|ARM (Adjustable Rate Mortgage)|
A mortgage loan that allows the lender to adjust the interest rate in accordance with a specific index periodically and as agreed to at the inception of the loan.
|APR (Annual Percentage Rate)|
The cost of credit, expressed as a percentage rate per year.
The payment of a loan by periodic payments of principal and interest, resulting in a declining principal balance and eventual payment in full.
A person qualified by education, training, experience and license to estimate the value of real and personal property.
A mortgage that has level monthly payments that will fully amortize over a stated term, but which provides for a lump-sum payment to be due at the end of a specified term.
|Bridge or Swing Loan|
A form of second mortgage that is secured by the borrowers' 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.
|Cap (Interest Rate)|
Refers to the maximum allowable interest rate increase for adjustable rate mortgages.
In real estate, it includes the delivery of a Deed, Mortgage, financial adjustments, the signing of documents, and the disbursement of funds necessary to the sale or loan transaction.
The property that is pledged as security for a debt.
A detailed account of the credit, employment and residence history of an individual used by a prospective lender to help determine creditworthiness. Credit reports also list any judgments, tax liens, bankruptcies or similar matters of public record entered against the individual.
Calculations that are used in determining whether a borrower can qualify for a mortgage. They consist of two separate calculations: a monthly housing expense-to-income ratio and a total obligations-to-income ratio.
The difference between fair market (or appraised) value of a property and outstanding mortgage balances.
A trust account established to hold funds allocated for the payment of real estate taxes, insurance premiums, etc. as they are received each month and until such time as they are disbursed to pay related bills.
A mortgage that provides for only one interest rate for the entire term of the mortgage.
|Home Equity Line of Credit (HELOC)|
A loan secured by the equity value in a borrower's home, usually as a second mortgage. The funds are drawn as needed by using a special set of checks.
|Home Equity Loan|
A loan secured by the equity value in a borrower's home. The funds are disbursed in a lump-sum at closing.
A legal hold or claim of one person on the property of another as security for a debt or charge.
The relationship between the unpaid principal balance of the mortgage and the property's appraised value (or sales price, if it is lower).
The fees charged by a lender to prepare loan documents, make credit checks, inspect and sometimes appraise a property. The fees may be computed as a percentage of the face value of the mortgage.
|Private Mortgage Insurance (PMI)|
Insurance written by a private company protecting the mortgagee or investor against loss caused by default. Conventional loans with a LTV ratio greater than 80% must have PMI.