Mortgage Glossary
Mortgage Glossary
Are you stuck with a jargon? Refer to this Mortgage Glossary by WGB Loans
Abandonment: This refers to the voluntary property surrender, owned or leased. This is done without naming any owner tenant as the successor of the property.
Absentee Owner: This refers to an owner of the property who does not reside at or manage the property owned.
Absolute Auction: This refers to an auction that involves the subject property to be sold to the highest bidder, notwithstanding the winning bid’s amount.
Abstract of title: This refers to a documented history of all the transactions regarding the title for a particular tract of land. It encompasses the period from the original source of title to the present time.
Acceptance: This refers to the agreement of a buyer or seller to enter into a contract. This agreement bounds the terms of the offer.
Account termination fee: This refers to a fee that may be charged if you pay in full and terminate your home equity line of credit during the first five years.
Additional principal payment: This refers to a payment made by a borrower exceeding the scheduled principal amount due for the purpose of reducing the outstanding balance on the loan, for saving the interest over the loan’s life, and/or for paying off the loan early..
Adjustable-rate mortgage (ARM): This refers to a mortgage that involves a possible change in interest rates and monthly payments during the loan’s life, in accordance with the fluctuation of an index. A low-interest rate may be charged by the lenders for the initial period of the loan. Usually, ARMs have a rate cap that limits the amount the rate of interest can change. This can be done both in an adjustment period and over the loan’s life.
Adjustment cap: This refers to a limit for how much a variable rate of interest can grow or fall in a single adjustment period.
Adjustment date: This is the date on which the rate of interest changes for an adjustable-rate mortgage (ARM).
Adjustment period: This refers to the time period between adjustment dates for an adjustable-rate mortgage (ARM).
Affordability analysis: A preliminary analysis of the ability of the borrower to afford the purchase of a house considering factors including income, liabilities, and funds available, and the kind of home loan, the insurance and the taxes for the house, and the estimated closing costs.
Amortization: This refers to the gradual cut in the principal amount owed on a debt. During the initial years of the loan, most part of each payment is directed toward the interest owed. During the last years of the loan, payment amounts are applied nearly exclusively to the outstanding principal.
Amortization table or schedule: This refers to a duration table or schedule that provides you a breakdown of the monthly payments into principal amounts and interest. You can make use of this schedule to calculate the principal amount you’ll be repaying in the course of your mortgage term.
Amortization term: This refers to the duration of time needed to amortize the loan, demonstrated in months. For instance, for a fixed-rate mortgage of 15 years, the term of amortization is 180 months.
Annual adjustment cap: This is a limit on the amount of the variable rate of interest on a loan that can rise or fall each year.
Annual Percentage Rate (APR): This is simply the annual cost of a loan to a borrower. Just like in the case of an interest rate, the APR is also demonstrated as a percentage. However, unlike a rate of interest, it encompasses other fees or charges (including mortgage insurance, discount points, and loan origination fees) to present the total cost of the loan.
Application fees: It is the non-refundable fees that you pay when applying for a loan. It includes charges for items such as a credit profile or a property appraisal.
Appraisal or Appraised Value: It is an informed estimate value of any property. A professional appraiser generally does the appraisal when an application for a loan is secured by a home.
Appraisal Contingency: A contingency in the sales contract to protect the buyer by ensuring that a property is valued at an amount that is equal to or greater than the offering price.
Appreciation: It is an increment in the property value with time. The location of the property, its condition, and the selling price are important factors for the appreciation of property. Appreciation causes an increase in home equity, which will increase the borrowing amount for a home equity line of credit.
Approved Term (after approval): Number of months that is required to pay off the entire loan. This term determines the total interest, payment amount, and the repayment schedule of the entire term of the loan.
Approved Term (before approval): Time required to pay off your loan. Based on the approved term, the payment amount, repayment schedule, and total interest to be paid are determined for a loan.
Assessed Value: It is the monetary value assigned to a property in order to measure applicable property taxes. The assessed value is ascertained by a public tax assessor.
Assignment: It is a procedure to transfer rights and contracts from one person to another.
