“One, Two, Three”
Financing |
TOP |
A type of financing where
the buyer assumes an existing loan, obtains a second mortgage
from a third party lender, and takes a third loan from the
seller.
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|
| 12-Month Treasury
Average (MTA) |
|
This is an index that is
the 12 month average of the monthly average yields of U.S.
Treasury securities adjusted to a constant one year maturity. It
is computed by averaging the previous 12 monthly values of the
1-Year Constant Maturity Treasury (CMT). Because this index is
an annual average, it is more secure than the 1-Year CMT index.
The MTA index usually fluctuates slightly more than the 11th
District Cost of Funds Index (COFI), although its movements
track each other closely. The MTA and COFI-indexed adjustable
rate mortgages (ARM) work much the same way. ARMs tied to the
MTA index may have the potential for negative amortization.
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| “Subject to” Clause |
|
A clause in a deed that
states that the grantee takes title “subject to” and existing
mortgage. The original mortgagor is alone responsible for any
deficiency, should there be foreclosure of the mortgage.
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| 'As-is' agreement |
TOP |
Certifies that a buyer
accepts whatever physical condition a property is in at the time
the contract is signed. May be controlled by state and local
regulations.
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|
| Abstract of Title |
|
A review of the public
records relating to the title to a property. An attorney or
title insurance company reviews the abstract of title to
establish whether there are any title flaws that must be cleared
before a buyer can purchase clear, marketable, and insurable
title.
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| Acceleration Clause |
|
A provision that allows
the lender to demand the immediate repayment of the mortgage
loan balance due to circumstances such as: failure to make
payments, bankruptcy, nonpayment of taxes on mortgaged property,
or the breaking of loan covenants.
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| Acceptance |
|
A contractual agreement
that binds the offeree to the terms and responsibilities
outlined in the offer.
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| Accrued Interest |
|
Interest earned for the
period of time passed since the interest was last paid.
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| Acquisition Loan |
|
A loan made for the sole
purpose of purchasing land. Also called "land acquisition loan."
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| Add-on Interest |
|
The amount of interest
paid on the principal of a loan for the term of that loan.
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| Additional Principal
Payment |
|
A payment by a borrower
made in excess of the required monthly payment in order to
reduce the remaining balance on the loan.
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| Adjustable Rate
Mortgage (ARM) |
|
A mortgage where the
interest rate is adjusted periodically based on a pre-selected
index. Also known as a "floating rate mortgage."
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| Adjusted Basis |
|
The base price of an asset
or security that reflects any deductions taken on, or
improvements to the asset or security. Adjusted basis is used to
compute the gain or loss when the asset or security is sold.
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| Adjusted Gross Income |
|
The gross income of a
building if it is fully rented, not including an allowance for
estimated vacancies.
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| Adjustment Date |
|
The date that the interest
rate changes on an adjustable rate mortgage (ARM).
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| Adjustment Interval |
|
The period of time between
changes in the interest rate and/or monthly payments for an
adjustable rate mortgage (ARM), typically, one, three, or five
years.
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| Adjustment Period |
|
The period of time passing
between adjustment dates for an adjustable rate mortgage (ARM).
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| Administrator |
|
A person appointed by a
probate court to manage and distribute the estate of a person
who has died without a will.
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| Affordability Analysis |
|
An examination of a
buyer's ability to afford a house, by reviewing income,
liabilities, available funds, mortgage type, home price, and
closing costs.
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|
| Alt-A |
|
This is a type of loan
program that is almost conforming, but slightly off on one or
more criteria.
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| Amortization |
|
The repayment of a
mortgage loan, both the principal and interest, through regular
installments.
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| Amortization Term |
|
The number of months
required to repay the mortgage loan.
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|
| Annual Mortgage
Statement |
|
A report sent to the
borrower each year stating the amount of taxes, insurance, and
interest paid during the year, as well as the remaining mortgage
loan balance.
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|
| Annual Percentage Rate
(APR) |
|
A figure that calculates
the full cost of a loan including interest rate and all other
fees associated with securing a loan.
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| Apartment Conversion |
|
The conversion of a rental
apartment building to individually owned units.
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|
| Application Fee |
|
The fee charged by the
lender to the borrower for applying for a loan.
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|
| Appraisal |
|
A written analysis of the
estimated value of a property prepared by a qualified appraiser.
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| Appraised Value |
|
An opinion of a property's
fair market value, based on an appraiser's knowledge,
experience, and analysis of the property.
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| Appraiser |
|
A person familiar with
local real estate values, qualified by education, training, and
experience to estimate the value of real property and personal
property.
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|
| Appreciation |
|
An increase in the value
of a property due to changes in market conditions or other
causes. The opposite of depreciation.
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|
| Arms Length Transaction |
|
All parties involved in a
real estate transaction with no personal interest in the
transaction or other involved persons.
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| Assessed Value |
|
The valuation placed upon
property by a public tax assessor for purposes of taxation.
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| Assessment |
|
The process of placing a
value on property for the strict purpose of taxation. May also
refer to a levy against property for a special purpose, such as
a sewer assessment.
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| 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).
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|
| Assignment |
|
The transfer of a mortgage
from one person to another.
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|
| Assignment of Leases &
Rents |
|
The instrument evidencing
transfer by a lessee to the Lender and/or assigns of the exact
interest of said lessee including rent receipts.
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|
| Assumption |
|
The act of taking over an
obligation or liability of a mortgage note from the previous
borrower.
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|
| Assumption Fee |
|
The fee paid to a lender
(usually by the purchaser of real property) resulting from the
assumption of an existing mortgage.
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|
| Assumption of Mortgage |
|
An obligation undertaken
by the purchaser of property to be legally liable for payment of
an existing mortgage. In an assumption, the purchaser is
substituted for the original mortgagor in the mortgage
instrument and the original mortgagor is to be released from
further liability in the assumption, the mortgagee's consent is
usually required.
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|
| Attorney-in-Fact |
|
One who holds a power of
attorney from another to execute documents on behalf of the
grantor of the power. The original mortgagor should always
obtain a written release from further liability if he desires to
be fully released under the assumption. Failure to obtain such a
release renders the original mortgagor liable if the person
assuming the mortgage fails to make the monthly payments. An
'Assumption of Mortgage' is often confused with 'purchasing
subject to a mortgage.' When one purchases subject to a
mortgage, the purchaser agrees to make the monthly mortgage
payments on an existing mortgage, but the original mortgagor
remains personally liable if the purchaser fails to make the
monthly payments. Since the original mortgagor remains liable in
the event of default, the mortgagee's consent is not required to
a sale subject to a mortgage. Both 'Assumption of Mortgage' and
'Purchasing Subject to a Mortgage' are used to finance the sale
of property. They may also be used when a mortgagor is in
financial difficulty and desires to sell the property to avoid
foreclosure.
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|
| Balance Sheet |
TOP |
A financial statement that
shows assets, liabilities, and net worth as of a specific date.
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|
| Balloon Mortgage |
|
A mortgage that has fixed
monthly payments that will amortize it over a stated term but
that requires a lump sum payment to be due at the end of an
earlier specified term.
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|
| Balloon Payment |
|
The final lump sum payment
that is made at the maturity date of a balloon mortgage.
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| 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.
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|
| 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.
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|
| Basis Point |
|
A basis point is 1/100th
of a percentage point. For example, a fee calculated as 50 basis
points of a loan amount of $100,000 would be 0.50% or $500.
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| Before-Tax Income |
|
Income before taxes are
deducted.
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|
| Beneficiary |
|
The person designated to
receive the income from a trust, estate, or a deed of trust.
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|
| Binder or 'Offer to
Purchase' |
|
A preliminary agreement,
secured by the payment of earnest money, between a buyer and
seller as an offer to purchase real estate. A binder secures the
right to purchase real estate upon agreed terms for a limited
period of time. If the buyer changes his mind or is unable to
purchase, the earnest money is forfeited unless the binder
expressly provides that it is to be refunded. Broker (See Real
Estate Broker)
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|
| Biweekly Payment
Mortgage |
|
A mortgage that allows
payments to reduce the debt every two weeks (instead of the
standard monthly payment schedule). The 26 (or 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.
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|
| Blanket Mortgage |
|
The mortgage that is
secured by a cooperative project, as opposed to the share loans
on individual units within the project.
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|
| 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.
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|
| Bond Financing |
|
A type of financing which
is an agreement to repay the principal along with the interest
on a specified date.
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|
| Borrower |
|
Any entity that is, or
when loan is made will become, the obligor on the loan. For
commercial loans, the obligor may be an Individual, Corporation,
Partnership, Limited Liability Co (LLC) or a Trust, depending on
the loan amount.
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|
| Breach |
|
A violation of any legal
obligation.
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|
| 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.'
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|
| Broker (real estate) |
|
A licensed real estate
professional who, typically, represents the seller of a
property. A broker's duties might include: determining market
values, advertising properties for sale, showing properties to
prospective buyers, and advising clients with regard to offers
and related matters.
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|
| Builder Loans (also
developer loans) |
|
These are loans for
builders who are financing the construction of multiple
properties or spec/model homes before they are sold to an
occupant.
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|
| Building Code |
|
Local regulations that
control design, construction, and materials used in
construction. Building codes are based on safety and health
standards.
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| Building Line or
Setback |
|
Guidelines that limit the
distance from the street or adjacent properties where
construction may not extend. The building line may be
established by building codes, zoning ordinances, or restrictive
covenants in deeds or leases.
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| Buy Down |
|
Money advanced by an
individual (seller, builder, etc.) to reduce monthly payments
for a home mortgage either during the entire term or for an
initial period of years.
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| Call Option |
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.
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|
| Cancellation Clause |
|
The details in a lease, or
other contract, under which each party may terminate the
agreement.
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| Cap |
|
A provision of an
adjustable-rate mortgage (ARM) that limits how much the interest
rate may increase or decrease.
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|
| Cap Rate |
|
A rate of return used to
derive the capital value of an income stream. Value = Annual
Income / Cap Rate.
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| Capital Expenditure |
|
The cost of an improvement
made to extend the useful life of a property or to add to its
value.
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| Capital Improvement |
|
Any structure or component
erected as a permanent improvement to real property that adds to
its value and useful life.
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| Capital Improvements
Escrow |
|
A trust account
established to hold funds allocated for the completion of
rehabilitation, repairs or incomplete items of construction as
required by an escrow agreement.
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|
| Capitalization Process |
|
A process by which
anticipated future income is converted into one lump sum value.
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|
| Carryback Financing |
|
A transaction where the
seller of the property takes a promissory note for some, or all,
of the equity in their house, upon its selling. The promissory
note specifies the terms under which the buyer of the property
is expected to pay the amount owed to the seller over time.
Carrybacks can be secondary financing, after a separate first
mortgage obtained elsewhere, or the carryback might be for the
whole amount as well. Also referred to as "seller financing."
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|
| Carrying Charges |
|
The costs incurred to
maintain a property when it is non-productive or in interim use.
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|
| Cash Flow |
|
Money available for debt
service, less tenant improvement reserves and leasing
improvement reserves when applicable.
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|
| 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 liens. In-hand cash that is received
from any given refinance or mortgage.
