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Mortgage Terms Defined

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  • Tax Lien
    Claim against a property for unpaid taxes.
  • Tax Sale
    The number of years until a loan is due to be paid in full.
  • Third-Party Origination
    When 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
    A document that gives evidence of ownership of a property, as well as rights of ownership and possession.
  • Title Company
    A company that insures the title to the property.
  • Title Insurance
    Insurance that protects the lender (lender’s policy) or buyer ( owner’s policy) against loss due to disputes over property ownership.
  • Title Search
    Examination of municipal records to insure that the seller is the legal owner of the property and that there are no tax-liens or other claims against the property.
  • Total Expense Ratio
    Total obligations as a percentage of gross monthly income including monthly housing expenses plus other monthly debts.
  • Transfer Tax
    Tax paid when a title passes from one owner to another.
  • Treasury Tax
    An index used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. Based on the results of auctions that the U.S. Treasury holds for its Treasury bills and securities or derived from the U.S. Treasury's daily yield curve, which is based on the closing market(...)
  • Trust Account
    An account maintained by a broker or escrow company to handle all money collected for clients.
  • Trustee
    Someone given legal responsibility to hold property in the best interest of another.
  • Truth-In-Lending
    A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the annual percentage rate (APR) and other charges.
  • Two-Step-Mortgage
    An adjustable-rate mortgage (ARM) with one interest rate for the first five or seven years of its mortgage term and a different interest rate for the remainder of the amortization term.
  • Underwriting
    The process of evaluating a loan application to determine the risk involved for the lender. Underwriting involves an analysis of the borrower's creditworthiness and the quality of the property itself.
  • VA Mortgage
    A mortgage that is guaranteed by the Department of Veterans Affairs (VA). Also known as a government mortgage.
  • Verification of Deposit (VOD)
    A document signed by the borrower’s bank or other financial institution that verifies the borrower’s account balance and history.
  • Verification of Employment (VOE)
    A document signed by a borrower’s employer that verifies the borrower’s position and salary.
  • Verification of Rent (VOR)
    A document signed by a borrower’s landlord that verifies the borrower’s rental payments and history.
  • Waiver
    Voluntary relinquishment or surrender of some right or privilege
  • Walk-Through
    A final inspection of a home to check for problems that may need to be corrected before closing.
  • Wrap Around 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 "Wrap Around" mortgagee, who then forwards the payments on the first mortgage to the first mortgagee. These(...)
  • Zoning Ordinances
    Local laws that establish building codes and usage regulations for properties in a specific area. This creation of districts specifies different types of property uses, such as commercial, residential or mixed-use.
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