|adjustable-rate mortgage (ARM)
A mortgage whose interest rate changes periodically based on the changes in a specified index.
A financial statement that shows assets, liabilities, and net worth as of a specific date.
biweekly payment mortgage
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.
closing cost item
Community Home Improvement Mortgage Loan
consumer reporting agency (or bureau)
cost of funds index (COFI)
The legal document conveying title to a property.
|earnest money deposit
A deposit made by the potential home buyer to show that he or she is serious about buying the house.
effective gross income
electronic funds transfer (EFT)
Equal Credit Opportunity Act (ECOA)
|Fair Credit Reporting Act
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.
Fannie Mae’s Community Home Buyer’s Program
Federal Housing Administration (FHA)
float down option
|good faith estimate
An estimate of charges which a borrower is likely to incur in connection with a settlement.
Insurance protecting against loss to real estate caused by fire, some natural causes, vandalism, etc., depending upon the terms of the policy.
home equity line of credit
A published interest rate to which the interest rate on an Adjustable Rate Mortgage (ARM) is tied. Some commonly used indices include the 1 Year Treasury Bill, 6 Month LIBOR, and the 11th District Cost of Funds (COFI).
interest-only loan option
The current loan limit for a conforming loan is $417,000. Loan amounts of $359,651 and above are considered non-conforming or jumbo mortgages and are usually subject to higher pricing.
An encumbrance against property for money due, either voluntary or involuntary.
loan to value ratio (LTV)
The number of percentage points a lender adds to the index value to calculate the ARM interest rate at each adjustment period.
mortgage insurance (MI)
Negative Amortization, or “deferred interest,” occurs when the mortgage payment is less than a loan’s accruing interest. This causes a loan’s balance to grow instead of reduce or “amortize.”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 of various reasons, including loan amount, loan characteristics or underwriting guidelines. Non-conforming loans usually incur a rate and origination fee premium. The current non-conforming loan limit is $333,701 and above.
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.
The maximum rate increase for a specific period for a specific loan (ARM) only.
private mortgage insurance (PMI)
The ratio of your fixed monthly expenses to your gross monthly income, used to determine how much you can afford to borrow. The fixed monthly expenses would include PITI along with other obligations such as student loans, car loans, or credit card payments.
The annual rate of interest on a loan, expressed as a percentage of 100.
residential mortgage credit report (RMCR)
|seller carry back
An agreement in which the owner of a property provides financing, often in combination with an assumed mortgage.
|tenants in common
An undivided interest in property taken by two or more persons. The interest need not be equal. Upon death of one or more persons, there is no right of survivorship.
An interest rate that may change once an account opens.
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