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Loan Signing
terms of loan signings
| Term | Definition |
|---|---|
| Borrower (Mortgagor) | An individual who applies for and receives funds in the form of a loan and is obligated to repay the loan in full under the terms of the loan. |
| Title | Title is the document that gives evidence of ownership of a property. Also indicates the rights of ownership and possession of the property. Individuals who will have legal ownership in the property are considered “on title” |
| Refinancing | The process of paying off one loan with the proceeds from a new loan secured by the same property. |
| Escrow Company | An escrow company is a licensed neutral third party that distributes legal documents and funds on behalf of a buyer and seller. |
| Escrow Agent | A person with fiduciary responsibility to the buyer and seller, or the borrower and lender, to ensure that the terms of the purchase/sale or loan are carried out. |
| Title Company | The title company makes sure that a piece of real estate is legitimate, then issues title insurance for that property that protects both the lender and the owner from lawsuits as a result of title disputes. |
| Title Insurance | Title insurance protects a lender against any title dispute that may arise over a particular property. It is required to close on your home. |
| Lender | The lender is the bank that is lending the money. |
| Deed of Trust & Rider | It records who actually owns the property. It records the amount the borrower is borrowing from the bank, also known as the lien amount. It records who is lending the money, also known as the lien holder. It records the legal description of the property |
| Principal | The amount of debt, not counting interest, left on a loan. |
| Note | The note is a fancy way of saying contract. The bank note is where the the borrower agrees to the terms of the loan. For example, the note would specify that the borrower is borrowing |
| Interest Rate | The interest rate is what the borrower agrees to pay back the bank on the money that is borrowed. |
| Loan to value | means how much you owe versus the value (appraised value or sale price, whichever is lower) of the home. |
| Fix Rate Note | This means the interest rates will not change for the duration of the loan. Whether that means 10, 15, 20 or 30 years. This allows the payment to stay the same for full amount of the term. |
| Adjustable Rate Mortgage Loans (ARM) | Unlike a fixed rate mortgage, an adjustable rate loan’s interest rate will change, often after a set amount of years of fixed payments. |
| Home Equity Line of Credit (HELOC) | A home equity line of credit is a line of credit that is tied to the equity of your house. |
| Reverse Mortgage | A reverse mortgage enables older homeowners (62+) to convert part of their equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. |
| Discount Points/Buy Down | Points are an up-front fee paid to the lender at the time that you get your loan to lower the interest rate You qualified for. You can literally buy down an interest rate. |
| Default | Lenders only lend on house if they have the right to take the house from the borrower if the borrower fails to pay back the loan on the terms that were agreed upon. |
| Foreclosure | If the borrower has not lived up to the terms of the loan the bank can foreclose on the house. Meaning that can take the home away from the borrower. The bank then owns the house not the borrower. |
| Lien | A lien is a form of security interest granted over a property to secure the payment of a debt. Anyone can put a lien against home as long as they have the homeowners consent. |
| Property tax | Property taxes are taxes that are due to the county the property resides. Usually due twice a year. |
| Impound Account/Escrow Account | The impound account and escrow account are the same thing. Some borrowers either request or are forced to have an impound account for taxes and insurance. |
| Amortization | Repayment of a loan with periodic payments of both principal and interest calculated to payoff the loan at the end of a fixed period of time. |
| Hazard Insurance | Protects the insured against loss due to fire or other natural disaster in exchange for a premium paid to the insurer. |
| PITI | Abbreviation for Principal, Interest, Taxes and Insurance, the components of a monthly mortgage payment. |
| FHA Loans | FHA loans are fixed- or adjustable-rate loans insured by the U.S. Department of Housing and Urban Development. |
| VA Loans | VA loans are fixed-rate loans guaranteed by the U.S. Department of Veterans Affairs. |
| Escrow Instructions | Escrow instructions simply describe escrow’s role and responsibility during the transaction to the borrower. |
| Escrow Amendment | If there are any changes made to the original escrow instructions, they are made via escrow amendments. |
| Closing Statement | The closing statement is the document that brings together all of escrow, title and the lender’s fees and puts them on one document for the borrower to see and approve |
