Abstract
A complete written history of public records on property. |
Conventional Mtg.
A mortgage loan that is not insured by a government or
private source. |
Grantor
Seller of the property. |
Principal
The balance still owed or the amount of money borrowed on a loan. |
| ARM (adjustable
rate mortgage) - Loans whose interest rates change periodically according to a specified
financial index. |
Deed
This is the written transfer of property ownership as well as
proof of ownership. |
Index
Guide for rate changes that lenders use to decide how much
the annual percentage rate will change over time |
Promissory Note
A document between the lender and the borrower explaining what is owed and how it
is to be repaid. |
Amortization
Repayment of your loan through scheduled installment payments |
Default
Failure to meet an obligation when due. Usually as applied to
loan repayments. |
Interest Rate
The periodic charge, expressed as a percentage for use of
credit. |
Rate Cap
A limit on how much the variable interest rate can increase during the life of the
loan. |
Appraisal
A report made by a qualified person indicating the value of a property as of a
given date. |
Easement
The legal right to limited use of another persons property. |
Lien
A legal claim on a property use as security for a debt. |
Refinancing
The process of getting a new mortgage to replace the old - usually with a lower
rate. |
Application fee
The amount paid to a lender to process your application. |
Encumbrance
A claim, lien or liability that is attached to the title of a
property. |
LTV
(Loan-to-value ratio) Difference between the property value
and what is owed. |
Reverse Mortgage
The Lender makes payments to the borrower - a form of negative amortization. |
Assumable Mortgage
The buyer takes over the seller's mortgage and the buyer then assumes
responsibility for the payments. |
Equity
The difference between the fair market value (appraised
value) and the balance left on the loan. It is the portion of the property that you own |
Margin
On an adjustable rate mortgage, the number of percentage
points the lender adds to the index rate to determine the adjustable rate |
SONYMA
State of New York Mortgage Association - State funded program
for first time homebuyers. Ask your lender if you qualify. |
| Balloon Mortgage
Scheduled repayment of the mortgage loan where the entire balance is paid
at one time. |
Escrow
Deposits made to a special account until the terms of the
contract are fulfilled. |
Mortgage
A legal document where the owner uses the new property as
security to guarantee repayment. |
Secondary Market
The buying and selling of mortgages after closing. |
Binder
A primary agreement to purchase,often secured by the payment of money in earnest.
Also known as a purchase offer. |
Fannie Mae
(FNMA) Federal National Mortgage Association.
A quasi-government corporation that buys and sells mortgages. |
Mortgagee
The borrower or the individual who actually borrows the
money. |
Title
A document showing ownership of property. |
Blanket Mortgage
A single mortgage that covers two or more properties. |
FHA
(Federal Housing Administration)
A government agency issuing government subsidized mortgages with low
down payment. |
Mortgagor
The person or institution who lends the money. |
Title Insurance
Insurance against defects or incorrect information in a title. |
Buy-Down
Money advanced to lower the monthly mortgage payments for a
few years or for the length of the loan. |
FHA Loan
(Federal Housing Association).
Government subsidized loan on residential property with low a down payment. |
Negative
Amortization
The loan balance increases rather than decreases often due to
payments being less than the interest due. |
Title Search
This report offers present condition of the property and
reviews a specific piece of Real Estate to guarantee there are no liens, encumbrances,
etc. |
Cap
(As applied to Interest Rate) - The maximum interest rate
increase allowable on an ARM. |
Fixed rate mortgage
A loan where the interest rate remains the same throughout
the length of the loan. |
PITI
An acronym for payments to a lender that cover: Principal,
Interest, Taxes and Insurance on a property. |
Transfer Tax
City, County or State taxes imposed when a property passes from one owner to
another. |
Cap
(As applied to Payment Rate) - The maximum payment amount
increase allowable on and ARM. |
Foreclosure
The procedure whereby the lender re-acquires the
property after failure to repay the loan. |
PMI
Private Mortgage Insurance. Insurance against foreclosure
covering a percentage of property value. |
VA
(Veteran's Administration). A government agency that insures
loans for those who have served in the military/Armed Services |
Closing
The legal transfer of property from seller to buyer. |
Freddie Mac (FHLMC) Federal Home Loan Mortgage Corporation -
quasi-government agency that pools mortgages and sells participation agreements. |
Points
Up-front charges for making the loan. 1 point equals 1
percent of the loan amount. |
Variable Rate Mtg.
A mortgage loan in which the interest rate on the loan may
increase or decrease at specified levels within certain limits based upon an
economic indicator. |
Closing Costs
Fees paid at the time of closing. Costs may vary from lender
to lender. |
Grantee
Buyer of property. |
Prepayment Penalty
A fee paid by the borrower if the repay the loan before it is
due |
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