-A- B C D E F G H I J K L M N O P Q R S T U - Z

A Credit - An industry term signifying excellent credit. Typically A credit borrowers will qualify at the best rates available.

(ARM) adjustable-rate mortgage -A mortgage that changes interest rate periodically based upon the changes in a specified index.

adjustment date-The date on which the interest rate changes for an adjustable-rate mortgage (ARM).

adjustment period-The period that runs between the adjustment periods for an adjustable-rate mortgage (ARM).

amortization - The reduction in principal balance and interest portion of the mortgage payments as each payment is made until the debt is paid off or is killed.( mort = kill)

amortization term - The amount of time required to payoff (mort = kill) the mortgage loan.

(APR) annual percentage rate - The effective rate of interest charged on a loan with the impact of prepaid finance charges of all types deducted from the principal amount of the loan and restated on "Truth-In-Lending Disclosures" to be used to compare effective rates between loans, or loan programs.

application - A form used to request a mortgage loan and to provide information regarding a prospective borrower, co-borrower and the proposed security.

appraisal - A written analysis of the estimated value of a property prepared by a qualified appraiser that determines the most likely price that a property would sale for if put on the market.

appraiser - A person qualified by education, training, and experience to estimate the value of real property and improvements.

appreciation - An increase in the value of a property due to changes in market conditions or other causes.

asset - Anything of monetary value that is owned by a person. Assets include real property, personal property, stocks, bonds, notes and claims.

assignment - The transfer of a mortgage from one person to another.

assumable mortgage - A mortgage that can be taken over (``assumed'') by the buyer from the Seller, 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.

EQUITY MORTGAGE FUNDING, INC.

(Return To Top)

-B- .. A C D E F G H I J K L M N O P Q R S T U - Z .

B Credit - An industry term that denotes a borrower with slightly impaired credit, representing to the lender a slightly higher risk than "A Credit".

balance sheet - A financial statement that shows assets, liabilities, and net worth of an entity as of a specific date.

balloon note or mortgage - A mortgage that has level monthly payments that will amortized term longer than the stated term, thus leavening a balance larger than a normal monthly payment for the final payment.

balloon payment - The final payment that is made at the maturity date of a balloon mortgage. This payment is the balance of the loan plus accrued interest and is higher than the standard monthly payment.

bankrupt - A person, firm, or corporation that, through a court proceeding, is relieved from the payment of some or all debts after the surrender of all assets over a nominal amount 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 seek relief from creditors by transferring his or her assets to a trustee for liquidation and disbursement to the creditors.

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 - 1) A preliminary title policy, spelling out the conditions to be meet by the insured in order for the Title Insurer to bind coverage. 2) Hazard Insurance "binder" shows evidence of payment by the insured and that a hazard insurance company has accepted the risk. 3) 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 secured by a mortgage or a deed of trust.

breach - A violation of a legal obligation.

bridge loan - A loan or mortgage 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.'' It "bridges" the timing gap when funds needed for closing are still tied up in a property pending sale.

broker - A person who, for compensation, brings parties together and assists in negotiating contracts between them.

buy down mortgage - A temporary reduction in a mortgage payment for a specific term to reduce a borrower's monthly payments during the first few years of a mortgage. A permanent buy down reduces the interest rate over the entire life of a mortgage. Buy downs are usually paid by an interested party on behalf of the buyer, by someone other than the buyer.

EQUITY MORTGAGE FUNDING, INC.

[RETURN TO TOP]

-C- .A B D E F G H I J K L M N O P Q R S T U - Z .

C Credit - An industry term that denotes a borrower with slightly impaired credit, representing a slightly higher risk to the lender than "B Credit".

call option - A provision in the mortgage that gives the mortgagee (lender) 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 - A structure or component erected as a permanent improvement to real property that adds to its value and useful life.

cash-out refinance - A mortgage loan in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing mortgage(s), liens and closing costs and the borrower receives additional cash.

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).

Chapter 7 - See bankruptcy.

Chapter 13 -

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 ad seller or a borrower and lender, signing the necessary documents, and agreeing to the disbursement of funds.. Also called ``settlement.''

closing cost item - 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.

closing costs - Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs may include items such as an origination fee, an attorney's fee, taxes, an amount placed in escrow, and charges for obtaining title insurance and a survey.

closing statement - Also referred to as the HUD Settlement Statement or HUD 1. This is 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.

collateral - An asset 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.

commission - The fee charged by a broker or agent for negotiating a real estate or loan transaction.

commitment letter - A formal written offer by a lender stating the terms under which it agrees to lend money to a borrower. 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 common expenses of their operation and maintenance. Common areas may include swimming pools, tennis courts, club houses, commons, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress. .

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 - 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 - Mortgage or Real Estate industry slang for ``comparable properties'' used for comparative purposes in the appraisal process. Comparables are properties like the property being appraised; 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.

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.

condominium conversion - Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.

construction loan - An interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.

consumer reporting agency (or credit bureau) - An organization that prepares reports that are used by lenders to determine a potential borrower's credit history.

contingency - A contractual condition that must be met before a contract is legally binding.

conforming loan - a loan that has characteristics that conform with standard underwriting guidelines. (A Paper, Prime)

contract - An oral or written agreement to do or not to do a certain thing.

contract for deed - An agreement promising title on a property to a buyer AFTER the buyer pays the seller in full. May also be described as "lease to own", "land contract" and other similar terms.

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.

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.

covenant - A clause in a mortgage that obligates or restricts the borrower and that, if violated, can result in foreclosure.

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 - A record of an individual's open and fully repaid debts. A credit history helps lenders to determine whether a potential borrower has a habit or 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.

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.

credit scoring -

[Return to TOP]

eZDesk.com

Your Source For Mortgage Tools & Information On The WEB