| Insurance Information Sheet | This is where the borrower lets escrow know what insurance company that they use. Insurance company name, policy # and the insurance agent’s name and phone number. |
| Disbursement of Proceeds | If the borrower is due refund from closing this tell escrow how they would like to receive it. |
| Borrower Information Sheet | Just as the name implies, this is form that gives escrow all the information they need to open up escrow. |
| Payoff Demand | The payoff demand is also known as the payoff statement, which shows what the borrower owes their current lender. |
| Statement of Information | This is also known as the S.I. The S.I. is essentially an application for title insurance. |
| Grant Deed or Quitclaim Deed | A grant deed or quitclaim deed changes the way property title is held. |
| Trust Certification | The trust certification is a document that proves that a borrower has an established valid trust, in lieu of actually providing the whole entire trust |
| P.C.O.R. | PCOR stands for Preliminary Change of Ownership Report. This helps the county understand what is going on with the grant deed or quitclaim deed. |
| Subordination Agreement | , a subordination agreement tells everyone that the loans in the subordinate position stay in the same lien position even though the lien above it has been paid off. |
| Insurance | Insurance refers to the borrower’s homeowners insurance or also know as hazard insurance. Homeowners insurance covers anything that may happen to the home like a fire, flood or anything can happen to the structure of the house. |
| Power of Attorney | The Power of Attorney is also known as an Attorney in Fact. This is when someone has given another person authority to sign on their behalf. |
| Purchase Contract | it is the contract between the buyer and seller on the terms of the sale. |
| Receipts | Home buyers are required to put down a monetary deposit to open escrow. It shows the seller that the buyer is serious about buying the home. Escrow will show proof of this deposit via a receipt or also know as proof of deposit |
| Payoff (purchase) | The payoff in a purchase transaction is the same as payoff for a refinance. It shows how much someone owes on a current mortgage. |
| Termite report | This is a report that tells the homeowner and the lender if there are any termites found on the property. |
| Lender’s Instructions | The Lender’s instructions (sometimes called Closing Instructions) are literally typed out instructions to the escrow and title companies from the lender on exactly how the lender wants their loan closed. |
| 1003 Loan Application | is call ten-oh-three |
| Notice of Right to Cancel | In a refinance transaction on a primary residence, the borrower gets three business days (not including Sunday's and some holidays) from the day they sign loan documents to cancel the loan if they want. |
| Closing Disclosure | Also known as the CD, the Closing Disclosure replaces what they used to call the truth in lending form. And just like the old form implies this is what informs the borrower about everything pertinent about the loan. |
| 4506 | The borrower signs this form to give permission to lender so the lender can request and receive a copy of the borrower's taxes that are filed with the IRS. |
| Occupancy Affidavit | This tells the lender whether the property being bought or refinanced is a primary residence, second home or investment property. |
| California Domestic Partnership Addendum to Uniform Residential Loan Application | Some states recognize domestic partnerships as if two people are married. This form tells the lender if they do or do not have a domestic partner. |
| Borrower Certification and Authorization | This form gives permission to lender to confirm employment, have their assets, credit report and financial records in their possession. |
| Hazard insurance Authorization and Requirements | Homes that have mortgages have to have hazard insurance. This form also allows the lender to be the loss payee recorded on the hazard insurance. |
| W-9 | Interest paid on loans is tax deductible. This allows the borrower to write off the interest on their taxes. |
| Acknowledgment of Receipt of Appraisal Report | If there was an appraisal completed the borrower has the right to a copy. By the borrower signing this form they are confirming they have a copy. |
| Compliance Agreement | This form informs the borrower if anything else need to be signed before the loan funds, the borrower will comply with any requests. |
| Consumer Credit Disclosure | The borrower has the right to know their credit score. This form gives the borrower their credit scores. |
| The Housing Financial Discrimination Act of 1977 Fair Lending Notice | This says the borrower was not discriminated against. |
| Hazard Insurance Disclosure | The max amount of insurance coverage the lender can force to borrower to have is replacement cost of the house. Not the appraised value. |