Assumable Loan-: It is a loan that a buyer takes over from the seller of the property, with the approval of the lender without any change in terms of the loan.
Balance Sheet-: A financial statement that reflects your assets and liabilities in a financial year.
Balloon Loan: A loan that requires payment of small monthly installments for a specified period and then making a huge payment at the end of the loan repayment period.
Base Rate: This is the benchmark or Index rate used for pricing variable-rate loans, for example- auto loans, credit cards, and adjustable-rate mortgages.
Basis Point: It is a common unit of measure for interest rates and is equivalent to 1/100th of a percentage. For example, interest calculated as 50 basis points of 100,000$ will be 0.50% or 500.
Bond: A certificate of interest in debt with a maturity date. In real estate, it means a written obligation secured typically by a mortgage or a deed trust.
Break-even Point: This is the point where expenses are equivalent to the total income. It identifies the number of months it will take to recover the costs associated with paying for the discount point amount under consideration.
Bridge Loan: It is a loan taken by the borrower secured on his current property so that he closes the deal on the new property before his present property is sold.
Broker: A third party who helps the main parties negotiate with each other and helps arrange the funds. However, he himself does not lend money.
Brokerage Fees: Fees charged by the broker in lieu of his service for facilitating a transaction.
Buydown: A financing technique through which the buyer makes lump-sum prepayment of all or a portion of the mortgage to lower the periodic mortgage payment for the first few years or even its entire life.
Call Option-: A provision where the lender has the right to demand the full payment of a loan immediately after a specified time period or for some specific reasons.
Cap: A check on the increment of the variable interest rate. Adjustable-rate mortgages usually have both semi-annual rate caps as well as lifetime caps. Interest rate cap limits the increase in your payments during an adjustment period and over the life of the loan.
Cash available for closing: Funds available with the borrower to cover down payments and closing costs. If the lending guidelines demand that the borrower has cash reserves when the loan closes or requires that the down payments are made from specified sources, then the available cash with the borrower will not include cash reserves from those specified sources.
Cash to close: The total cash a homebuyer needs in hand at the time of closing the loan. Cash to close typically includes closing costs and down payments.
Cash-out refinances: This refinancing is usually taken on a property already owned, and the new loan amount is above and beyond the principal balance of the first mortgage, liens, and other related expenses. The excess amount is usually given in cash and is often used for home improvement, debt consolidation, and any other activity.
Ceiling rate: The maximum rate of interest that can accumulate on an adjustable-rate mortgage or any other variable rate loan.
Certificate of eligibility: A certificate issued by the federal government endorsing the eligibility of a veteran for a Department of Veteran Affairs (VA) loan.
Certificate of reasonable value (CRV): A document establishing the maximum value and loan amount for a VA loan issued by the Department of Veteran Affairs
Certificate of title: A statement stating who holds the title to a real estate based on the public record. The statement is issued by a title company or an attorney.
Chain of title: It is a sequential history of transfer of title of a property. The chain of the sequence begins with the earliest available document and ends with the most recent document.
Clear title: It is a title without any liens or disputes as to the legal ownership of the property.
Close: It is the date when you will sign and execute your new loan documents.
Closed: This indicates that no more action is required on the item.
Closing: This is the time and place of signing, dating, and notarizing all the documents of your loan.
Closing Costs: It is the settlement cost incurred while obtaining the loan. These costs may include attorney’s fees, discount points, appraisal fees, credit report charges, preparation of title fees, and title insurance fees. Closing costs are charged at around 3% of the total loan amount and are paid at the time of closing of the loan.
Closing Date: The date of the signing of new loan documents.
Closing Disclosure (CD): A closing document specifying important information such as interest rate, monthly installments, and closing costs. The borrower should have this disclosure with them no later than three business days before closing up on loan.
Closing statement: This statement is the account of funds that are given to both the buyer as well as the seller before the property is sold.
Co-borrower: A second person having equal rights as the original borrower. A co-borrower assumes complete responsibility for repayment and is fully liable under the terms of the loan.
COBRA (Consolidated Omnibus Budget Reconciliation Act): This act requires employers having more than 20 employees under them to take a group health care insurance plan available for 18 months at the expense of the employee. It allows employees to continue health insurance coverage even after leaving employment for reasons other than gross misconduct.
