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Mortgage Terms Defined

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  • 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
    Money paid to an agent for entering the sale of a property into the public records.
  • Refianance
    Paying off one loan with the proceeds from a new loan using the same property as security.
  • Repossession (Foreclosure)
    Legal process by which the lender forces the sale of the property because the borrower has not met the mortgage terms.
  • Rescission
    The cancellation of a contract, permitted by law within three days of signing a mortgage not used to purchase a home.
  • Reserves
    See Escrow, Impound.
  • 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.
  • Sales Agreement
    A contract signed by buyer and seller stating the terms and conditions under which the property will be sold.
  • Satisfaction
    The payment of a debt which satisfies an obligation.
  • Second Mortgage
    A subordinate mortgage made in addition to the first.
  • Secondary Mortgage Market
    Where existing mortgages are bought and sold.
  • Security
    The property that will be pledged as collateral for a loan.
  • Seller Carry-Back
    An agreement in which the owner of a property provides financing, often in combination with an assumable mortgage. See Owner Financing.
  • Seller's Market
    Market conditions that favor sellers. With more buyers than sellers in a market, sellers have greater negotiating power as demand exceeds supply.
  • Servicer
    An organization that collects principle and interest payments from borrowers and manages borrowers’ escrow accounts. The servicer often services mortgages that have been purchased by an investor in the secondary mortgage market.
  • Servicer
    Closing - A meeting between buyer, seller and lender (and their agents) where property and funds legally change hands.
  • Simple Interest
    Interest that is computed only on the principal balance.
  • Standard Payment Calculation
    The method used to determine the monthly payment required to repay the remaining balance of a mortgage in substantially equal installments over the remaining term of the mortgage at the current interest rate.
  • Start Rate
    A pre-determined rate of interest that will be applied to the loan until the date of the first interest rate change.
  • Start-Rate Mortgage
    A mortgage that allows for the interest rate to increase according to a specified schedule (i.e., seven years), resulting in increased payments as well. At the end of the specified period, the rate and payments will remain constant for the remainder of the loan
  • Subsidized Second Mortgage
    Alternative financing option for low and moderate income borrowers that also includes a down payment and a first mortgage, with funds for the second mortgage provided by city, county or state housing agencies, foundations or non-profit corporations. Payment on the second mortgage is often(...)
  • Survey
    A measurement of land. Prepared by a licensed surveyor, showing a property’s boundaries, elevations, improvements and relationship to surrounding tracts.
  • Sweat Equity
    Value added to the property as a result of improvements made by an owner.
  • Tax Impound
    Money paid to and held by a lender for annual tax payments- See Impound and Escrow.
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