| California Impound Disclosure/Waiver | This form says whether the borrower has to have an impound/escrow account or if they request to have one or decline to have one. |
| California per Diem Interest Disclosure | The Borrower has to pay interest the day the loan funds. This page tells the borrower how much interest they per day(aka per diem). |
| Signature Affidavit and AKA Statement | The borrower signs this confirming their signature is their signature. |
| Contact verification form | The borrower confirms all contact information the lender has for them is correct. Mailing address, phone #’s, etc. |
| Counseling Checklist for Military Home Buyers | On VA loans the VA is letting the veteran know if they miss any payments, home counseling may be required |
| USA Patriot Act | This is where the notary signing agent records for the lender the ID information used to identify the borrower. |
| Federal Equal Credit Opportunity Act Notice | This lets the borrower know that credit score was a determining factor on their approval. |
| Flood Insurance Coverage Subject to Change Disclosure | The lender is letting them know that if they are ever to be rezoned as a flood zone they will be required to have flood insurance at that time. |
| Initial Escrow Account Disclosure Statement | This form shows how the impound account will look in the next 12 months. |
| Mailing Address Certification | This form lets the lender know exactly where the borrower prefers the bill. |
| Consumer Credit Score Disclosure | This page tells them what their scores were. This is not the full report. Just the scores. |
| Notice Concerning the Furnishing of Negative Information to the Consumer Reporting Agency | This form states if the borrower misses a mortgage payment, it will be reported and negatively affect their credit score |
| Notice to VA Loan Borrowers | VA loans are assumable (see mortgage definitions above if you don't know what this is). This is the form that lets the veteran know this. |
| Payment Letter to Borrower | This form is two different forms in one form for most lenders. First and foremost it tells the borrower what their full payment is including their impound account, if they have one (the note only shows you what the principal and interest is). |
| Payoff Schedule/Amortization Table | This shows every payment for the duration of the loan. Breaking down every payment into what goes to principal and what goes to interest. |
| Quality Control Release and Authorization to Re-verify | This lets the borrower know there may be a survey asking how the loan officer did. This is how the lender does quality control. |
| Federal Collection Policy Notice | This lets the borrower know how the lender will or will not share their information. |
| Acceleration Clause | A common provision of a mortgage or note providing the holder with the right to demand that the entire outstanding balance is immediately due and usually payable in the event of default. |
| Adjustment Interval | The length of time between changes in the interest rate or monthly payment on an ARM loan. |
| Agreement of Sale | Contract signed by buyer and seller stating the terms and conditions under which a property will be sold. |
| Alternative Documentation | A method of documenting a loan file that relies on information that the borrower is likely to be able to provide instead of waiting on verification sent to third parties for confirmation of statements made in the application. |
| Amortization schedule | A timetable for payment of a mortgage showing the amount of each payment applied to interest and principal and the remaining balance. |
| Amount Financed | This figure is used to calculate your APR. It represents your loan amount minus any prepaid finance charges and assumes you will keep the loan to maturity and make only the required monthly payments. |
| Annual Percentage Rate (APR) | APR represents the total cost of credit on a yearly basis after all charges are taken into consideration. |
| Application Fee | Fee charged by a lender to cover the initial costs of processing a loan application. |
| Appraisal | An appraisal is a written analysis of the estimated value of your property. |
| Appraisal Fee | A fee charged by a licensed, certified appraiser to render an opinion of market value as of a specific date. |
| Assessed Value | The valuation placed upon a property by a public tax assessor for the purposes of taxation. |
| Assignment | The transfer of ownership, rights, or interests in property by one person, the assignor, to another, the assignee. |
| Assignment Recording Fee | The Assignment Fee covers the cost of recording this transfer at the local recording office. |
| Assumption | A method of selling real estate where the buyer of the property agrees to become responsible for the repayment of an existing loan on the property. |
| Balloon Mortgage | Balloon mortgage loans are short-term fixed-rate loans with fixed monthly payments for a set number of years followed by one large final balloon payment for all of the remainder of the principal |