Coinsurance: It is the splitting off of risk among multiple parties. It depends upon the amount of policy and a specified percentage of the real value of the property during the time of loss.
Collateral: It is the asset against which a loan is secured, like a home or a car. In the case of a non-payment of the loan, the owner may lose ownership over the collateral.
Collection: The efforts made to convert a felonious loan into a current loan and filing required legal papers to bring the loan to a closure.
Combination loan: A loan that comprises two mortgages given by the same lender to the same borrower. It is generally helpful in avoiding higher rates of a jumbo first mortgage.
Combined liens: It is the combined interest on the principal amount and the accrued interest.
Compound interest: It is the combined interest on the principal amount and the accrued interest.
Conforming loan: It is a mortgage loan that conforms to the standard features of GSE guidelines.
Construction loan: A short term loan for the construction of a home.
Conventional loan: A home loan not insured by the federal government
Convertibility Clause: It is a provision to convert adjustable-rate mortgages to a fixed-rate loan at a designated time during the cycle of the loan.
Co-signer: An additional person signing on your loan documents and undertakes full liability of repayment but avails no benefit from the loan proceeds.
Cost of funds index (COFI): An index that determines interest rate changes for ARMs and variable rate loans.
Covenant: It is a promise made in the mortgage stating restraint on certain uses of the property, which will result in loss or closure of the property if the promise is violated.
Credit Bureau: It is an organization that collects, records, updates, and stores financial records of individuals who have availed credits and furnishes this information to the lenders for a fee.
Credit limit: It specifies the maximum amount that one can borrow in one line of credit.
Credit risk: It is the potential likelihood of a borrower to pay back the loan.
Credit score: It is a measure of the quality of a borrower’s credit. It helps in determining the credit risk of a borrower.
Cumulative interest: Total interest accrued.
Curtailment: A payment that decreases the principal balance left on the loan.
Debt consolidation: It is the use of one single loan to pay off multiple debts over a long period of time.
Debt-to-income ratio: It is the percentage of a borrower’s monthly income going towards the repayment of debt obligations.
Deed (warranty or quit-claim): It is a document certifying the legal transfer of property from the seller over to the buyer at the time of closing. This is required by the lender to verify that the borrower legally owns the property on which he is securing the loan.
Deed of trust: A document used in some states instead of a mortgage. A trustee is vested with the title of the property to secure a loan.
Default: It is the inability to make loan payments or to meet other terms of a loan.
Delinquency: Failure to furnish loan repayment on time.
Down payment: It is the initial cash amount you pay towards the purchase of an asset or property to bridge the gap between the purchase cost and your mortgage loan.
Draw: It is the procurement of advances on the available credit line.
Draw period: It is the period during which advances can be taken out from the available credit line.
Due-on-sale provision: It is a provision in the loan where if the borrower sells the home used as a security for the loan, the lender may then ask the borrower to repay in full the loan amount.
Earnest money: A deposit made by the buyer towards the down payment representing good faith.
Encumbrance: A limitation against real estate is an encumbrance. It is in the form of liens or licenses that restricts the owner’s right to transfer title to the property.
Equal Credit Opportunity Act (ECOA): It is a federal law that mandates lenders and creditors to give every individual an equal opportunity for obtaining loans without any discrimination on the basis of race, color, religion, sex, marital status, etc.
Equity: The difference between outstanding mortgages and any other liens on your house and its appraised value.
Escrow: It is an arrangement where a third party is enlisted to hold off money or any other paperwork on behalf of the buyer and the seller until the completion of the transaction.
Escrow impound account: This account is set up by the lender to pay off any additional expenses associated with the property, like taxes and insurance fees.
Escrow analysis: It is an audit of an escrow account to determine whether the account has sufficient funds to pay property-related expenses when due.
Fair credit reporting act (FCRA) A federal legislation that aims to promote fair and accurate reporting of credit histories by the credit bureaus.
Fair market value This is the price at which the transfer of property would take place between a potential buyer and seller, with both of them having access to relevant facts.
