Glossary

A financial disclosure statement that lists funds received and expected at closing.

See Combined Loan To Value.

See Cost of Funds Index.

Assets that back a mortgage loan.

CLTV- The ratio of the total mortgage liens against the subject property to the lesser of either the appraised value or the sales price.

Money paid to a real-estate agent or broker by the seller (usually about 6 or 7 percent of the home’s sales price).

A formal offer by a lender to make a loan under certain terms or conditions to a borrower.

Interest paid on the original principal balance and on the accrued and unpaid interest.

A form of property ownership in which the homeowner holds title to an individual dwelling unit and an interest in common areas and facilities of a multi-unit project.

A mortgage loan amount under the maximum amount of loans that FNMA and FHLMC are legally allowed to buy. Maximum loan amount varies by county.

A federal agency that enforces laws that protect consumers of financial products and services such as mortgages, credit cards and deposit accounts.

An organization that handles the preparation of reports used by lenders to determine a potential borrower's credit history. The agency gets data for these reports from a credit repository and from other sources.

A condition that must be satisfied before a contract is legally binding before a sale can close.

The agreement between the buyer and the seller on the purchase price, terms and conditions of a sale.

A mortgage not insured by the FHA or guaranteed by the VA.

A provision in an ARM allowing the loan to be converted to a fixed-rate at some point during the term. Usually conversion is allowed at the end of the first adjustment period. The conversion feature may cost extra.

ARMs with the option of conversion to a fixed rate during a given time period.

The transfer of a deed, lease or mortgage.

An index of the weighted-average interest rate paid by savings institutions for sources of funds, usually by members of the 11th Federal Home Loan Bank District.

A document defining the use, requirements and restrictions of a property.

A report detailing an individual's credit history that is prepared by a credit bureau and used by a lender to determine a loan applicant's creditworthiness.

The possibility that a borrower may default on financial obligations.

A credit score measures a consumer's credit risk relative to the rest of the U.S. population, based on the individual's credit usage history. The credit score most widely used by lenders is the FICO® score, developed by Fair, Issac and Company. This 3-digit number, ranging from 300 to 850, is(...)

The ratio, expressed as a percentage, that results when the borrower’s monthly payment obligation on debts is divided by monthly gross income.