| Bankruptcy | A proceeding in a federal court to relieve certain debts of a person or a business unable to pay its debts |
| Beneficiary | A person named to receive a benefit from a trust. A contingent beneficiary has conditions attached to his rights, usually someone else must die first. |
| Bequest | A gift of personal property by will. |
| Blanket Mortgage | A mortgage that covers more than one parcel of real estate. |
| Broker | An individual who brings buyers and sellers together and assists in negotiating contracts for a client. |
| Broker Processing Fee | The fee charged to you to have your file packaged and handed over to a selected lender. |
| Buy-Down | When the lender and/or the home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. |
| Buyer's Market | Market conditions that favor buyers. With more sellers than buyers in the market, sellers may be forced to make substantial price concessions. |
| Caps (interest) | Consumer safeguards that limit the amount the interest rate on an adjustable rate mortgage can change in an adjustment interval and/or over the life of the loan. |
| Caps (payment) | Consumer safeguards that limit the amount monthly payments on an adjustable rate mortgage may change. |
| Cash Out | Any cash received when you get a new loan that is larger than the remaining balance of your current mortgage, based upon the equity you have already built up in the house. |
| Cash reserve | A requirement of many lenders that buyer have sufficient cash remaining after closing to make the first two mortgage payments. |
| Cashier's Check (or Bank Check) | A check whose payment is guaranteed because it was paid for in advance and is drawn on the bank's account instead of the customer's. |
| Ceiling | The maximum allowable interest rate of an adjustable rate mortgage. |
| Certificate of Eligibility | Document issued by the Veterans Administration to qualified veterans and that verifies a veteran's eligibility for a VA guaranteed loan. |
| Certificate of Reasonable Value (CRV) | An appraisal issued by the Veterans Administration showing the property's current market value |
| Certificate of Title | Written opinion of the status of title to a property, given by an attorney or title company. This certificate does not offer the protection given by title insurance. |
| Certificate of Veteran Status | FHA form filled out by the VA to establish a borrower's eligibility for an FHA Vet loan. Obtainable through local VA office by submitting form DD 214 (Separation Paper) with form 26-8261a (request for certificate of veteran status). |
| Chain of Title | The chronological order of conveyance of a property from the original owner to the present owner. |
| Clear title | A title that is free of liens and legal questions as to ownership of the property. |
| Closing (or Settlement) | The settlement or closing is the conclusion of your real estate transaction. It includes the delivery of your security instrument, signing of your legal documents and the disbursement of the funds necessary to the sale of your home or loan transaction. |
| Closing Costs | Also known as settlement costs, these costs are for services that must be performed to process and close your loan application. |
| Collateral | Assets (such as your home) pledged as security for a debt. |
| Commission | Money paid to a real estate agent or broker for negotiating a real estate or loan transaction. |
| Commitment | A promise to lend and a statement by the lender of the terms and conditions under which a loan is made. |
| Comparables | An abbreviation for “comparable properties”; used for comparative purposes in the appraisal process. Comparables are properties like the property under consideration; |
| Compound Interest | Interest which is calculated not only on the initial principal but also the accumulated interest of prior periods. |
| Comparative Market Analysis | An informal estimate of market value that a real estate agent or broker calculates based on sales of comparable properties. |
| Condominium | A real estate project in which each unit owner holds title to a unit in a building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas. |
| Conforming Loan | A mortgage loan that meets all requirements to be eligible for purchase by federal agencies such as Fannie Mae and Freddie Mac. |
| Consumer Reporting Agency | A company that regularly gathers, files and sells information to creditors to facilitate their decisions to extend credit. |
| Construction Loan | A short term interim loan for financing the cost of construction. The lender advance funds to the builder at periodic intervals as the work progresses. |
| Contingency | A condition that must be satisfied before a contract is legally binding. |
| Contract of Sale | The agreement between the buyer and seller on the purchase price, terms and conditions of a sale. |