Fannie Mae It is a government-sponsored enterprise that purchases and securitizes mortgages to be made available to low- and moderate-income borrowers.
Fee Simple It represents the absolute ownership of real estate by a person who has the right to use that piece of real estate in any way he wants.
FHA home loan It is a type of loan issued by the Federal Housing Administration. The loan is insured by FHA and is issued only by an FHA approved lender.
FICO Fair Isaac Corporation is a credit scoring company. It produces credit scores for evaluating credit risk. The FICO credit score is inversely proportional to the credit risk of a borrower.
Finance charge It is the cost of the loan, which includes interest to be paid during the term of the loan and any other fees.
Fixed-rate mortgage A loan that comes with a predetermined rate of interest that is fixed for the entire period of the loan.
Fixed-rate loan option It is a choice available to borrowers allowing them to fix a certain rate of interest and payment options on a portion of their outstanding principal amount for a fixed term.
Floating rate This is the rate at which the lender has not guaranteed or committed to lending. The actual rate of interest will depend upon the available market price at the time of the loan.
Flood Certification A certificate declaring whether a property is located in the flood zone.
Flood insurance It is insurance that protects you against damages caused by floods. This insurance is required by law for properties located in the flood zone.
Forbearance It is an agreement between the lender and the buyer to temporarily suspend or delay a foreclosure. The payment of the principal amount is suspended for a fixed period, but the interest continues to accrue.
Foreclosure A legal process where the lender attempts to recover the payments for a loan from the buyer who has stopped making payments. This is typically done by selling the asset against which the loan was secured.
Forfeiture Confiscation of property, privileges, or rights due to a breach in the legal contract.
Form 1098 It is an Internal revenue service form used for reporting the total interest amount and points paid during the course of the previous year.
Freddie Mac Similar to Fannie Mae, this government-sponsored enterprise purchases home mortgages from smaller banks and creditors for resale in the secondary market.
Funding date The date on which the loan is disbursed to the borrower.
Good faith estimate (GFE) A form that provided in detail the estimated breakdown of mortgage payments due and the charges related to a home loan. It is provided by the lender to the borrower generally within three business days of the loan application.
Government loan This is a loan issued by FHA and guaranteed by the Veteran affairs’ department or Rural housing service.
Government National Mortgage Association (GNMA or Ginnie Mae) Federal government-owned enterprise that provides special assistance loan programs, which were formerly the responsibilities of Fannie Mae.
Home equity line of credit (HELOC) It is a line of credit secured on a borrower’s home equity. A usual HELOC is for a 30 years term, which includes a 10-year draw period and 20 year repayment period. It is most commonly drawn for education, medical, and home improvement expenses.
Homeowners insurance It is insurance to cover you against damages caused by fire, hurricanes, and other natural catastrophes. It is also known as Hazard insurance and generally protects you against theft, vandalism, and personal liability in case someone is hurt.
HUD A federal government agency, the Department of Housing and Urban Development, is the agency responsible for overseeing the implementation and administration of housing and urban development programs.
Impounding It is the process of placing money in an escrow account to pay for the borrower’s property taxes and insurance premiums as and when they become due.
Index It is a measure of the change in the annual percentage rate at the beginning of each adjustment period. The subtraction and addition margin often equals the new rate that will be effective.
Inflation rate It is the rate at which the price of consumer goods increases or decreases over a specific time period.
Initial advance It is the advance amount that you may obtain on your available line of credit.
Initial draw amount The aggregate of the home equity line of credit and construction mortgage advanced by the lender on the initial draw date.
Initial rate It is the interest rate at the beginning of the term.
Inquiry It is a request made by the borrower for his credit report made by him or the company offering him credit.
Installment loan It is a loan that needs to be repaid in fixed periodic installments.
Insurance binder A temporary document that serves as proof of insurance stating that the insurance is in effect temporarily.
Insured Mortgage A mortgage where the lender is insured against defaults by the borrower.
Interest accrual rate It is the rate at which the interest accumulates on the mortgage. It is used to calculate the monthly installments.
Interest-only loan It is similar to a balloon loan where your periodic payment decreases, and at the end of the loan period, you will have to pay a larger sum.