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|
| Certificate of Deposit |
|
A document written by a
bank or other financial institution that is evidence of a
deposit, with the issuer’s promise to return the deposit plus
earnings at a specified interest rate within a specified time
period.
|
|
| 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 Sale |
|
An official document that
entitles the buyer to receive a deed, pending court
confirmation.
|
|
| Certificate of Title |
|
A certificate issued by a
title company or a written opinion rendered by an attorney that
the seller has good marketable and insurable title to the
property, which he is offering for sale. A certificate of title
offers no protection against any hidden defects in the title,
which an examination of the records could not reveal. The issuer
of a certificate of title is liable only for damages due to
negligence. The protection offered a homeowner under a
certificate of title is not as great as that offered in a title
insurance policy.
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|
| Certificate of Veteran
Status |
|
A document that enables
veterans who have served 90 days of continuous active duty to
obtain lower down payments on certian FHA insured loans. It may
be obtained by sending DD 214 to the local VA office with form
26-8261: Request for Certificate of Veteran Status.
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|
| 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 monthly frequency of
payments and/or interest rate changes in an adjustable rate
mortgage (ARM).
|
|
| Chapter 11 |
|
A type of bankruptcy that
allows the debtor to maintain operating control of the business
while restructuring and reorganizing debts, and creating an
acceptable debt-payment plan. Also known as "debtor in
possession."
|
|
| Chapter 13 |
|
A type of bankruptcy plan
where the debtor repays the creditor on a scheduled
three-to-five year period. Also called "wageearner plan."
|
|
| Chapter 7 |
|
A type of bankruptcy
filing which allows the debtor's assets to be distributed among
the creditors. Also called a "liquidation."
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|
| 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 Costs |
|
Costs associated with the
purchase of a home that must be paid at the sale closing. These
could include mortgage fees, title insurance, appraisal,
inspection fees, and points.
|
|
| 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 quit claim
deed, release, or court action.
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|
| Co-Borrower |
|
An additional borrower on
a loan. A co-borrower's obligation on a loan is the same as the
borrower's.
|
|
| 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.
|
|
| Coinsurance |
|
A sharing of insurance
risk between the insurer and the insured. Coinsurance depends on
the relationship between the amount of the policy and a
specified percentage of the actual value of the property insured
at the time of the loss.
|
|
| 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.
|
|
| Combination Loan |
|
With this type of loan,
you receive a first mortgage for a percentage of the loan
amount, and a second mortgage at the same time for the remainder
of the balance. If avoiding PMI (mortgage insurance), consider
combination loans.
|
|
| Combined Loan-to-Value
(CLTV) |
|
The relationship between
the unpaid principal balances of all the mortgages on a property
(usually first and second) and the property's appraised value
(or sales price, if it is lower).
|
|
| Commercial Loan |
|
Financing given on a
commercial property. Financed amount is determined by the
particular property, based off previous reported income
histories and projected rental income and leaves a reserve of
25% (see Debt Service Coverage).
|
|
| 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 sales
price of the property or loan.
|
|
| Commitment |
|
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 Area Assessments |
|
Levies against individual
unit owners in a condominium or planned unit development (PUD)
project for additional capital to defray homeowners' association
costs and expenses and to repair, replace, maintain, improve, or
operate the common areas of the project.
|
|
| Common Areas |
|
Those portions of a
building, land, and amenities owned (or managed) by a planned
unit development (PUD), a 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 |
|
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.
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|
| Compound Interest |
|
Interest paid on the
original principal balance and on the accrued and unpaid
interest.
|
|
| Condemnation |
|
The taking of private
property for public use by a government unit, against the will
of the owner, but with payment of just compensation under the
government's power of eminent domain. Condemnation may also be a
determination by a governmental agency that a particular
building is unsafe or unfit for use.
|
|
| 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.
|
|
| Condominium Hotel |
|
A condominium project that
has rental or registration desks, short-term occupancy, food and
telephone services, and daily cleaning services, and that is
operated as a commercial hotel even though the units are
individually owned.
|
|
| Conforming Loan |
|
The current conforming
loan limit is $359,650 and below. Conforming loan limits change
annually.
|
|
| Construction Loan |
|
A short-term loan for
funding the cost of construction. The lender advances funds to
the builder as the work progresses.
|
|
| Construction to
Permanent |
|
A type of loan to pay off
an existing construction loan, lot loan, and any additional
construction costs. Must be completed and inspected before loan
closes and funds to pay off, but it has to be approved prior to
completion
|
|
| Consumer Credit
Counseling |
|
This is a non-profit
organization that helps citizens lower their debt payments, and
consolidate payments under this orgranization. They are also
know as CCCS (consumer credit counseling services).
|
|
| 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 agreement between two
or more parties, especially one that is written and enforceable
by law.
|
|
| Conventional Mortgage |
|
Any mortgage that is not
insured or guaranteed by the federal government.
|
|
| Conversion Clause |
|
A condition in an
adjustable rate mortgage (ARM) that allows the loan to be
converted to a fixed-rate mortgage at some point during the
term.
|
|
| 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 time frames
after loan closing.
|
|
| Convertible Arm |
|
An adjustable rate
mortgage 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 |
|
When an employer pays all
or part of the costs to relocate an employee to another location
of the company.
|
|
| Correspondent |
|
brokers or bankers and
sells them to a wholesale lender through a prior commitment. The
lender who originates the loan then receives a service fee from
the correspondent lender.
|
|
| Cosigner |
|
An individual, other than
the borrower, who signs a mortgage loan obligation and, thereby,
assumes equal liability.
|
|
| 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.
|
|
| Coupon Rate |
|
The actual interest rate
on a debt, bond, note, or other fixed income security. The
coupon rate on a mortgage is the contract rate stated in the
mortgage note.
|
|
| Covenant |
|
A clause in a mortgage
that obligates or restricts the borrower and that, if violated,
can result in foreclosure.
|
|
| Credit |
|
1. A measurement of a
person's ability to pay bills on time. Several companies track
individuals' credit histories by detailing late or missed
payments on loans, credit cards, and other debts. 2.An agreement
in which a borrower receives something of value in exchange for
a promise to repay the lender at a later date.
|
|
| Credit Enhancement |
|
A process to reduce credit
risk, and provide the lender with reassurance that they will be
compensated if the borrower defaults, by requiring collateral,
insurance, or other agreements.
|
|
| Credit History |
|
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 Life Insurance |
|
A type of insurance often
bought by mortgagors because it will pay off the mortgage debt
if the mortgagor dies while the policy is in force.
|
|
| Credit Report |
|
A report of an
individual's credit history prepared by a credit bureau and used
by lenders to determine a potential borrower's creditworthiness.
Independent sources compile the report, which lists the
borrower's debts, liabilities, and assets.
|
|
| 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.
|
|
| Creditor |
|
An entity, such as a
mortgage company or bank, that loans money for repayment and
interest.
|
|
| Cure |
|
A loan that is removed
from a delinquency status with no loss to the insurer.
|
|
| Current Assets |
|
Assets that could be
converted into cash within a year, such as cash equivalents,
accounts receivable, inventory, marketable securities, prepaid
expenses, and other such assets.
|
|
| Debt Consolidation
Refinance |
TOP |
A refinance transaction
that uses the equity in your house or monies from your mortgage
to consolidate your debt into one low rate monthly payment.
|
|
| Debt Ratio |
|
The total of the proposed
monthly payments divided by the total monthly income.
|
|
| Debt Service Coverage
Ratio |
|
The ratio calculated by
dividing the property's cash flow available for debt service by
the annual principal and interest requirements. ('DSC')
|
|
| Declaration of Trust |
|
A written document from
one having legal title to a property, that the property is held
in trust for the benefit of another.
|
|
| Deed |
|
A document that transfers
real estate from one party to another. Officially recorded in
government records.
|
|
| Deed of Trust |
|
Like a mortgage, a
security instrument whereby real property is given as security
for a debt. However, in a deed of trust there are three parties
to the instrument
|
|
| Deed-in-Lieu |
|
A deed given by a
mortgagor to the mortgagee to satisfy a debt and avoid
foreclosure. Also called a 'voluntary conveyance.'
|
|
| Default |
|
Failure to make mortgage
payments on a timely basis or to comply with other conditions of
a mortgage.
|
|
| Deficiency |
|
The difference between the
balance on a loan and profits from the sale of the loan
collateral.
|
|
| Deficiency Judgment |
|
A court order to pay the
balance owed on a loan if the proceeds from the sale of the
security are insufficient to pay off the loan. Deficiency
judgments are not allowed in all states.
|
|
| Delegated Underwriting
and Servicing (DUS) |
|
Fannie Mae allows certain
lenders to process and approve FNMA’s multifamily loans wherein
the lender takes a percentage of the risk.
|
|
| Delinquency |
|
A loan in which a payment
is overdue but not yet in default.
|
|
| Delivery |
|
The actual placement of
the property to the grantee, usually by delivery of a deed to
the buyer or by recording of the deed.
|
|
| Demand Note |
|
There is no set day for
repayment of a this note, but it is due on the “demand” of the
lender.
|
|
| Density |
|
The number of persons or
buildings occupying a certain amount of land. An acre is usually
used.
|
|
| Department of Veterans
Affairs (VA) |
|
An agency of the federal
government that guarantees residential mortgages made to
eligible veterans of the military services. The guarantee
protects the lender against loss and thus encourages lenders to
make mortgages to veterans.
|
|
| 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 Reduction
Mortgage |
|
An amortized mortgage in
which principal and interest payments are paid monthly with
interest being computed on the remaining balance.
|
|
| Discount Points |
|
Charges levied by the
mortgage lender to obtain a better interest rate, usually
payable at closing. One point represents 1% of the mortgage loan
amount.
|
|
| Discount Rate |
|
The Federal Reserve
System’s rate of interest charged to banks that buy money from
them. An increase in the rate discourages banks from borrowing.
A compound interest rate used to convert expected future income
into a present value income.
|
|
| Disposition of Real
Estate Statement |
|
A requirement for the
borrower that they will occupy the property being purchased even
though they may own other property. The borrower must state that
the other property will be sold or rented.
|
|
| Documentary Stamps |
|
A state tax, in the forms
of stamps, required on deeds and mortgages when real estate
title passes from one owner to another. The amount of stamps
required varies with each State.
|
|
| Documentary Transfer
Tax |
|
A tax charged by the city
or county of a property based on the sales price upon the
transfer of that property.
|
|
| Double Declining
Balance Method of Depreciation |
|
A use of the declining
balance method, but with double the depreciation allowable by
straight line. This is an accelerated method.
|
|
| Double Escrow |
|
Two concurrent escrows on
the same property, having the same buyer and seller of the
property. Escrow 1 buys from escrow 2 and then sells the same
property to another. This process is illegal in many states
unless a full disclosure is made.
|
|
| Doublewide |
|
A type of manufactured
housing that comes as two units joined together at the lot or
park it is to be placed on.
|
|
| Dower |
|
The rights of a widow or
widower of the property upon the spouse’s death.
|
|
| Down Payment |
|
The part of the purchase
price, which the buyer pays in cash and does not finance with a
mortgage.
|
|
| Drive by Appraisal |
|
A type of appraisal where
valuations are based only on public records and exterior
inspections.
|
|
| Dual Agency |
|
The representation of both
the buyer and seller by the same agency at the same time. Full
disclosures are required.
|
|
| Due Diligence |
|
An investigation or audit
by the investor of a potential investment. Due diligence
examines all material facts in regards to a sale.
|
|
| 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.
|
|
| Early Occupancy |
TOP |
When the buyer is allowed
to take possession of the property before the sale is completed.
|
|
| Earnest Money |
|
The deposit money given to
the seller or his agent by the potential buyer upon the signing
of the agreement of sale to show that he is serious about buying
the house. If the sale goes through, the earnest money is
applied against the down payment. If the sale does not go
through, the earnest money will be forfeited or lost unless the
binder or offer to purchase expressly provides that it is
refundable.