| Conventional Loan | Loans that are not made under any government housing program; they are not subject to the restrictions of government housing programs, such as loan size limits. |
| Conversion Clause | A provision in some ARMs that allows you to change an ARM to a fixed-rate loan, usually after the first adjustment period. The new fixed rate will be set at current rates, and there may be a charge for the conversion feature |
| Convertible ARMs | A type of ARM loan with the option to convert to a fixed-rate loan during a given time period. |
| Conveyance | The document used to affect a transfer, such as a deed, or mortgage |
| Covenant | A written agreement or restriction on the use of land or promising certain acts |
| Credit Bureau | A credit bureau is a clearinghouse for credit history information |
| Credit Report | A report detailing the credit history of a prospective borrower that's used to help determine borrower creditworthiness |
| Credit Score | A statistical method of assessing your creditworthiness. |
| Debt-to-Income Ratio | The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her net effective income (FHA/VA loans) or gross monthly income (conventional loans). |
| Deed | Legal document with which title to real property is transferred from one owner to another. The deed contains a description of the property, and is signed, witnessed, and delivered to the buyer at closing. |
| Deed of Trust | A legal document that conveys title to real property to a third party. The third party holds title until the owner of the property has repaid the debt in full |
| Default | Failure to meet legal obligations in a contract, including failure to make payments on a loan. |
| Delinquency | Failure to make payments as agreed in the loan agreement. |
| Down Payment | The amount of your home's purchase price you need to supply up front in cash to get your loan. |
| Due-on-Sale Clause | Provision in a mortgage or deed of trust allowing the lender to demand immediate payment of the loan balance upon sale of the property. |
| Duplex | Owner occupied property for more than one family |
| Earnest Money | Deposit made by a buyer towards the down payment in evidence of good faith when the purchase agreement is signed. |
| Encryption | This is a procedure used in order to prevent anyone but the intended recipient from reading the data. |
| Equifax | One of the three largest credit bureaus in the United States |
| Equal Credit Opportunity Act (ECOA) | Federal law requiring creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs. |
| Equity | The difference between the current market value of a property and the total debt obligations against the property. On a new mortgage loan, the down payment represents the equity in the property. |
| Escrow | A transaction in which a third party acts as the agent for seller and buyer, or for borrower and lender, in handling legal documents and disbursement of funds. |
| Escrow Account | An account held by the lender to which the borrower pays monthly installments, collected as part of the monthly mortgage payment, for annual expenses such as taxes and insurance |
| Estimated Closing Fees | An estimate of the fees that must be paid on or before the closing date by the buyer and/or seller for services, taxes and items necessary to obtain mortgage |
| Experian | One of the three largest credit bureaus in the United States |
| Fair, Isaac and Co. | The company that invented credit-scoring software. |
| Fannie Mae | This agency buys loans that are underwritten to its specific guidelines. These guidelines are an industry standard for residential conventional lending. |
| FDIC | Federal Deposit Insurance Corporation (FDIC) Independent deposit insurance agency created by Congress to maintain stability and public confidence in the nation's banking system. |
| Federal Housing Administration (FHA) | A federal agency within the Department of Housing and Urban Development (HUD), which insures residential mortgage loans made by private lenders and sets standards for underwriting mortgage loans. |
| Fee Simple | Absolute ownership of real property. |
| Federal Reserve Board | The 7-member Board of Governors that oversees Federal Reserve Banks, establishes monetary policy (interest rates, credit, etc.), and monitors the economic health of the country. |
| FICO | The most common credit-scoring model used by lenders, it is also known as a Fair, Isaac score. Your FICO can range from 200 to 900. |
| Filing Fees | The amount charged by public officials in your area for recording your mortgage and other documents. |
| Finance Charge | Your finance charge is the total of all the interest you would pay over the entire life of the loan, assuming you kept the loan to maturity, as well as all prepaid finance charges |
| First Mortgage | A mortgage that is in first lien position, taking priority over all other liens. In the case of a foreclosure, the first mortgage will be repaid before any other mortgages. |
| Fixed Rate | An interest rate that is fixed for the term of the loan. |