Interest rate buydown A financing technique through which the buyer makes lump-sum prepayment of all or a portion of the mortgage to lower the periodic mortgage payment for the first few years or even its entire life.
Interest rate cap It is a limit on how much interest can increase during a specific period. It puts a limit on the variable interest rate fluctuations. Most home mortgages have semi-annual and lifetime caps, which puts a cap on the increase in payments in one adjustment period or over the entire duration of the loan.
Investment property A property used for the purpose of sale or generating income from rent.
JudgmentJudgment refers to a decree by a court of law that an individual is indebted to another individual for a specified amount.
Jumbo LoanIt is a type of loan in which the loan amount exceeds the requirements to be purchased by Fannie Mae and Freddie Mac standards. In such a case, the lenders of the loan may put certain restrictions or add some extra charges due to the large loan amount.
LiabilitiesLiabilities refer to an individual’s debt or financial obligations. These include short- and long-term debt. These may also include potential losses from legal claims.
LIBORLondon Interbank Offering Rate. It is an index usually used for some adjustable-rate mortgages (ARMs).
LienLien refers to the legal claim of a creditor on the subject to the borrower’s property. The lien is made to be used as security for a debt.
LienholderA lienholder is an entity or a person who has put a lien on real property.
Lifetime adjustment capIt refers to a limit that suggests the amount up to which the variable interest rate could rise throughout the loan’s term.
Line of credit The line of credit is an accord by a lender to provide credit up to a maximum limit for a specified period of time. In a home equity line of credit, the borrower’s home secures the line of credit.
Loan commitment It is a formal notification sent by the lender that states the conditional approval of a borrower’s loan.
The notification also comprises the terms of the lender under which he affirms to pay the loan.
Loan Estimate (LE) The loan estimate is a disclosure that makes customers understand the estimated mortgage costs and important loan terms before they make the final application. There are six key elements, viz, name, income, property address, social security number, estimated property value, and required loan amount, that a consumer has to submit. Once this submission is made, the lender is supposed to offer the loan estimate form. It is a mandate for all lenders to make use of the same standard loan estimate form. This is done so as to make it simpler for consumers to compare and purchase a mortgage.
Loan modification Loan modifications refer to one or more than one loan term.
Loan origination It is the process through which the lender makes a home mortgage and records a mortgage against the real property of the borrower as security for the loan’s repayment.
Loan-to-value ratio (LTV) It is the ratio between the principal amount of your loan that is unpaid and the appraised value of your collateral.
Lock period It refers to a time frame during which a mortgage lender keeps a particular loan offer open for the borrower. In this time frame, the borrower is supposed to prepare for closing, and the lender is supposed to process the loan application.
Manufactured housing Manufactured housing is a structure that’s either partially constructed or entirely constructed at some other location and transported onto the permanent foundation.
Margin The margin is the frequency of percentage points the lender subtracts from or adds to the index rate in order to find out interest rate adjustments. The margin remains locked and constant during the mortgage’s life and is mentioned in the promissory note.
Maturity date It is the date on which all the outstanding principal, fees, and interest are to be repaid.
Mobile home It is a unique type of residence that is built upon a wheeled chassis. This residence can be transferred from one site to another.
Modular home It is a unique factory-built residence that’s erected on-site. It has the characteristics and appearance of a site-built home.
Mortgage A mortgage is a legal document specifying a lien on a real estate to receive loan repayment to a lender. A mortgage loan typically runs from 10 to 30 years. After this time frame, the loan has to be completely paid off.
Mortgage insurance Mortgage insurance safeguards the lender in case the borrower defaults on the loan, in the event of a conventional loan. In case the down payment is below 20%, most lenders will ask you to pay mortgage insurance. This is also termed private mortgage insurance (PMI).
Multi-family residence (2 to 4 units) A multi-family residence is a residential property having 2 to 4 individual housing units (duplex, triplex, or quadplex).
Negative amortization Negative amortization is the end-result in the case when monthly payments fail to cover the interests due on the loan. The interest that remains is then added to the unpaid balance. The homebuyer becomes obliged with an amount more than the loan’s original amount.