|
|
| Easement |
|
A right, such as a right
of way, afforded a person or entity to make limited use of
another's real property.
|
|
| Easement of Necessity |
|
An easement granted by a
court that states an easement is absolutely necessary for the
use and enjoyment of the land. Commonly given to landlocked
parcels.
|
|
| 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.
|
|
| Egress |
|
A term concerning a right
to come and go across the land of another. The term is usually
“ingress and egress.”
|
|
| Eighty-Ten-Ten Loan
(80/10/10) |
|
See 'combination loan'.
|
|
| Eleemosynary
Corporation |
|
Created for charitable
purposes that allow tax advantages although they operate the
same as a profit-making corporation. They are called nonprofit
corporations.
|
|
| Eminent Domain |
|
The right of the
government to appropriate private property for public use,
usually with compensation to the owner.
|
|
| Employer-Assisted
Housing |
|
A special Fannie Mae
housing initiative that offers several different ways for
employers to work with local lenders to develop plans to assist
their employees in purchasing homes.
|
|
| Encroachment |
|
Any improvement such as a
building, wall, fence, or other fixture which overlaps onto an
adjoining property.
|
|
| Encumbrance |
|
A legal right or interest
in land that affects a good or clear title, and diminishes the
land's value.
|
|
| Endorsement |
|
Any change or addition to
a title insurance policy that affects coverage of the policy as
per specific requirements of the insured.
|
|
| Endorser |
|
A person who signs
ownership interest over to another party. Contrast with
co-maker.
|
|
| Engineering Report |
|
A report created by an
architect or engineer describing the current physical condition
of the property and its major building systems. Also known as a
"structural report."
|
|
| Entitlements |
|
A right to certain
benefits specified by contract or law.
|
|
| Environmental Site
Assessment |
|
A detailed study of the
environmental condition of the property and surroundings
conducted in accordance with ASTM standard E 1527 or E1528
(Phase I or Transaction Screen Process) Also known as 'ESA'
|
|
| Environmental
Transaction Screen Report |
|
The report prepared in
compliance with the American Society for Testing Materials
(ASTM) standards to identify recognized environmental conditions
of a property (i.e., the presence, or likely presence, of any
hazardous substances on the property).
|
|
| 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.
|
|
| Equitable Conversion |
|
A legal term regarding a
land contract which treats the buyer’s interest as a real
property interest, even though the seller holds legal title.
|
|
| Equitable Mortgage |
|
A lien against real
property, which is enforceable in a court of equity but does not
legally constitute a mortgage. Also, a deed given as security
for a debt will be considered a mortgage rather than a transfer
of title. Also known as a constructive mortgage.
|
|
| Equity |
|
1. 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 2. The actual cash value of property after all
claims against the property have been paid.
|
|
| Equity Capital |
|
Money invested by owners
who receive a portion of the profits.
|
|
| Equity Line of Credit |
|
A deed of trust is
recorded against the borrower’s property for a predetermined
maximum loan amount and the borrower can borrow up to the amount
of the loan amount as needed. Usually interest only for a period
of 5 to 10 years and then the loan becomes a fixed mortgage and
no more equity can be borrowed. Payments are then principal and
interest until payoff.
|
|
| Equity Loan |
|
A loan based on the
borrower's equity in his or her home. Also, an account held by
the lender into which a homeowner pays money for taxes and
insurance.
|
|
| Escape Clause |
|
A provision in a contract
that allows for the cancellation of all or part of the contract.
|
|
| 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 |
|
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 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.
|
|
| 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.
|
|
| Exception |
|
In a title insurance
policy, a provision that excludes liability for a specified
title defect or outstanding encumbrance.
|
|
| Exclusive Listing |
|
A contract that gives a
licensed real estate agent the exclusive right to sell a
property for a set period of time.
|
|
| Executor |
|
An individual appointed in
a will to administer an estate.
|
|
| Exit Fees |
|
On some transactions, a
lender will charge fees upon the repayment of the loan. They can
be a penalty for early loan repayment or may be additional
compensation for the lender over and above the interest cost.
|
|
| Expert Testimony |
|
The testimony that is
given by a person with special training or knowledge in a
particular subject and is therefore considered an “expert.”
|
|
| Exposure |
|
When a property is for
sale or lease, the amount of notice or exposure the property
gets through advertising, multiple listing groups, or other
means.
|
|
| Fair Credit Reporting
Act |
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 Market Value |
|
1. The value of a property
as determined by a licensed, professional appraiser, primarily
based on the sales prices of comparable properties recently sold
nearby 2.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'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.
|
|
| Farmers Home
Administration (FmHA) |
|
Financing provided to
farmers and other qualified borrowers who are unable to acquire
loans elsewhere.
|
|
| FDIC |
|
(Federal Deposit Insurance
Corporation). Provides insurance of accounts for institutions
whose deposits were formerly covered by the Federal Savings &
Loan Insurance Corporation. (FSLIC).
|
|
| Federal Home Loan
Mortgage Corporation, Freddie Mac (FHLMC) |
|
A private corporation
authorized by Congress, which became an independent,
stockholder-owned government corporation with the passage of
FIRREA. FHLMC promotes the flow of funds into the housing
markets by purchasing conventional mortgages in the secondary
market and selling securities backed by those mortgages in the
capital market.
|
|
| Federal Housing
Administration (FHA) |
|
A division of the
Department of Housing and Urban Development. The FHA's main
activity is the insuring of residential mortgage loans made by
private lenders. It sets standards for construction and
underwriting. FHA neither lends money, nor plans, nor constructs
housing.
|
|
| Federal Housing Finance
Board (FHFB) |
|
It oversees the credit
functions of the twelve regional Federal Home Loan Banks.
|
|
| Federal National
Mortgage Association (FNMA) |
|
A government-sponsored
corporation, owned solely by private investors, created to
provide support to the secondary market for FHA and VA mortgages
and conventional mortgages.
|
|
| Fee Simple |
|
Private ownership of real
estate in which the owner has the right to control, use, and
transfer the property at will.
|
|
| Fee Simple Estate |
|
An unconditional,
unlimited estate of inheritance that represents the greatest
estate and most extensive interest in land that can be enjoyed.
It is of perpetual duration. When the real estate is in a
condominium project, the unit owner is the exclusive owner only
of the air space within his or her portion of the building (the
unit) and is an owner in common with respect to the land and
other common portions of the property.
|
|
| FHA Loan |
|
Government loans are loans
that are guaranteed or purchased by government organizations.
Two of the most popular Government Loans are the Federal Housing
Administration (FHA) and the Department of Veterans Affairs
(VA).
|
|
| FHLBB |
|
(Federal Home Loan Bank
Board)
|
|
| FICO |
|
FICO scores were developed
by Fair Isaac & Company, Inc. for each of the three major credit
reporting agencies: Equifax, Experian, and TransUnion. These
scores only consider the information in an individual's credit
file, not income or savings.
|
|
| Finance Charge |
|
The total dollar amount
your loan will cost you. It includes all interest payments for
the life of the loan, any interest paid at closing, your
origination fee, and any other charges paid to the lender and/or
broker. Appraisal, credit report, and title search fees are not
included in the finance charge calculation.
|
|
| Financial Statement |
|
A financial report that
includes a balance sheet, income statement, and statement of
cash flows.
|
|
| Finder's Fee |
|
A fee or commission paid
to a mortgage broker for finding a mortgage loan for a
prospective borrower.
|
|
| FIRREA |
|
(Financial Institutions
Reform, Recovery and Enforcement Act of 1989). An act signed
into law in August 1989, by President Bush that restructured the
thrift regulatory an insurance system.
|
|
| First Mortgage |
|
The mortgage that is the
primary lien against a property and has first claim in the event
of default.
|
|
| Fixed Assets |
|
Assets that will not be
turned into cash within a year, such as manufacturing equipment,
real estate, or furniture. Also called "long-term assets."
|
|
| Fixed Installment |
|
The monthly payment due on
a mortgage loan.
|
|
| Fixed Second Mortgage |
|
See home equity loan.
|
|
| Fixed-Rate Mortgage (FRM) |
|
A mortgage in which the
interest rate does not change during the entire term of the
loan.
|
|
| Fixture |
|
Personal property that
becomes real property when attached in a permanent manner to
real estate.
|
|
| Floating Rate Mortgage |
|
See Adjustable Rate
Mortgage (ARM)
|
|
| Flood Insurance |
|
Insurance that compensates
for physical property damage resulting from flooding. It is
required for properties located in federally designated flood
areas.
|
|
| Foreclosure |
|
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.
|
|
| Foreclosure Bailout |
|
These are loans designed
to take the equity of your home or to refinance your home in
order to pay off existing loan payment lates that have gone into
default.
|
|
| Forfeiture |
|
The loss of money,
property, rights, or privileges due to a breach of legal
obligation.
|
|
| Foundation |
|
The concrete slab beneath
the property that holds the property in place.
|
|
| Front Ratio |
|
The proportion of a
purchaser's income that lenders will allow for principal,
interest, taxes, and insurance on a property. Used in the
evaluation of a loan application.
|
|
| Full Disclosure |
|
A requirement that sellers
fully disclose all known defects in a property when selling it.
|
|
| Full Recasting |
|
Setting the principal and
interest payments to the level that will fully amortize the
loan's outstanding balance over the remaining term using the
fully indexed accrual rate at the recasting point.
|
|
| 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.
|
|
| Fully Indexed Accrual
Rate |
|
The interest (accrual)
rate resulting from the index at closing (or at another point in
the loan) plus the lender's full spread, rounded as prescribed
in the loan documents (often to the nearest 1/8th of 1%).
|
|
| Future Acquired
Property |
|
A loan agreement may state
that the loan is a lien on all property presently owned or which
the borrower may acquire in the future.
|
|
| Future Interest |
|
A current interest in the
land, but only a future right to possession and enjoyment of the
land, such as a remainder interest, reversionary interest, etc.
|
|
| Garnishment |
TOP |
A legal proceeding under
which a person’s money in control of another, such as salary, is
taken for payment of a debt. The amount taken is set by stature,
and in most states, a judgment is necessary before garnishment.
|
|
| General Membership |
|
A partnership made up of
general partners, without special (limited) partners.
|
|
| General Warranty Deed |
|
A deed which conveys not
only all the grantor's interests in and title to the property to
the grantee, but also warrants that if the title is defective or
has a 'cloud' on it (such as mortgage claims, tax liens, title
claims, judgments, or mechanic's liens against it) the grantee
may hold the grantor liable.
|
|
| Georgian Architecture |
|
A colonial style of
architecture dating back to the eighteenth century.
Characterized by first floor windows extending to the ground,
its exterior placements (windows, doors, etc.) are simple and
well balanced, yet formal in appearance.
|
|
| Gerrymander |
|
To divide an area into
districts, against the obvious natural divisions, in order to
accomplish an unlawful purpose.
|
|
| Gift Letter |
|
A Gift Letter is a gift of
funds given to the borrower in order for them to purchase a
home. The letter must indicate that no repayment of the gift is
expected. The amount of the gift and the date the funds were
transferred should be indicated in the letter. The donor, with
the proper identification, can be from relatives, friends, an
employer, church, municipality, or non-profit organization. The
letter must include the donor's name, address, telephone number,
and relation to the borrower.
|
|
| Gifts |
|
Money received from a
relative or close friend to assist in the purchase of a home.
|
|
| Good Faith Deposit |
|
A deposit made by a
purchaser of property to show they are serious about the
purchase.
|
|
| Good Faith Estimate (GFE) |
|
A document that tells
borrowers an estimate of the settlement charges the mortgagor
incurs at closing. Under the requirements of the Real Estate
Settlement Procedures Act (RESPA), a borrower must receive a GFE
within three business days after the loan application is
received.
|
|
| Government Loans FHA /
VA |
|
Government loans are loans
that are guaranteed or purchased by government organizations.