| Float | Until you request to secure a lender's quoted interest rate, the interest rate will continue to change, or float, due to market fluctuations. |
| Flood Insurance | Insurance that compensates for physical damage to a property by flood. |
| Flood Life of Loan Coverage | Flood zone determinations may change from time to time. The “Life of Loan Coverage” fee allows us to track any changes in your property's flood zone status over the life of your loan. |
| Forbearance | The act by the lender of refraining from taking legal action on a mortgage loan that is delinquent. |
| Good Faith Estimate | Written estimate of the settlement costs the borrower will likely have to pay at closing. Under the Real Estate Settlement Procedures Act (RESPA), |
| Grace Period | Period of time during which a loan payment may be made after its due date without incurring a late penalty. |
| Guideline Ratios | There are two guideline ratios used to qualify you for a mortgag. As known as Front End or Back End |
| Homeowners Insurance | Homeowners insurance is required by all lenders to protect their investment, and must be obtained before closing. |
| Impound Account | Also known as an Escrow Account it is an account held by the lender to which the borrower pays monthly installments, collected as part of the monthly mortgage payment, for annual expenses such as taxes and insurance. |
| Index | An index is a widely published rate such as LIBOR, T-Bill, or 11th District Cost of Funds (COFI). |
| Initial Cap | Consumer safeguard that limits the amount the interest rate on an adjustable rate mortgage can change during the first adjustment period. |
| Initial Rate | The rate charged during the first interval of an ARM loan |
| Insurance | The type of insurance(s) required for your loan. Private mortgage insurance may also be required in addition to what is indicated. |
| Interest | Charge paid for borrowing money. |
| Interest Rate | The annual rate of interest on the loan, expressed as a percentage of 100. |
| Interest Rate Cap | Consumer safeguards that limit the amount the interest rate on an ARM loan can change in an adjustment interval and/or over the life of the loan |
| Interest Rate Disclosure | A description of the conditions applicable to the processing of your loan as well as the terms of your interest rate agreement with Quicken Loans. |
| Joint Liability | Liability shared among two or more people, each of whom is liable for the full debt. |
| Joint Tenancy | A form of ownership of property giving each person equal interest in the property, including rights of survivorship. |
| Jumbo Loan | A mortgage larger than the limits set by Fannie Mae and Freddie Mac as shown below: |
| Junior Mortgage | A mortgage subordinate to the claim of a prior lien or mortgage. In the case of a foreclosure, a senior mortgage or lien will be paid first. |
| Late Charge | Penalty paid by a borrower when a payment is made after the due date. Lender The bank, mortgage company, or mortgage broker offering the loan. |
| Lender Fees | Lender Fees are fees paid to the lender. |
| Lender Processing Fee | The lender processing fee covers the cost of analyzing your loan application and compiling and packaging the necessary supporting documentation to close your loan. |
| LIBOR (London Interbank Offered Rate) | The interest rate charged among banks in the foreign market for short-term loans to one another-a common index for ARM loans. |
| Lien | A legal claim by one person on the property of another for security for payment of a debt. |
| Lifetime (or Overall) Cap | Consumer safeguard that limits the amount the interest rate on an adjustable rate mortgage loan (ARM) can change over the life of the loan. |
| Loan Application | An initial statement of personal and financial information required to apply for a loan. |
| Loan Application Fee | Fee charged by a lender to cover the initial costs of processing a loan application. |
| Loan Origination Fee | Fee charged by a lender to cover administrative costs of processing a loan. |
| Loan Term | The period of time between the closing date and the date of your last payment is paid. |
| Lock or Lock-In | A lender's guarantee of an interest rate for a set period of time-usually between loan application approval and loan closing. The lock-in protects you against rate increases during that time. |
| Manufactured Home | A factory assembled residence built in units or sections that are transported to a permanent site and erected on a foundation |
| Margin | The percentage difference between the index for a particular loan and the interest rate charged. This is a number predetermined by the lender. |
| Maximum Cash Out | The maximum amount of money you are allowed to get back from your mortgage transaction based on the loan information provided and the amount of equity you have in your home. |
| Maximum Monthly Payment | a maximum monthly payment for which you qualify based on the information you provided. This maximum payment is inclusive of the four major components of a typical mortgage payment: taxes, insurance, loan principal and interest. |