Newline amount It is the sum total of the existing credit line and the additional credit requested.
No closing cost loan It is a type of loan in which the loan borrower isn’t required to cash out-of-pocket during the closing process for the usual costs of closing.
Nonowner occupied A nonowner occupied is a property in which the owner does not reside.
Note A note is a documented agreement in which the signer agrees to promise to pay to a named individual or entity a particular sum of money at a prespecified date or on-demand.
Note rate A note rate is the interest rate that’s stated in a mortgage note.
Notice of default A notice of default is a formal written notice to a borrower specifying a default and prompting legal action.
Option ARM The option ARM is a kind of adjustable-rate mortgage (ARM). It offers the borrower a chance to select between 4 monthly payment options to provide financial flexibility and make optimum use of the falling rate of interests.
Origination It refers to the date that the proceeds of a loan are paid out.
Origination date It is the date when a loan is funded or paid out.
Origination fee An original fee is a fee lender imposed fee to cover definite processing expenses in connection with making a mortgage loan. It is usually a very small percentage of the amount loaned.
Owner financing It is a transaction of property purchase in which the seller of the property provides all or a part of the financing.
Owner-occupied It is the property that is occupied by the owner as his principal residence.
Payment cap The payment cap is a limit on the amount a monthly payment can rise at a particular time.
Payment change date A payment change date is a date on which a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM).
Payoff Payoff refers to the full payment of a loan’s outstanding balance.
Per diem interest It refers to the interest amount that ensues daily on loan. It is estimated by multiplying the annual interest rate by the outstanding loan balance and then dividing the result by 365.
PITI It is an acronym for the four terms principal, interest, taxes, and insurance.
Points Points are the amount paid usually at the closing to the lender to drop the rate of interest.
Pre-Approval Pre-Approval refers to the conditional approval of the lender to lend a particular amount of money to a homebuyer under specified terms.
Prearranged refinancing agreement It is an informal or formal arrangement between a borrower and the lender in which the latter agrees to provide special terms for the purpose of a future refinancing as an inducement for the borrower to step in the original mortgage transaction.
Prepaid expenses These are the expenses that are typically paid in advance.
Prepaid interest It is the interest accumulated at the closing of a first mortgage, covering the period from the date of disbursement to the beginning of the next payment period.
Prepayment It is an amount of money paid to drop the principal balance of a loan prior to the principal getting due.
Prepayment penalty It is a penalty assessed by a few lenders if a loan is paid off prior to the specified term.
Prequalification The process in which a borrower provides financial information for the lender to preliminarily calculate the amount the former may obtain for the home purchase.
Qualifying ratios These are estimations that are made to use to determine if a borrower can qualify for a mortgage or not.
Rate It is the interest amount on the loan. It is demonstrated as a percentage.
Rate lock It is a commitment issued by a lender to a borrower that guarantees a particular rate of interest for a specified time period.
Rate reduction option It is a provision in a fixed-rate mortgage that gives the borrower the chance to drop the rate of interest at a later date without refinancing.
Reamortize The process of taking the remaining balance of a mortgage loan and establishing a new period of amortization, after which the principal balance will be zero. Usually used after the end of the term of an interest-only loan.
Rehabilitation loan A first mortgage that enables borrowers to purchase or refinance and rehabilitate homes. With this mortgage product, borrowers can qualify for loan amounts based on the as-completed value of the property, up to the maximum loan limits.
Repayment period The time you have to fully repay your outstanding balance, according to your payment terms. In a home equity line of credit, for example, the repayment period (typically 20 years) is the loan term that follows the draw period (typically 10 years).
Rescission It is the cancellation of a contract.
Reserves It is the amount of savings, apart from the down payment, that a homebuyer keeps aside in the events of unforeseen events or emergencies.
Right of first refusal It is a provision in an agreement requiring the owner of a property to give another party the first chance to buy or lease the property before she or he offers it for sale or lease to others.
Rural Housing Service (RHS) loan RHS is an agency under the Department of Agriculture. It is a loan provided by the RHS. The RHS offers finance to farmers and other qualified borrowers buying a property in rural areas who failed to obtain loans from anywhere else.
