Mortgage Terms Defined
- A second trust that is collateralized by the borrower's present home allowing the proceeds to be used to close on a new house before the present home is sold. Also known as "swing loan."
- An individual or company that brings borrowers and lenders together for the purpose of loan origination.
- When the seller, builder or buyer pays an amount of money up front to the lender to reduce monthly payments during the first few years of a mortgage. Buydowns can occur in both fixed and adjustable rate mortgages.
- Market conditions that favor buyers. If there are more sellers than buyers in the market, buyers have ample choice of properties and can use that to negotiate lower purchase prices.
- 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.
- Limits how much the interest rate or the monthly payment can increase, either at each adjustment or during the life of the mortgage. Payment caps don't limit the amount of interest the lender is earning and may cause negative amortization.
- Limits on changes in ARM interest rates or monthly payments, either in an adjustment period or over the life of the loan.
- Consumer safeguards may limit the amount that monthly payments on an adjustable-rate mortgage may change. Because they do not limit the amount of interest the lender is earning, they may cause negative amortization.
- A refinance for more than the balance of the original mortgage. Extra funds are based on the borrowers equity in the property.
- A check whose payment is guaranteed because it was paid for in advance and is drawn on the bank’s account rather than the customer’s.
- See Covenants, Conditions and Restrictions
- The maximum allowable interest rate of an adjustable-rate mortgage.
- A document issued by the federal government certifying a veteran’s eligibility for a Department of Veterans Affairs (VA) mortgage.
- Document issued by local government agency stating that a property meets the requirements of health and building codes.
- A document issued by the Department of Veterans Affairs (VA) that establishes the maximum value and loan amount for a VA mortgage.
- Written opinion of the status of the title to a property, given by an attorney or a title company. This certificate does not offer the protection given by title insurance.
- Document given to veterans and reservists who have served 90 days of continuous active duty (including training time) which enables them to obtain lower down payments on certain FHA-insured loans. Obtainable through local VA office.
- A check drawn on the issuer’s account for funds that have been segregated by the bank, guaranteeing payment.
- See Consumer Finance Protection Bureau.
- A chronological order of conveyance of a property from the original owner to the present owner.
- The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage (ARM).
- A meeting held to finalize the sale of a property. The buyer signs the mortgage documents and pays closing costs. Also called "settlement."
- These are expenses - over and above the price of the property- that are incurred by buyers and sellers when transferring ownership of a property. Closing costs normally include an origination fee, property taxes, charges for title insurance and escrow costs, appraisal fees, etc. Closing costs(...)
- The form that itemizes the costs associated with purchasing a home. The computation of costs payable at closing that determines the seller’s net proceeds and the buyer’s net payment.