| Monthly Mortgage Payment | A monthly mortgage payment typically contains four parts called the PITI (principal, interest, taxes, and insurance). |
| Monthly Principal and Interest (P&I) Payment | Principal and interest is the dollar portion to repay the loan. All interest that occurs is calculated on the current balance owing. The principal reduces the remaining balance of a mortgage. |
| Mortgage | A legal document by which real property is pledged as security for the repayment of a loan. |
| Mortgage Banker | An individual or company that originates and/or services mortgage loans. Usually works directly for the bank. For instance mortgage officer who works for wellfargo and in turn only sells wellsfargo mortgage products. |
| Mortgage Broker | An individual or company that arranges financing for borrowers that represents a number of lenders. |
| Mortgage Insurance | Insurance to protect the lender in case you default on your loan. |
| Mortgage Loan | A loan for which real estate serves as collateral to provide for repayment in case of default. |
| Mortgage Note | Legal document obligating a borrower to repay a loan at a stated interest rate during a specified period of time. The agreement is secured by a mortgage or deed of trust or other security instrument. |
| Mortgage Term | The length of time given to repay the loan. |
| Mortgagee | The lender in a mortgage loan transaction |
| Mortgagor | The borrower in a mortgage loan transaction. |
| Negative Amortization | A loan payment schedule in which the outstanding principal balance of a loan goes up rather than down because the payments do not cover the full amount of interest due. |
| Non-Assumption Clause | A statement in a mortgage contract forbidding the assumption of the mortgage by another borrower without the prior approval of the lender. |
| Note | Legal document obligating a borrower to repay a loan at a stated interest rate during a specified period of time. The agreement is secured by a mortgage or deed of trust or other security instrument. |
| Notice of Default | Written notice to a borrower that a default has occurred and that legal action may be taken. |
| Origination Fee | Fee charged by a lender to cover administrative costs of processing a loan |
| Password | A password is a special code made up of letters and numbers that will allow you, and only you, to gain access to your personal account information |
| Payment Cap | Consumer safeguards that limit the amount monthly payments on an adjustable-rate mortgage may change. Since they do not limit the amount of interest the lender is earning, they may cause negative amortization. |
| Payment Schedule | The method for disclosing your payment schedule varies by loan type. For fixed-rate loans, the payment schedule indicates what your required monthly payment will be throughout the life of your loan. |
| Per Diem Interest | Interest calculated per day. (Depending on the day of the month on which closing takes place, you will have to pay interest from the date of closing to the end of the month. |
| Periodic Cap | Consumer safeguard that limits the amount the interest rate on an adjustable rate mortgage (ARM) can change in an adjustment interval. Caps. |
| Planned Unit Development (PUD) | A planned unit development (PUD) is a project or subdivision that consists of common property and improvements that are owned and maintained by an owner's association for the benefit and use of the individual units within the project. |
| Power of Attorney | Legal document that authorizes one person to act on behalf of another. |
| Pre-approval | The process of determining how much money a prospective homebuyer or refinancer will be eligible to borrow prior to application for a loan. |
| Prepaid Expenses | Taxes, insurance and assessments paid in advance of their due dates. These expenses are included at closing. |
| Prepaid Interest | Interest that is paid in advance of when it is due. Typically charged to a borrower at closing to cover interest on the loan between the closing date and the first payment date. |
| Prepayment | Full or partial repayment of the principal before the contractual due date |
| Prepayment Penalty | A prepayment penalty is a fee that is charged if the loan is paid off earlier than the specified term of the loan. |
| Private Mortgage Insurance (PMI) | Insurance to protect the lender in case you default on your loan. With conventional loans, mortgage insurance is generally not required if you make a down payment of at least 20% of the home's purchase price. |
| Property Taxes | The taxes assessed on the property by the local government (e.g. city, county, village or township) for the various services provided to the property owner. |
| Purchase Agreement | Contract signed by buyer and seller stating the terms and conditions under which a property will be sold. |
