index
The unit established to help set an
adjustable rate mortgage (ARM)
interest rate cap
The most an adjustable rate mortgage
can raise within a specified period.
J
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jumbo loan
A loan amount above $240,000
K
L
lawsuit
A claim brought against you in a court
of law that has not been settled or
reduced to judgment.
liens
Any type of financial instrument secured
by your property. Life Insurance
Face Amount
Life insurance face amount refers
to the death benefit paid by a term
or whole life policy.
Life Insurance Net
Cash Value
Life insurance net cash value refers
to the amount that is available to
borrow against or is received if a
whole, universal life, or variable
life policy is cashed in.
loan amount
Amounts up to $240,000 are described
as conforming or within Agency guidelines
of FHLMC (Freddie Mac) or FNMA (Fannie
Mae). Amounts over $240,000 are described
as Jumbo loans and these loans must
meet the guidelines of the financial
institution that is buying the loan.
loan to value
The loan amount divided by the appraised
value.
lock
Guaranteeing an interest rate for
a set period of time.
M
market value
The actual sales price of a home under
normal circumstances
monthly rental income
Gross rental income if rental, averaged
over previous 24 months. Underwriters
will generally credit 75% of rental
income toward qualifying income.
mortgagee
The lender of money for the purchase
of real estate.
mortgagor
The borrower of money for the purchase
of real estate.
mortgage insurance
premium
An FHA loan requirement. A mortgage
insurance policy paid by the buyer
which insures that lenders making
FHA loans will be covered against
foreclosure up to the guaaranteed
amount.
mortgage lien amount
Amount of existing mortgage. Includes
principal, interest, taxes, insurance
and any homeowner's dues.
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negative amortization
(also know as "deferred interest")
The opposite of amortization. The
loan balance goes up instead of down
until the payments reach a fully-amortizing
level.
Net Gross Commissions/Month
Net commissions averaged over previous
24 months for qualifying. Your commissions
must be averaged over 2 years to be
considered monthly income. Commissions
earned for less than two years will
not be considered.
Net Rental Income
Rental income less expenses for this
property averaged over previous 24
months.
Net Worth of Businesses
Owned
Value of businesses you own after
liabilities are paid.
note
The signed obligation to repay a debt
or loan.
note rate
This is the rate quoted by the lender,
found on the rate screen, on which
the principal and interest of your
mortgage payment is based. This is
not the Annual Percentage Rate (APR).
O
origination fee
Is the fee the lender charges for
processing and underwriting the loan.
P
payment cap
the maximum amount a mortgage payment
can be.
permanent loan
(also called a "takout loan")
A long term mortgage, usually 10 years
or more primarily used to pay a construction
loan.
point
1% of the loan amount which increases
or equalizes the lenders' yield. A
borrower may choose to pay more "points"
in order to get a lower interest rate.
present market value
Estimated market value of this property.
principal and interest
Principal is the portion of the mortgage
payment that goes to reduce the outstanding
balance of the loan. Interest is the
portion of the mortgage payment that
goes to pay the finance charge on
the outstanding balance of the loan.
private mortgage
insurance
An insurance contract written by a
private corporation that protects
a portion of the loan to the mortgagee
against losses that might occur in
the event of default and/or foreclosure
on conventional loans.
property value
Your estimate of what you think your
home is worth based on the most recent
appraisal, assessed value, and comparable
home prices in your neighborhood.
In the case of a remodel, take the
purchase price or the most recent
appraisal and add the receipts for
the improvements to arrive at an estimated
value.
purchase price
Price you are paying for the home.
Q
R
refinance
Obtaining a new mortgage loan to replace
a previous one.
residual income
The amount of money left from the
borrower's gross monthly income after
mortgage and debt is subtracted.
retirement fund amount
Pension, profit sharing, employee
stock ownership plan, 401k or any
other type of retirement plan.
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second mortgage
A mortgage which is recorded after
a first mortgage. Subordinates to
the first mortgage.
T
teaser rate
A below market starting rate usually
found in conjuction with adjustable
rate mortages.
U
V
VA loan
A mortgage loan made to a qualified
veteran or reservist guaranteed by
the Veterans Administration.
W
X
Y
yield
A return on an investment.
Z
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