, restrictions or problems, to prove that the
seller can transfer free and clear ownership.
total debt ratio
Monthly debt and housing payments divided by gross monthly income. Also
known as Obligations-to-Income Ratio or Back-End Ratio.
Truth-in-Lending Act
A federal law requiring a disclosure of credit terms using a standard
format. This is intended to facilitate comparisons between the lending
terms of different financial institutions.
U
undisclosed agency
DESCRIPTION
underwriting
In mortgage banking, the analysis of risk involved in making a mortgage
loan to determine whether the risk is acceptable to the lender.
undersigned
DESCRIPTION
unethical
DESCRIPTION
uniform settlement statement - (see also) HUD 1 Statement
DESCRIPTION
un-recorded deed
DESCRIPTION
V
valuable consideration
DESCRIPTION
value
DESCRIPTION
Veterans Administration (VA)
A government agency guaranteeing mortgage loans with no down payment to
qualified veterans.
virtual tours - 360 degree
W
walk-through
DESCRIPTION
warranty
DESCRIPTION
warranty deed
DESCRIPTION
win/lose
DESCRIPTION
win/win
DESCRIPTION
X
Y
Z
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