| Real Financing Cost | The real financing cost is a consumer-oriented rate that takes into account specific costs, fees, potential rate changes and the projected amount of time you will have the loan. |
| Real Property | Land and any improvements permanently affixed to it, such as buildings. |
| Recording | The act of entering documents concerning title to a property into the public records. |
| Rent Free | If you are living with a relative or friend without paying rent, this is considered “rent free.” |
| Requested Cash Out | The amount of money you requested to get back from your mortgage transaction. Remember, your closing costs and escrows will be subtracted from this amount. |
| RESPA | The Real Estate Settlement Procedures Act (RESPA) is a federal law that gives consumers the right to review information about loan settlement costs after you apply for a loan and again at loan settlement. |
| Right to Rescission | Under the provisions of the Truth-in-Lending Act, the borrower's right, on certain kinds of loans, to cancel the loan within three days of signing a mortgage. |
| Sales Agreement | Contract signed by buyer and seller stating the terms and conditions under which a property will be sold. |
| Second Mortgage | An additional mortgage placed on a property that has rights that are subordinate to the first mortgage. A second mortgage is a lien in which you are given a lump sum amount that you pay off in installments over a specified period of time. |
| Security | This refers to the address of the property being pledged as security for your loan. |
| Settlement (or Closing) | The settlement or closing is the conclusion of your real estate transaction. |
| Settlement Costs | Also known as closing costs, these costs are for services that must be performed to process and close your loan application. |
| Simple Interest | The interest calculated on a principal sum, not compounded on earned interest. |
| Single Family | It is a residence that houses one family. |
| Site Condominium | A detached single-family dwelling characterized as a site condominium by the way it is platted by the builder, however it is still considered a condominium. |
| Streamline Refinance | FHA has permitted streamline refinance loans on insured mortgages since the 1980's. The streamline refinance refers to the amount of documentation and underwriting that needs to be performed by the lender. |
| Structural Improvements | A “Structural Improvement” is any permanent improvement made to your property that is not strictly for decorating purposes. |
| Subject Property | The home that you intend to obtain the mortgage on is called the subject property. |
| Survey | A mortgage survey is a bird's eye sketch of your property that shows the boundary lines of your lot, and details any encroachments between you and your neighbors. |
| Survey Fee | The survey fee covers the cost of the survey. |
| Sweat Equity | Value added to a property in the form of labor or services by the owner rather than by cash. |
| Tax Impound | Money paid to and held by a lender for annual tax payments. |
| Tax Lien | Claim against a property for unpaid taxes. |
| Tax Sale | Public sale of property by a government authority as a result of non-payment of taxes. |
| Tax Service Fee | In some cases, we engage a third party to monitor and/or handle the payment of your property tax bills. The Tax Service Fee covers the cost of this service. |
| Term | The period of time which covers the life of the loan. For example, a 30 year fixed loan has a term of 30 years. |
| Third Party Fees | Fees paid to a third party for services requested by the lender on your behalf. |
| Title Search | Examination of local real estate records to ensure that the seller is the legal owner of a property and that there are no liens or other claims against the property. |
| Total Payments | This is the total amount you will have paid over the life of the loan for principal, interest and prepaid finance charges, assuming you keep the loan to maturity and made only the required monthly payments. |
| Trade Lines | Trade lines are your different credit accounts listed on your credit report. |
| Trans Union | One of the three largest credit bureaus in the United States. |
| Transfer Tax | Tax paid when title passes from one owner to another. |
| Underwriting | In mortgage lending, the process of determining the risks involved in a particular loan and establishing suitable terms and conditions for the loan. |
| Username | A unique sequence of characters including letters and numbers which is generated by Quicken Loans and used as identification when logging on to My Quicken Loans. |
| Verification of Deposit (VOD) | Document signed by the borrower's bank or other financial institution verifying the borrower's account balance and history. |
| Verification of Employment (VOE) | Document signed by the borrower's employer verifying the borrower's position and salary. |
| 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. |
Created by:
SSlayman
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