Two of the most popular Government Loans are the Federal Housing
Administration (FHA) and the Department of Veterans Affairs
(VA).
|
|
| Government National
Mortgage Association (GNMA) |
|
A goverment-owned agency,
also known as "Ginnie Mae," that provides sources of funds for
residential mortgages. Guaranteed or insured by the Federal
Housing Administration (FHA) or the Veterans Administration
(VA).
|
|
| Grace Period |
|
A specified time
(typically 15 days) after a mortgage payment is due, in which
the lender will not charge a late penalty.
|
|
| Graduated Payment
Mortgage |
|
(GPM) A mortgage where the
payments are scheduled to increase, usually annually, for a set
number of years, and then level off. GPM can be used with either
a fixed or adjustable interest rate, and usually has a 30-year
term.
|
|
| Grantee |
|
That party in the deed who
is the buyer or recipient.
|
|
| Grantor |
|
The party in the deed who
is the seller or giver.
|
|
| Gross Income |
|
Total personal income,
before the deduction of taxes and expenses.
|
|
| Growing Equity Mortgage |
|
(GEM) A fixed rate,
graduated payment mortgage with small initial payments that
increase each year so that the loan pays off in a shortened
term, usually 15 years.
|
|
| Guarantee Mortgage |
|
A mortgage that is
guaranteed by a third party if the original party fails to pay.
|
|
| Guaranty |
|
To accept responsibility
for an obligation if the original party fails to pay or perform
according to a contract.
|
|
| Hard Equity |
TOP |
High interest rate
financing.
|
|
| Hard Money Lender |
|
A Lender that customarily
funds loans by private money sources and investors but not
banks. Interest rates and points can be higher.
|
|
| Hard Money Lenders |
|
Lenders that customarily
fund loans by private money sources and investors but not banks.
Interest rates and points can be higher.
|
|
| Hard Money Loan |
|
An equity based loan with
high interest rates and with flexible guidelines.
|
|
| Hazard Insurance |
|
Insurance to protect the
homeowner and the lender against physical damage to a property
from fire, wind, vandalism, or other hazards.
|
|
| Hedging |
|
The sale or purchase of
future mortgage contracts by a mortgage banker or lender for the
purpose of protecting cash transactions made at a future date.
|
|
| Heir |
|
The person who by law
receives the estate of a deceased person.
|
|
| Hereditaments |
|
Anything that may be
inherited or anything considered real property.
|
|
| Hidden Defect |
|
An encumbrance on a title
that is not apparent in the public records.
|
|
| Holdback |
|
A portion of a loan
commitment withheld until a specified event occurs, such as a
rental or construction.
|
|
| Home Equity Line of
Credit (heloc) |
|
A credit line that is
secured by a second deed of trust on a house. Equity lines of
credit are revolving accounts that work like a credit card,
which can be paid down or charged up for a pre-determined term,
usually 5 years, with interest payments only. After this term,
the loan becomes a fixed second and no more equity can be taken.
|
|
| Homeowner's Insurance |
|
An insurance policy that
combines liability coverage and hazard insurance.
|
|
| Homeowner's Warranty |
|
A type of insurance that
covers repairs to specified parts of a house for a specific
period of time.
|
|
| Homestead |
|
The home and property of
the head of the household. Some states allow statutory
exemptions that protect homestead property against the rights of
creditors.
|
|
| 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.
|
|
| Housing Starts |
|
The number of homes that
construction has began on. These figures are used to determine
the availability of housing, need for mortgage loans, and labor
and materials, etc.
|
|
| HUD |
|
(Department of Housing and
Urban Development). A cabinet department responsible for the
implementation and administration of government housing and
urban development programs.
|
|
| Hybrid Investment |
|
An investment that is a
combination of both debt and equity.
|
|
| Hypothecate |
|
Having pledged or
mortgaged a security without delivery to the lender.
|
|
| Impound |
TOP |
The portion of a
borrower's monthly payment that is held by the lender in order
to pay for taxes, hazard insurance, mortgage insurance, lease
payments, and other additional items.
|
|
| Improvements |
|
Any permanent improvements
to a structure such as buildings, streets, utilities, etc.
|
|
| Inchoate Instrument |
|
An unrecorded instrument,
such as a deed, which is valid only between the parties involved
but not as it would be after recording.
|
|
| Income Approach |
|
A method of appraising a
property that is based on the property’s anticipated future
income. The net income is established and then divided by the
estimated capitalization rate to arrive at a fair market value.
|
|
| Income Property |
|
Real estate developed or
improved to produce income.
|
|
| Index |
|
(Also called 'Rate
Index'). A regularly published rate, independent of the lending
institution, that measures the prevailing cost of funds, and is
used periodically with the margin to set AML accrual rates.
|
|
| Inflation |
|
An increase in the amount
of money or credit available in relation to the amount of goods
or services available, which causes an increase in the general
price level of goods and services. Over time, inflation reduces
the purchasing power of a dollar, making it worthless.
|
|
| Ingress and Egress |
|
Easements that give the
right to go in and out of a section of property, but not the
right to park on it.
|
|
| Inheritance Tax |
|
A tax on the transfer of
property from a deceased person, based on the right to acquire
the property rather than the property itself.
|
|
| Initial Borrower
Interest Rate |
|
The rate on which the
borrower's first payment is calculated.
|
|
| Initial Borrower
Payment Rate |
|
The annual interest rate
used to calculate the borrower's initial cash payment.
|
|
| Initial Interest Rate |
|
The original interest rate
of the mortgage at the time of closing.
|
|
| Insolvency |
|
When a debtor is unable to
meet his/her debt obligations.
|
|
| Installment |
|
A borrower's periodic
payment to a mortgage lender.
|
|
| Insurable Title |
|
A property title that a
title insurance company agrees to insure against defects and
disputes.
|
|
| Insured Mortgage |
|
A mortgage that is
protected by the Federal Housing Administration (FHA) or by
private mortgage insurance (MI). If the borrower defaults on the
loan, the insurer must pay the lender the lesser of the loss
incurred, or the insured amount
|
|
| Interest Accrual Rate |
|
The percentage rate at
which interest accrues on the mortgage. In most cases, it is
also the rate used to calculate the monthly payments, although
it is not used for an adjustable-rate mortgage (ARM) with
payment change limitations.
|
|
| Interest Only Loans |
|
These are short term loans
whose only payment is on the interest, not on the principle loan
amount.
|
|
| Interest Rate |
|
The percentage of an
amount of money, which is paid for its use for a specified time.
|
|
| Interest Rate Cap |
|
A provision of an ARM
limiting how much interest rates may increase per adjustment
period.
|
|
| Interest Rate Ceiling |
|
For an adjustable rate
mortgage (ARM), the maximum interest rate, as specified in the
mortgage note.
|
|
| Interest Rate Floor |
|
For an adjustable rate
mortgage (ARM), the minimum interest rate, as specified in the
mortgage note.
|
|
| Interim Financing |
|
Short-term financing
issued during the completion of a building or project, in
anticipation of longer-term financing.
|
|
| Interpleader |
|
A court action which may
be filed in an existing case to be the initial action. A neutral
third party holding funds that are in dispute would file an
interpleader.
|
|
| Investment Banker |
|
An individual or
institution that operates as an underwriter or agent for
corporations issuing securities, but that does not accept
deposits or make loans. In addition, most investment bankers
maintain broker/dealer operations, maintain markets for
previously issued securities, and offer advisory services to
investors.
|
|
| Investment Property |
|
A property that is not
occupied by the owner. Also known as non-owner occupied (NOO).
|
|
| Investor |
|
An individual or
organization that invests in mortgages.
|
|
| Involuntary Conversion |
|
When a property is taken
by eminent domain, the owner can convert the money from the
condemned property into real property without paying taxes on
the gain. This is for a period up to 3 years.
|
|
| Jetty |
TOP |
A pier or other structure
built out into a body of water. Pier and post is a fairly common
foundation for properties partially on water.
|
|
| Joint and Several Note |
|
Two or more parties who
are responsible for the entire amount of the debt.
|
|
| Joint Appraisal |
|
An appraisal done by more
than one appraiser, but with one appraiser stating the
conclusion of all.
|
|
| Joint Tenancy |
|
A form of co-ownership
that gives each tenant equal interest and equal rights in the
property, including the right of survivorship.
|
|
| Judgment |
|
A Court act creating or
affirming an obligation, such as a debt. The court may place a
lien against the debtor's real property as collateral for the
judgment's creditor.
|
|
| Judgment Lien |
|
An unpaid, court-ordered,
monetary judgment against a current or previous property owner.
|
|
| Judgment Proof |
|
Someone who a judgment
creditor cannot collect due to no assets.
|
|
| Judicial Foreclosure |
|
A type of foreclosure
proceeding used in some states that is handled as a civil
lawsuit and conducted entirely under the auspices of a court.
|
|
| Jumbo Mortgage |
|
The current loan limit for
a conforming loan is $333,700. Loans for amounts above $333,700
are considered non-conforming or jumbo mortgages.
|
|
| Just Compensation |
|
When an owner receives the
fair market value of a property that is taken by the government.
|
|
| Key Tenants |
TOP |
Any tenant contributing
revenues of 30% or more of the total revenue for a particular
property.
|
|
| Kicker |
|
A payment to a lender in
addition to the ordinary fixed-interest payments. It may include
an equity position in a property or a percentage participation
in the income stream.
|
|
| Laches |
TOP |
An unreasonable delay by a
party making a claim or bringing an action, so that the rights
of said party are waived.
|
|
| Land Development |
|
A loan for the acquisition
of raw land in anticipation of future zoning and development.
|
|
| Late Charge |
|
The penalty a borrower
must pay when a payment is made a stated number of days (usually
15) after the due date.
|
|
| Lateral Support |
|
The landowner has the
right to the natural support of his land by adjoining land. The
adjoining landowner does not have the right to change his land
so as to cause the support to be weakened or removed.
|
|
| Lease |
|
A written agreement
between the property owner and a tenant that stipulates the
conditions under which the tenant may possess the real estate
for a specified period of time and rent.
|
|
| Lease-Purchase Mortgage
Loan |
|
A financing option that
allows low and moderate income buyers to lease a home with the
option to buy. Each month's payment includes principal,
interest, taxes, and insurance (PITI) on the first mortgage,
plus an additional amount that accrues in a savings account and
is used for a down payment.
|
|
| Leasehold Estate |
|
A way of holding title to
a property wherein the mortgagor does not actually own the
property but rather has a recorded long-term lease on it.
|
|
| Leasing Commission
Reserve Funds |
|
set aside on a monthly
basis to pay leasing commission necessary to release vacant
space during the term of the loan.
|
|
| Legal Description |
|
A property description,
recognized by law that is sufficient to locate and identify the
property without oral testimony.
|
|
| Lender |
|
An institution that makes
loans to borrowers on real estate.
|
|
| Lender Margin |
|
The profit the lender
anticipates to receive from the loan.
|
|
| Lenders |
|
Institutions that make
loans to borrowers on real estate.