Second Home A second property owned by a person other than his/her primary residence.
Secured Loans A type of loan that makes the use of your financial assets like your car or home through which payment can be made to the lender, in case you don’t pay back the loan.
Security The collateral property pledged for a loan. The lender is allowed to sell the collateral to meet the debt in case the borrower defaults.
Settlement Agent A third party that helps in conducting settlement to transfer the title of the present property and closing the mortgage loan. It can be an attorney, title insurer, or an agent.
Settlement Costs Refer to Closing Costs
Short Sale It is an alternative used in place of foreclosure. A short sale comes in handy when a homeowner is unable to afford the mortgage loans, and their home is in less amount than what they own.
Single-family Residence A type of secluded property that shares no common ground with neighboring properties. It can, however, be a part of development units
Short Rate A type of rate that can be used for an adjustable-rate mortgage. Other terms denoted are intro rate or initial rate. You can avail of lower interest and monthly payment initially.
Subordinate Financing Any additional loan which can be purchased after your starting loan is deemed as a junior lien or subordinate mortgage.
Swing Loan See Bridge Loan.
Term The total number of years taken to pay a loan, which helps one in determining the payment amount, repayment methods, and total interest paid over the length of the loan.
Third-Party fees Fees charged by a third party for their services. These fees may include charges on services like an appraisal, credit report, title, and flood certification.
Title A kind of written evidence that states your complete ownership of a particular property.
Title Company An agency investigating the title of a property to look for discrepancies and only after that issues title insurance to the lender.
Title Insurance A type of insurance that protects a party, which can be either a lender or a borrower. It helps in sailing smoothly against legal hurdles that may come in the way of ownership of property.
Title Search For determining the legal ownership of a property, a title search guarantees examination of the records required to access all liens and encumbrances on the particular property.
Total Expense Ratio Refer to Debt- to Income Ratio.
Transaction Fee A fee charged on every credit line you draw from.
Treasury Index An index that determines interest rate changes in lieu of adjustable-rate mortgage plans. It comes I to force based on results of auctions as revealed by the Treasury Cell of USA\
Trustee A legal guardian that controls properties for the benefit of another.
Underwriter Approval or denial of a home loan rests with the underwriter.
Underwriting A process in which a lender decides whether to grant a loan to a potential borrower based on factors like credit, employment, assets
Uniform Residential Loan Application (1003)
Published by the Federal National Mortgage Association (FNMA), it is a standard loan application used by most lenders.
Unsecured lines of credit It is used when making reference to a loan or a line of credit that is not supported by collateral.
Unsecured Loan It is used when making reference to a loan or a line of credit that is not supported by collateral.
Upfront costs The costs which you need to pay while availing for a loan. These include loan application fees and closing costs, which some lenders require.
VA Loan A type of mortgage loan offered by the Department of Veterans Affairs (VA) to qualified veterans of the US. For further reference, see Government Loan.
Vacation Home A type of a single residential property occupied by an owner other than his/her primary residence A vacation home cannot be considered income-producing, and neither can it be a part of the rental pool.
Variable-rate A type of interest rate that may change periodically, and it is dependent on the prime rate. An increase or decrease in payments may be followed.
W-2 A wage and tax statement given by your employer on an annual basis. It includes details on your total income and local taxes withheld from your income.
Walk-through The last line of inspection before settlement to make sure the property remains in the same manner as before, at the time when the offer contract was written.
What-if analysis An analysis based on a possible what-if scenario. It comes in handy when you do not possess a complete date or in cases where you require to see changes in your income, liabilities, and other funds.
Where is this found? Your application number is mentioned in your Welcome Letter or other Bank credentials regarding a particular application.
Why do we ask for this? We protect your information when you provide the same through online modes. We are also able to verify your identity through the Social Security Number you have provided.
Windstorm Insurance A type of property insurance which covers your house and personal properties from windstorm damage. You may need this insurance in case your homeowners’ policy excludes wind damage.
Wire Transfer Money transfers from one individual’s bank to another individual’s, either domestically or internationally.
Year-end statement It is a type of at the end report indicating how much interest was paid during the year and also the remaining mortgage loan balance at the year’s end.