|
|
| Letter of Credit |
|
A written statement
permitting an individual to draw on a bank, or stating that the
bank will honor their credit up to the stated amount.
|
|
| Letter of Intent |
|
A written statement
expressing that a buyer or developer is interested in a
property. The letter is not legally binding.
|
|
| Liabilities |
|
A person's financial
obligations. Liabilities include long-term and short-term debt,
as well as any other amounts that are owed to others.
|
|
| Liability Insurance |
|
Insurance coverage that
offers protection against claims alleging that a property
owner's negligence or inappropriate action resulted in bodily
injury or property damage to another party.
|
|
| Lien |
|
Any claim against a
property, including mortgages, unpaid taxes, or repair bills, or
other unpaid charges. Prospective property buyers conduct a
title search to determine whether any liens against the property
exist. A lien must be filed or recorded with the local county
government to be attached to a property title.
|
|
| Lifetime Cap |
|
A provision of an
adjustable rate mortgage (ARM) that limits the total increase in
interest rates over the life of the loan.
|
|
| Lifetime Payment Cap |
|
For an adjustable-rate
mortgage (ARM), a limit on the amount that payments can increase
or decrease over the life of the mortgage.
|
|
| Line of Credit |
|
An agreement by a
commercial bank or other financial institution to extend credit
up to a certain amount for a certain time to a specified
borrower.
|
|
| Liquid Asset |
|
A cash asset or an asset
that is easily converted into cash.
|
|
| Lis Pendens |
|
A legal notice of action
given when a lawsuit is pending.
|
|
| Loan |
|
A sum of borrowed money
(principal) that is generally repaid with interest.
|
|
| Loan Application |
|
A non-binding agreement
between a lender and a prospective borrower showing the terms
they are going to submit to the underwriter for approval. A cash
deposit is usually part of the agreement.
|
|
| Loan Closing |
|
The end of the process of
purchasing or refinancing a home. Often done at a title company
where the documents are signed, recorded, and the loan funded
usually within 3 days of signing the legal closing documents.
|
|
| Loan Commitment |
|
Formal offer by a lender
stating the terms under which it agrees to loan money to a
homebuyer.
|
|
| Loan Origination |
|
The process by which a
mortgage lender brings into existence a mortgage secured by real
property.
|
|
| Loan Policy |
|
A title insurance policy
that insures a mortgagee or beneficiary under a deed of trust
against loss caused by invalid title.
|
|
| Loan Servicing |
|
The collection of mortgage
payments from borrowers and related responsibilities of a loan
servicer.
|
|
| Loan-to-Value |
|
A ratio calculated by
dividing the mortgage amount by the value of the property. A
lender will often use the lower of the purchase price or the
appraised fair market value when the loan is used to purchase a
property.
|
|
| Local Housing Authority |
|
A government agency that
monitors and executes community housing development programs.
|
|
| Lock |
|
The period, expressed in
days, during which a lender will guarantee a rate.
|
|
| Lock Period |
|
The amount of time that a
lender will guarantee a loan's interest rate. Once you've locked
in the interest rate on a loan, the lender will guarantee that
rate for a certain period of time, usually for 30, 45, or 60
days.
|
|
| Lockout Period |
|
A period of time after the
loan is originated during which a borrower cannot prepay the
mortgage loan.
|
|
| London Inter-Bank Offer
Rate (LIBOR) |
|
The rate of interest that
the largest international banks charge each other for loans.
|
|
| Long Term Financing |
|
A mortgage or deed of
trust that lasts at least ten years or more.
|
|
| Long Term Lease |
|
A lease with a term of
five or more years.
|
|
| Lot Size |
|
The total square footage
of a property.
|
|
| Manufactured |
TOP |
Homes that are built off
site and are on their own steel under carriage with wheels and
axles and pulled to the site. They are usually doublewide or
triplewide, but can be singlewide. If put on a permanent
foundation with wheels and axles removed, it is taxed as “real
property.”
|
|
| Manufactured
Construction Loan |
|
A loan provided for the
development of a manufactured property, specifically home
transport, removal of the axles and wheels, permanent foundation
development, etc…
|
|
| Margin |
|
(Also called 'Spread').
The number of percentage points a lender adds to the index value
to calculate the adjustable rate mortgage (ARM) interest rate at
each adjustment period. A representative margin would be 2.75%.
|
|
| Market Approach |
|
A method of appraising a
property by comparing sales prices of similar properties that
have recently sold.
|
|
| Market Value |
|
The price as determined by
buyers and sellers in an open market.
|
|
| Marketable Title |
|
A title that is free and
clear of objectionable liens, clouds, or other title defects. A
title which enables an owner to sell his property without
encumbrances.
|
|
| Master Association |
|
A homeowners' association
in a large condominium or planned unit development (PUD) project
that is made up of representatives from associations covering
specific areas within the project. In effect, it is a
'second-level' association that handles matters affecting the
entire development, while the 'first-level' associations handle
matters affecting their particular portions of the project.
|
|
| MAT |
|
Monthly Average Treasury
index.
|
|
| Maturity |
|
The date on which the
principal balance of a loan, bond, or other financial instrument
becomes due and payable.
|
|
| Mechanic's Lien |
|
Any payment owned to a
contractor for work done on the property.
|
|
| Merged Credit Report |
|
A credit report that
contains information from three credit repositories. When the
report is created, the information is compared for duplicate
entries. Any duplicates are combined to provide a summary of
your credit.
|
|
| Metes and Bounds |
|
A way of describing the
boundaries of land by courses, directions, distances, and
monuments.
|
|
| Mile |
|
A linear measurement equal
to 5280 feet on land and 6076 feet across water.
|
|
| Mini Perm |
|
Short-term financing,
usually three to six years.
|
|
| Mobile Home |
|
Usually within a home
park, and generally a single to doublewide. It can be a triple
wide with wheels and axles not removed, therefore taxed as a
moving vehicle.
|
|
| Modular |
|
Pre-fabricated at a
factory, then moved to site and onto a permanent foundation (no
under carriage, wheels, or axles).
|
|
| Money Market Account |
|
A savings account that
provides bank depositors with many of the advantages of a money
market fund. Certain regulatory restrictions apply to the
withdrawal of funds from a money market account.
|
|
| Money Market Fund |
|
A mutual fund that allows
individuals to participate in managed investments in short-term
debt securities, such as certificates of deposit and Treasury
bills.
|
|
| Monthly Payment
Mortgage |
|
A mortgage that requires
payments once a month to reduce debt.
|
|
| Mortgage |
|
A legal document that
pledges a property to the lender as security for a payment of a
debt.
|
|
| Mortgage Banker |
|
A banker who originates,
sells, and services mortgages in the secondary mortgage market.
|
|
| Mortgage Bankers
Association of America (MBA) |
|
A trade organization of
the mortgage bankers and brokers in the United States. They
provide seminars and publications for its members and sponsors.
|
|
| Mortgage Broker |
|
An individual or company
which brings borrowers and lenders together for the purpose of
loan origination, but which does not originate or service the
mortgage.
|
|
| Mortgage Commitment |
|
A written notice from the
bank or other lending institution saying it will advance
mortgage funds in a specified amount to enable a buyer to
purchase a house.
|
|
| Mortgage Correspondent |
|
An authorized person who
represents a financial institution in a certain area for the
purpose of placing loans.
|
|
| 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.
|
|
| Mortgage Insurance
Premium |
|
The payment made by a
borrower to the lender for transmittal to HUD to help defray the
cost of the FHA mortgage insurance program and to provide a
reserve fund to protect lenders against loss in insured mortgage
transactions. In FHA insured mortgages this represents an annual
rate of one-half of one percent paid by the mortgagor on a
monthly basis.
|
|
| Mortgage Life Insurance |
|
A type of term life
insurance often bought by mortgagors. The amount of coverage
decreases as the principal balance declines. In the event that
the borrower dies while the policy is in force, the debt is
automatically satisfied by insurance proceeds.
|
|
| Mortgage Note |
|
A written agreement to
repay a loan. The agreement is secured by a mortgage, serves as
proof of indebtedness, and states the manner in which it shall
be paid. The note states the actual amount of the debt that the
mortgage secures and renders the mortgagor personally
responsible for repayment.
|
|
| Mortgage Reduction
Programs |
|
A type of accelerated
payment program where payments are made more frequently
(bi-weekly or weekly) rather than conventional monthly payments.
The net result may be a savings on the total interest paid.
|
|
| Mortgage Securities
Pool |
|
A method by which
securities backed by the value of real estate mortgages are
issued in the market for investment purposes.
|
|
| Mortgage Servicing |
|
The lender or company
acting for the lender, for a service fee, that manages the
mortgage by collecting payments, releasing the lien upon payment
in full, foreclosing if in default, paying taxes and insurance,
etc.
|
|
| 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.
|
|
| Multi-dwelling Units |
|
Properties that provide
separate housing units for more than one family, although they
secure only a single mortgage.
|
|
| Multi-family Mortgage |
|
A residential mortgage on
a dwelling that is designed to house more than four families,
such as a high-rise apartment complex.
|
|
| Negative Amortization |
TOP |
(Also called 'Deferred
Interest'). If the payments are too small to cover the interest
due on a loan, the remaining interest owed is added to the
outstanding loan balance, causing negative amortization.
|
|
| Net Cash Flow |
|
The income that remains
for an investment property after the monthly operating income is
reduced by the monthly housing expense, which includes
principal, interest, taxes, and insurance (PITI) for the
mortgage, homeowners' association dues, leasehold payments, and
subordinate financing payments.
|
|
| Net Effective Income |
|
Gross income less federal
income tax.
|
|
| Net Operating Income |
|
Gross income less vacancy
and collection loss, operating expenses and replacement
reserves. (NOI)
|
|
| Net Proceeds |
|
The amount of cash
received from the sale of the property, not including relevant
expenses.
|
|
| Net Worth |
|
The value of all assets,
including cash, less total liabilities.
|
|
| Niche Lender |
|
A specialized lender that
offers particular products to make loans to borrowers.
|
|
| Niche Lenders |
|
Specialized lenders that
offer particular products to make loans to borrowers.
|
|
| NINA (no income no
assets) |
|
This is a type of loan
documentation used when borrower's do not wish to disclose
income or assets, usually due to the complexity of the borrowers
income.
|
|
| No Cash-out Refinance
or Rate and Term Refinancing |
|
A refinance transaction in
which the new mortgage amount is limited to the sum of the
remaining balance of the existing first mortgage, closing costs
(including prepaid items), points, the amount required to
satisfy any mortgage liens that are more than one year old (if
the borrower chooses to satisfy them). No cash in hand allowed
beyond 1% of loan amount.
|
|
| No Income Verification
(no-doc) |
|
A loan that requires
little to no income verification.
|
|
| Non-Arms Length
Transaction |
|
When parties involved in a
real estate transaction have some relationship with one another.
ie; the borrower works for the lender.
|
|
| Non-Assumption Clause |
|
A mortgage clause
prohibiting the transfer of a mortgage to another borrower
without the approval of the lender.
|
|
| Non-Conforming Loan |
|
Also called a jumbo loan.
Conventional home mortgages not eligible for sale and delivery
to either Fannie Mae (FNMA) or Freddie Mac (FHLMC) because
borrower or property do not meet underwriting guidelines.
Non-conforming loans usually incur a rate and origination fee
premium. The current non-conforming loan limit is $252,700 and
above.
|
|
| Non-Liquid Asset |
|
An asset that cannot
easily be converted into cash.
|
|
| Non-Owner Occupant |
|
Investment ownership in
which a tenant, and not the owner, occupies the property.
|
|
| Non-recourse |
|
A loan that is secured by
collateral, usually property. If the borrower defaults, then the
issuer can seize the collateral, and the borrower is not
personally liable.
|
|
| Nonbearing Wall |
|
Any wall that separates
areas, but is not a weight bearing wall, such as the outer
walls.
|
|
| Nonexclusive Listing |
|
When a real estate broker
has an exclusive listing, but the owner can sell his property
without an agent and not be liable to pay a commission. This is
also called an agency agreement.
|
|
| Notarization |
|
When a Notary Public
certifies that someone signing a document has been properly
identified. The content of the document is not certified, just
the signature.
|
|
| 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.
|
|
| Note Rate |
|
The interest rate stated
on a mortgage note.
|
|
| Notice of Cessation |
|
Concerning a construction
project, a notice given that work has stopped. This is done to
accelerate the period for filing a mechanic’s lien.
|
|
| Notice of Default (NOD) |
|
A formal written notice to
a borrower that a default has occurred and that legal action may
be taken.
|
|
| Notorious Possession |
|
A requirement for adverse
possession, which is so open that it is assumed that the owner
has notice of the possession.
|
|
| Nuncupative Will |
|
A will given orally,
usually in a deathbed situation, before witnesses who later
testify to its authenticity.
|
|
| Oath |
TOP |
An affirmation that binds
someone legally and morally.
|
|
| Offset Statement |
|
A statement by a lien
holder to a buyer stating the balance due on existing liens
against the property being purchased.
|
|
| One-Year Adjustable |
|
A mortgage program where
the annual rate changes yearly.
|
|
| Open-End Mortgage |
|
A loan amount that can be
increased upon mutual agreement of the lender and the borrower.
|
|
| Operations and
Maintenance Plan Program |
|
A plan set forth to
mitigate and remedy a known or potential environmental issue for
instance, asbestos contamination. Oftentimes referred to as an
"O&M plan."
|
|
| Option |
|
The right to buy or sell
property or sign a contract, based upon certain terms and
conditions. Usually applicable to specific time frames during
which the 'option' may be exercised.
|
|
| Original Principal
Balance |
|
The total amount of
principal owed on a mortgage before any payments are made and
without added interest.
|
|
| 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 |
|
A property purchase
transaction in which the property seller provides all or part of
the financing.
|
|
| Owner Occupied |
|
'Owner Occupied' means the
property is the owner's primary residence.
|
|
| Ownership |
|
The right to enjoy and use
property to the exclusion of others.
|
|
| Participation |
TOP |
A mortgage where the
lender receives a percentage of the gross proceeds along with
the mortgage payments.
|
|
| Participation
Certificates |
|
A mortgage security rather
than a mortgage. The certificate is more readily marketable.
|
|
| Payment Adjustment
Period |
|
The length of time,
typically six months to a year, between changes to the AML
borrower's P&I payment.
|
|
| Payment Buy Down |
|
Payment buy downs occur
when a third party, typically a builder, pays part of the
initial P&I payments for a year or two, so that the borrower has
smaller payments and can qualify for the loan.
|
|
| Payment Cap |
|
A limit on the amount the
payment can be changed at the end of each Payment Adjustment
Period.
|
|
| Payment Discount |
|
In a payment discount, the
lender reduces the first year's interest rate to make the
mortgagor more attractive to borrowers.
|
|
| Payoff |
|
The full payment of an
existing loan or any other type of lien.
|
|
| Perfecting Title |
|
The process of eliminating
any adverse claims against a title.
|
|
| Periodic Payment Cap |
|
A limit on the amount that
payments can increase or decrease during any one-adjustment
period.
|
|
| Periodic Rate Cap |
|
A limit on the amount that
the interest rate can increase or decrease during any one
adjustment period, regardless of how high or low the index might
be.
|
|
| Personal Property |
|
Any property that is not
attached to real property.
|
|
| Physical Assessment |
|
Report Engineering and
physical assessment of the property. Completed in addition to
the appraisal.
|
|
| PITI |
|
Principal, Interest, Taxes
and Insurance are components of a mortgage payment.
|
|
| PITI Ratio |
|
The ratio used in mortgage
lending decisions that consists of the principal, interest, tax,
and insurance payment to the total gross income.
|
|
| Planned Unit
Development (PUD) |
|
A project or subdivision
that includes common property that is owned and maintained by a
homeowners' association for the benefit and use of the
individual PUD unit owners.
|
|
| Plat |
|
A map or chart of a lot,
subdivision or community drawn by a surveyor showing boundary
lines, buildings, improvements on the land, and easements.
|
|
| Pledged Account
Mortgage (PAM) |
|
Money that is placed in a
pledged savings account. This fund, and earned interest, is used
to reduce monthly mortgage payments.
|
|
| Points |
|
Charges levied by the
mortgage lender to obtain a better interest rate and usually
payable at closing. One point represents 1% of the mortgage loan
amount.
|
|
| Possibility of Reverter |
|
The term refers to the
chance that an estate will exist as some future time. An example
would be a property sold on the condition that it would be a
park, but if not used for that, it would revert back to the
seller who would then have a “possibility of reverter.”
|
|
| Power of Attorney |
|
A legal document that
authorizes another person to act on one’s behalf. A power of
attorney can grant complete authority or can be limited to
certain acts and/or certain periods of time.
|
|
| Pre-approval |
|
A process whereby a
potential home buyer secures a conditional credit approval
before making an offer on a home.
|
|
| Pre-paids |
|
Those expenses of property
which are paid in advance of their due date and will usually be
prorated upon sale, such as taxes, insurance, and interest.
|
|
| Pre-qualification |
|
The process of determining
how much money a prospective homebuyer will be eligible to
borrow before application.
|
|
| Premium |
|
The amount paid for a
property above the expected price, or the value of a mortgage or
bond in addition to its face amount.
|
|
| Prepayment |
|
Payment of mortgage loan,
or part of it, before due date.
|
|
| Prepayment Penalty
(PPP) |
|
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.
|
|
| Prescriptive Easement |
|
An easement granted by a
court based on the assumption that a written easement was given
after a period of continuous use of the land, although none
existed.
|
|
| Prime Rate |
|
The interest rates that
banks charge to their preferred customers.
|
|
| Principal |
|
The amount borrowed or
remaining unpaid. Also, that part of the monthly payment that
reduces the outstanding balance of a mortgage.
|
|
| Principal Balance |
|
The outstanding balance of
principal on a mortgage, which does not include interest or any
other charges.
|
|
| Private Mortgage
Insurance (PMI) |
|
Insurance provided by
nongovernmental insurers that protect 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%.
|
|
| Pro rate |
|
The allocation of
proportionate shares of certain expenses, such as interest, to
be paid by the buyer and seller at closing.
|
|
| Promissory Note |
|
A written promise to repay
a specified amount over a specified period of time.
|
|
| Property Classification |
|
A classification that a
lender gives to a property according to its age and needed
repairs.
|
|
| Property Tax |
|
Local tax assessed on the
market value of a property
|
|
| Public Auction |
|
A meeting in an announced
public location to sell property to repay a mortgage that is in
default.
|
|
| Purchase Agreement |
|
See Agreement of Sale.
|
|
| Purchase Money
Transaction |
|
The acquisition of
property through the payment of money or its equivalent.
|
|
| Quadrant |
TOP |
A measurement that is a
quarter section of a circle, also one of the quarters that is
created by two intersecting roads or streets.
|
|
| Qualification |
|
The process that
determines an applicant's financial ability to meet the terms of
the loan.
|
|
| Qualifying Ratios |
|
Guidelines applied by
lenders to determine how large a loan to grant a homebuyer.
|
|
| Quantity Survey Method |
|
A method of arriving at an
estimate of costs for new construction by a detailed estimate of
quantities of necessary building materials plus labor costs.
|
|
| Quarter Section |
|
A measurement of a quarter
of a section and contains 160 acres.
|
|
| Quietus |
|
The final disposition of a
debt or a claim.
|
|
| Quitclaim Deed |
|
A deed that transfers
whatever interest or title a grantor may have, without warranty.
|
|
| Radon |
TOP |
A radioactive gas found in
some homes that in sufficient concentrations could cause health
problems.
|
|
| Rate |
|
The annual rate of
interest on a loan, expressed as a percentage of 100.
|
|
| Rate and Term Refinance |
|
Paying off an existing
loan with the proceeds from a new loan, using the same property
as collateral.
|
|
| Rate Caps |
|
(Also called 'Interest
Rate Caps'). A limit on the amount of which the interest rate
charged, either at each adjustment period or over the life of
the loan.
|
|
| Rate Index |
|
An index used to determine
interest rate changes for certain adjustable rate mortgages
(ARM).
|
|
| Rate Lock |
|
A commitment issued by a
lender to a borrower or other mortgage originator guaranteeing a
specified interest rate for a specified period of time.
|
|
| Ratification |
|
The affirmation of a prior
act that was not legally binding and making it a legal effect.
|
|
| Raw Land |
|
Land without added
improvements such as sewers, utilities, streets, or structures.
|
|
| Real Estate |
|
Land and permanently
affixed items such as buildings, fences, etc.
|
|
| Real Estate Broker |
|
A middleman or agent who
buys and sells real estate for a company, firm, or individual on
a commission basis. The broker does not have title to the
property, but generally represents the owner.
|
|
| Real Estate Investment
Trust (REIT) |
|
A mutual fund that sells
shares of ownership and must be invested in real estate or
mortgages.
|
|
| Real Estate Market |
|
A market for potential
buyers or sellers of real property at a given time.
|
|
| Real Estate Owned |
|
(REO). A term frequently
used by lending institution as applied to ownership of real
property acquired for investment or as a result of foreclosure.
|
|
| Real Estate Settlement
Procedures Act (RESPA) |
|
A Federal law that
requires lenders to provide home mortgage borrowers with
information about known or estimated settlement costs.
|
|
| Real Property |
|
Land and appurtenances,
including anything of a permanent nature such as structures,
trees, minerals, and the interest, benefits, and inherent rights
thereof.
|
|
| Realtor |
|
A real estate broker or an
associate who holds active membership in a local real estate
board that is affiliated with the National Association of
Realtors.
|
|
| Rebate Compensation |
|
received from a wholesale
lender, which can be used to cover closing costs, or as
additional revenue for the broker. Loans with rebates often
carry higher interest rates.
|
|
| Recapture of
Depreciation |
|
Upon the sale of a
property, the amount of depreciation taken above straight-line
depreciation.
|
|
| Recasting |
|
Revision of the terms of
an existing mortgage to cure delinquency, such as extending the
loan or modifying the interest rate.
|
|
| Recission |
|
The cancellation or
annulment of a transaction or contract by the operation of a law
or by mutual consent.
|
|
| Reconveyance |
|
A transfer of title from a
trustee to the owner of real estate, when the title is held as
collateral, at the time the trust deed is paid in full.
|
|
| Recorder |
|
The public official who
keeps records of transactions that affects real property in the
area.
|
|
| Recording |
|
The noting in the
registrar’s office of the details of a properly executed legal
document, such as a deed, a mortgage note, a satisfaction of
mortgage, or an extension of mortgage, thereby making it a part
of the public record.
|
|
| Recording Fee |
|
Fee charged by a
government for entering into the public record a real estate
purchase or sale.
|
|
| Redemption |
|
A defeasable title to land
that is cancelled by a mortgage foreclosure or tax sale of the
property.
|
|
| Redemption Period |
|
The period of time allowed
during which an owner may buy back their foreclosed properties
by paying all delinquent mortgage payments, plus interest and
fees. The time period varies state by state.
|
|
| Refinancing |
|
The process of paying off
one loan with the proceeds from a new loan using the same
property as security.
|
|
| Rehabilitation Mortgage |
|
A mortgage created to
cover the costs of repairing, improving and acquisition of an
existing property.
|
|
| Rehabilitation Tax
Credit |
|
The Tax Reform Act of 1986
allows a 20% tax credit for rehabilitating historic structures
and 10% for buildings in service after 1936.
|
|
| Reinstatement |
|
Bringing a note, mortgage,
deed of trust, etc. from default to good standing.
|
|
| Release of Mortgage |
|
A document distributed by
the mortgagee when the mortgage loan has been paid in full.
|
|
| Remaining Balance |
|
The amount of principal
that has not yet been repaid.
|
|
| Remaining Term |
|
The original amortization
term minus the number of payments that have been applied.
|
|
| Renegotiable Rate
Mortgage |
|
See "Adjustable Rate
Mortgage (ARM)"
|
|
| Rent Step-Up |
|
An agreement in which the
rent increases every period for a certain amount of time or for
the duration of the lease.
|
|
| Repayment Plan |
|
An arrangement made to
repay delinquent installments or advances. Lenders' formal
repayment plans are called 'relief provisions.'
|
|
| Replacement Reserves
Funds |
|
A fund set aside from net
operating income (NOI) to pay eventual wear and tear of a
property. Amount is determined by property type. Normal reserves
on a multi-family would be $250-$350 per unit, and on retail
deals it is usually done by square foot.
|
|
| 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.
|
|
| Residual Income |
|
The amount of money
remaining after mortgage payment and all other debts are paid:
typically used with VA loans.
|
|
| Restraint of Alienation |
|
Any restriction placed
against the vesting/sale of a property. Some restrictions are
allowed, but must conform to the rule against perpetuities and
free right of an owner to sell.
|
|
| Restrictive Covenants |
|
Private restrictions
limiting the use of real property. Restrictive covenants are
created by deed and may 'run with the land,' binding all
subsequent purchasers of the land, or may be 'personal' and
binding only between the original seller and buyer. In the
determination of whether a covenant runs with the land, or is
personal property is governed by the language of the covenant,
the intent of the parties, and the law in the State where the
land is situated. Restrictive covenants that run with the land
are encumbrances and may affect the value and marketability of
title. Restrictive covenants may limit the density of buildings
per acre, regulate size, style, or price range of buildings to
be erected, or prevent particular businesses from operating or
minority groups from owning or occupying homes in a given area.
(This latter discriminatory covenant is unconstitutional and has
been declared unenforceable by the U.S. Supreme Court).
|
|
| Reverse Mortgage |
|
An arrangement in which a
homeowner borrows against the equity in his/her home and
receives regular monthly tax-free payments from the lender.
|
|
| Revolving Credit |
|
Open lines of credit that
are subject to adjustable payments in accordance with the
balance, such as credit cards.
|
|
| Revolving Liability |
|
A credit arrangement, such
as a credit card, that allows a customer to borrow against a
pre-approved line of credit when purchasing goods and services.
The borrower is billed for the amount that is actually borrowed
plus any interest due.
|
|
| Right of First Refusal |
|
A provision in an
agreement that requires the owner of a property to give another
party the first opportunity to purchase or lease the property
before he or she offers it for sale or lease to others.
|
|
| Right of Ingress or
Egress |
|
The right to enter or
leave designated premises.
|
|
| Right of Survivorship |
|
In joint tenancy, the
right of survivors to acquire the interest of a deceased joint
tenant.
|
|
| Right of Way |
|
Land set aside as an
easement or in fee, either by agreement or condemnation, to have
the right to be on or travel on.
|
|
| RTC (Resolution Trust
Corporation) |
|
Formed to resolve thrift
failures over the next three years and dispose of their assets
and liabilities.
|
|
| Rural Housing Service (RHS) |
|
A U.S. Department of
Agriculture program that provides various financing programs to
aid in the development of rural America.
|
|
| Safety Clause |
TOP |
A clause in a listing that
protects the broker from having buyer and seller wait until the
listing expires to make a deal, thereby avoiding paying the
commission.
|
|
| Sale/Lease Back |
|
When a lender purchases a
property and leases it back to the seller for a specified amount
of time.
|
|
| Sales Agreement |
|
See Agreement of sale.
|
|
| Sales Comparison
Approach |
|
A method of appraising a
property by comparing recent sales of comparable properties and
making the necessary adjustments for any differences.
|
|
| Satisfaction of
Mortgage |
|
A document distributed by
the mortgagee when the mortgage loan has been paid in full. Also
referred to as "release of mortgage."
|
|
| Savings and Loans |
|
Institutions that are
chartered to hold savings and make real estate loans, as well as
offer checking accounts, consumer loans, and other services
offered by banks.
|
|
| Seasoned Mortgage |
|
A mortgage where the
borrower has made consistent payments for a year or longer.
|
|
| Second Mortgage |
|
A mortgage that has rights
subordinate to the rights of the first mortgage holders. Can be
for purchase or refinance, concurrent or stand alone.
|
|
| Secondary Financing |
|
Any additional financing
liened against a property, after the primary or first lien. If
the property is foreclosed on, proceeds from the sale of the
property will be used to pay off the existing liens in the order
that they are recorded on the title. For that reason, a lender
considers secondary financing to be riskier than a first lien
position loan.
|
|
| Secondary Mortgage
Market |
|
The buying and selling of
existing mortgages.
|
|
| Self-Amortization |
|
Occurs when monthly
payments allow a loan to be repaid, including principal and
interest, over its terms without any balloon payments.
|
|
| Seller Carry-Back |
|
An agreement in which the
owner of a property provides secondary financing in combination
with a lender first.
|
|
| Seller Contributions |
|
Seller provided funds
include all allowable transaction costs to be paid by the
seller.
|
|
| Seller-Provided Funds |
|
(Also called 'Seller
Contributions'). Seller-provided funds include all allowable
transaction costs to be paid by the seller.
|
|
| Separate Property |
|
Real property that is
owned by one person exclusive of any interest of another person.
|
|
| Servicer |
|
The party who has entered
into an agreement with the insured to service a loan.
|
|
| Servicing Fee |
|
The monthly or yearly fee
made by a lender to the correspondent lender who originally made
the loan for the servicing of the loan. Servicing rights may be
bought or sold with the loan.
|
|
| Settlement (Closing) |
|
The process by which all
financial dealings and contractual arrangements are completed
for the buyer and seller. At the time of settlement, or closing,
all debts are paid, adjustments made, and money disbursed, and a
deed is prepared in the new owner's name.
|
|
| Settlement Costs |
|
See Closing Costs.
|
|
| Shared Appreciation
Mortgage (SAM) |
|
A mortgage in which a
borrower receives an interest rate below the market rate, in
return, the lender (or another investor) shares part of the
future property value appreciation.
|
|
| Simple Interest |
|
Interest that is
calculated only on the principle balance.
|
|
| Simple Premium |
|
A premium which provides
coverage for more than a year.
|
|
| Simultaneous Closing |
|
A first and second lien
position loans that close at the same time.
|
|
| Single Premium |
|
A premium which provides
coverage for more than a year.
|
|
| Singlewide |
|
A mobile home consisting
of one complete unit.
|
|
| Special Assessments |
|
A special tax imposed on
property, individual lots, or all property in the immediate
area, for road construction, sidewalks, sewers, streetlights,
etc.
|
|
| Special Lien |
|
A lien that binds a
specified piece of property, unlike a general lien, which is
levied against all one's assets. It creates a right to retain
something of value belonging to another person as compensation
for labor, material, or money expended in that person's behalf.
In some localities it is called 'particular' lien or 'specific'
lien. (See Lien).
|
|
| Special Warranty Deed |
|
A deed in which the
grantor conveys title to the grantee and agrees to protect the
grantee against title defects or claims asserted by the grantor
and those persons whose right to assert a claim against the
title arose during the period the grantor held title to the
property. In a special warranty deed, the grantor guarantees to
the grantee that he has done nothing during the time he held
title to the property which has, or which might in the future,
impair the grantee's title.
|
|
| Spread |
|
The difference between the
rate at which the money can be borrowed (wholesale) and the rate
at which it is loaned (retail). It can also mean the difference
between the price offered by a buyer and the price asked for by
the seller of a property.
|
|
| Stated Documented
Income |
|
Some loan products require
only that applicants 'state' the source of their income without
providing supporting documentation such as tax returns.
|
|
| Step-Rate Mortgage |
|
A mortgage program that
allows for the interest rate to increase on a particular
schedule. At the end of the specified period, the rate and
payments stay the same for the remainder of the loan.
|
|
| Stick Built |
|
A residential home that is
built on site, from the ground up, from a pre-determined set of
plans and materials.
|
|
| Sub-prime |
|
Credit with higher risk
characteristics, such as slow pays, bankruptcy, or collection
accounts.
|
|
| Sublease |
|
A lease agreement between
the lessee and a third party for a term no longer than the
remaining portion of the original lease.
|
|
| Subordination Agreement |
|
An agreement where a prior
lien agrees to take a lesser position to a new lien.
|
|
| Subprime Lender |
|
A Lender that makes loans
to borrowers on real estate who have credit with higher risk
characteristics, such as slow pays, bankruptcy, or collection
accounts.
|
|
| Subprime Lenders |
|
Lenders that make loans to
borrowers on real estate who have credit with higher risk
characteristics, such as slow pays, bankruptcy, or collection
accounts.
|
|
| Suburban |
|
A description of a town or
an unincorporated, developed area that has a close proximity to
a city. Largely residential and dependent on the closest city
for employment, etc.
|
|
| Super Jumbo Loan |
|
A loan amount that is over
1 million dollars
|
|
| Surface Rights |
|
The rights (easements) to
use the surface of the land. If subsurface rights are involved,
the right also to drill or mine beneath the surface.
|
|
| Survey |
|
1. A professional
examination of a property. A survey usually will reveal the size
of a property, its boundary distances, ground contours, and
where improvements or alterations have been made. 2. 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.
|
|
| Swap Spread |
|
Exchanging one asset or
liability for a similar asset or liability to either lengthen or
shorten maturities, or raise or lower coupon rates.
|
|
| Sweat Equity |
|
The equity produced by a
purchaser doing work on a property being built.
|
|
| Take Out Commitment |
TOP |
An agreement by a lender
to place a “long-term,” take out loan on a property after the
construction is complete.
|
|
| Take-back |
|
A loan made directly from
the seller to the buyer.
|
|
| Tax |
|
As applied to real estate,
an enforced charge imposed on persons, property, or income, to
be used to support the State. The governing body in turn
utilizes the funds in the best interest of the general public.
|
|
| Tax Base |
|
To determine the amount of
tax due. The assessed value of the property is multiplied by the
tax rate.
|
|
| Tax Deduction |
|
A tax deduction allowed by
the government and used to reduce taxable income. The government
allows certain deductions to be subtracted such as mortgage
interest.
|
|
| Tax Deed |
|
A deed on a property
purchased at public sale for the nonpayment of taxes.
|
|
| Tax Lien |
|
A type of lien placed on a
title when the owner has not paid property or assessment taxes
or other state and federal taxes.
|
|
| Teaser Rate |
|
An advertised very low,
but very temporary, introductory rate on an Adjustable Rate
Mortgage (ARM).
|
|
| Tenancy at Will |
|
A type of tenancy where a
person has possession by permission of the owner but without an
agreement for a fixed term.
|
|
| Tenancy by the Entirety |
|
A type of joint tenancy of
property that provides right of survivorship and is available
only to a husband and wife.
|
|
| Tenancy in Common |
|
A type of joint tenancy of
property without right of survivorship, each tenants portion of
ownership is distributable under will.
|
|
| Tenant Improvement
Reserves Funds |
|
Funds set aside on a
monthly basis to improve the property for current and or future
tenants.
|
|
| Tenant-Stockholder |
|
The obligee for a
cooperative share loan, who is both a stockholder in a
cooperative corporation and a tenant of the unit under a
proprietary lease or occupancy agreement.
|
|
| Term |
|
The period of time which
covers the life of the loan. For example, a 30 year fixed loan
has a term of 30 years.
|
|
| The Office of Thrift
Supervision (OTC) |
|
Charters federal thrifts,
serves as the primary federal examiner and regulator of federal
and state-chartered savings associations, and administers laws
governing savings and loan holding companies.
|
|
| Third Mortgage |
|
A mortgage that has rights
subordinate to the rights of the first and second mortgage
holders.
|
|
| Third-party Origination |
|
A process by which a
lender uses another party to completely or partially originate,
process, underwrite, close, fund, or package the mortgages it
plans to deliver to the secondary mortgage market.
|
|
| Title |
|
As generally used, the
rights of ownership and possession of particular property. In
real estate usage, title may refer to the instruments or
documents by which a right of ownership is established (title
documents), or it may refer to the ownership interest one has in
the real estate. 1. Evidence of the right of property ownership;
can be held solely, jointly, in common, in corporate, or
partnership form. 2. The evidence one has of right to possession
of land.
|
|
| Title Company |
|
A company that performs
and insures title searches. Usually selected by the seller, they
sometimes work as a lender's agent. Depending on the preferences
of the seller, buyer and others involved in the sale, the
closing might take place at the title company's offices.
|
|
| Title Insurance |
|
Protects lenders or
homeowners against loss of their interest in property due to
legal defects in title. Title insurance may be issued to a
'mortgagee's title policy.' Insurance benefits will be paid only
to the 'named insured' in the title policy, so it is important
that an owner purchase an 'owner's title policy', if he desires
the protection of title insurance.
|
|
| Title Plant |
|
The part of a title
company where data is kept and updated on the records of all
properties in a certain area and can be readily searched.
|
|
| Title Search or
Examination |
|
A check of the title
records, generally at the local courthouse, to make sure the
buyer is purchasing a house from the legal owner and there are
no liens, overdue special assessments, or other claims or
outstanding restrictive covenants filed in the record, which
would adversely affect the marketability or value of title.
|
|
| Total Debt Ratio |
|
Monthly debt and housing
payments divided by gross monthly income. Also known as Back-End
Ratio.
|
|
| Total Expense Ratio |
|
Total obligations as a
percentage of gross monthly income. The total expense ratio
includes monthly housing expenses plus other monthly debts.
|
|
| Trade Equity |
|
Equity that results from a
property purchaser giving his or her existing property (or an
asset other than real estate) as trade as all or part of the
down payment for the property that is being purchased.
|
|
| Transfer of Ownership |
|
Any means by which the
ownership of a property changes hands.
|
|
| Transfer Tax |
|
State or local tax payable
when title passes from one owner to another.
|
|
| Treasury Bill (T-Bill) |
|
A debt security issued by
the U.S. government with maturity of one year or less. Treasury
bills are exempt from state and local taxes.
|
|
| Treasury Index |
|
An index that is used to
determine interest rate changes for certain adjustable-rate
mortgage (ARM) plans.
|
|
| Triple-Net Lease |
|
A lease in which the
tenant pays rent as well as taxes, insurance, and maintenance.
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| Triplewide |
|
A type of manufactured
home that has 3 sections that are pulled to a site on their own
wheels and axles, then removed and placed on a permanent
foundation. Can be placed in a park or lot without removing
wheels and axles, but will be taxed as a moving vehicle.
|
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| Trust Deed |
|
Conveyance of real estate
to a third party that is to be held for the benefit of another.
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| Trustee |
|
A party who is given legal
responsibility to hold property in the best interest of or 'for
the benefit of' another. The trustee is one placed in a position
of responsibility for another, a responsibility enforceable in a
court of law.
|
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| Trustee in Bankruptcy |
|
One appointed by the court
and holds the property in trust for the creditors.
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| Trustor |
|
A borrower under a deed of
trust and is one who deeds their property to a trustee as
security for repayment.
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| Truth in Lending Act (TIL) |
|
A federal law that
requires a truth in lending statement to be disclosed on
consumer loans. The statement discolses certain facets of the
mortgage program such as the annual percentage rate (APR). The
law also includes the right of recession period that follows the
closings of refinances.
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|
| Two- to-Four Family
Property |
|
A property that consists
of a structure that provides living space (dwelling units) for
two to four families, although ownership of the structure is
evidenced by a single deed.
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| Two-Step Mortgage |
|
A type of adjustable rate
mortgage (ARM) that has a below-market interest rate for the
initial part of the mortgage (usually five or seven years), and
then an adjusted interest rate, usually market rate, for the
remainder of the mortgage.
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| U.S. Treasury Bill |
TOP |
T-bills that are
short-term securities with maturities up to one year. Issued by
the government at a discount from face value.
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| U.S. Treasury Bond |
|
Long-term securities with
maturities greater than 10 years.
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| U.S. Treasury Note |
|
Intermediate term
securities issued with 2,3,5, and 10 year maturities.
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| Unavoidable Cause |
|
An unpreventable happening
such as death, illness, papers lost, etc. that happens even with
reasonable care and prudence.
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| Underlying Financing |
|
A prior mortgage or deed
of trust on a land contract, mortgage, etc. on the same
property.
|
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| Underwriting |
|
The process of evaluating
a loan application to determine the risk involved for the
lender. Underwriting involves an analysis of the borrower's
credit worthiness and the quality of the property itself.
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| Undisclosed Principal |
|
One whose identity, in a
certain transaction, is not revealed by an agent.
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| Unencumbered Property |
|
A property that is free
and clear of debts or liens, such as a house without a mortgage.
|
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| Uniform Residential
Loan Application (1003) |
|
A standardized loan
application used for loan applications by all lenders.
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| Uniform Settlement
Statement |
|
Standard HUD Form 1 that
is required to be given to the borrower, lender, and seller at
or prior to settlement.
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| Unilateral Contract |
|
When one party makes a
promise, and the other party, who made no reciprocal promise,
may still be obligated by law or be given consideration.
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| Unity of Possession |
|
The joint tenants, in a
joint tenancy situation, have equal rights to possession.
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| Unmarketable Title |
|
Any title that contains
defects that would allow a person to be released from the
obligation of the purchase.
|
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| Unrecorded Instrument |
|
A deed, mortgage, etc.,
which is not recorded in the county recorder’s office and would
therefore not be protected under the statutes regarding
recording.
|
|
| Unsecured-loan |
|
A loan that is not backed
by collateral.
|
|
| Useful Life |
|
An appraisal that was done
for a property that is for sale must state the true economic
value of the structure in terms of years of use to the owner.
For purposes of taxation, the life set for depreciation.
|
|
| Usury |
|
An illegally high interest
rate charged on a loan.
|
|
| Variable Rate Mortgage
(VRM) |
TOP |
See "Adjustable Rate
Mortgage."
|
|
| Verification of Deposit
(VOD) |
|
An official document
issued by the borrower's financial institution that verifies the
borrower's financial status and account balances.
|
|
| Verification of
Employment (VOE) |
|
A document signed by the
borrower's employer that verifies the borrower's position and
salary.
|
|
| Vested |
|
Having the right to use a
portion of a fund such as an individual retirement fund.
|
|
| Veteran’s
Administration (VA) Loan |
|
A government loan for
qualifying veterans for owner occupied resident properties, and
administered by the Veterans Administration.
|
|
| Voluntary Lien |
|
A lien placed on a
property by the voluntary act of the owner, usually a 2nd or 3rd
mortgage.
|
|
| Waive |
TOP |
To abandon or surrender a
right, benefit, or claim.
|
|
| Walk-through |
|
The final tour of a home
prior to the sale closing, in which any defects are noted.
|
|
| Warehouse Fee |
|
A lender's fee for
temporarily holding a borrower's loan before it is sold on the
secondary market.
|
|
| Warranty |
|
A protection plan
generally paid for by the seller that protects the buyer against
major repair expenses and breakdowns. Warranties are assigned to
specific items, usually major appliances or systems on the
property.
|
|
| Warranty Deed |
|
A type of deed that
conveys fee title to real property.
|
|
| Wholesale Lender |
|
A Lender who works only
with mortgage brokers and takes completed loan packages and
underwrites them. They offer mortgage brokers discounted pricing
in return for the up-front work done by the mortgage broker.
|
|
| Wholesale Lenders |
|
Lenders who work only with
mortgage brokers and takes completed loan packages and
underwrites them. They offer mortgage brokers discounted pricing
in return for the up-front work done by the mortgage broker.
|
|
| Wild Interest |
|
Recorded interest that
cannot be traced in the chain of title. This can occur when an
incorrect legal description appears on a document. Also may
occur when a woman who changes her name through marriage after
acquiring property, and sells the property using her married
name only.
|
|
| Workout |
|
An attempt to resolve a
problematic situation, such as a bad loan.
|
|
| Wraparound Mortgage |
|
A mortgage that includes
the remaining balance on an existing first mortgage plus an
additional amount requested by the mortgagor. Full payments on
both mortgages are made to the wraparound mortgagee, who then
forwards the payments on the first mortgage to the first
mortgagee.
|
|
| Writ of Sequestration |
|
Taking custody of one’s
property, real or personal, to force compliance with a court
order.
|
|
| Yield |
TOP |
The ratio of investment
income to the total amount invested over a certian period of
time.
|
|
| Yield Maintenance |
|
A prepayment premium that
allows investors to obtain the same yield as if the borrower
made all scheduled mortgage payments until maturity.
|
|
| Yield to Average Life |
|
Yield calculation used,
instead of “Yield to Maturity” or “Yield to Call,” where books
are retired systematically during the life of the issue, as in
the case of a Sinking Fund, with contractual requirements.
|
|
| Yield to Maturity (YTM) |
|
A calculation used to
determine the rate of return an investor will receive on a bond
if it is held to its maturity date. YTM is considered a
long-term bond yield expressed as an annual rate. It takes into
account purchase price, redemption value, time to maturity,
coupon interest rate, and time between interest payments.
|
|
| Zero Lot Line |
TOP |
The construction of a
building on any of the boundary lines of a lot.
|
|
| Zoning |
|
The classification of
allowable land use by a government.
|
|
| 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 |
|
Whether you are refinancing or purchasing a home we will help you decide on the right mortgage home loan. FHA, VA, USDA, Fannie Mae, Freddie Mac. We specialize in financing in the state of Missouri focusing mainly on St. Charles, St. Louis, Chesterfield, Wildwood, Eureka, Town & Country, Kirkwood, O'Fallon, Wentzville, Troy, Warrenton, Pacific, Union, Arnold, Festus, Fenton, Florrissant, Maryland Heights, St. Louis City & Counties.
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