There are many ways to analyze your ability to afford a home using the following Mortgage Calculators.

At Real Deal Realty, LLC, we want to assist in providing Mortgage Terms so you can make an informed decision.

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

A

Abstract of Title

A full summary of all consecutive grants, conveyances, wills, records and judicial proceedings affecting title to a specific parcel of real estate, together with a statement of all recorded liens and encumbrances affecting the property and their present status.

Acceleration Clause

A loan provision giving the lender the power to declare all sums owing lender immediately due and payable upon the violation of a specific loan provision, such as the sale of the property or the failure to make loan payments on time. Example: John sells his property to Mary who takes over John's mortgage payments. They do not notify the lender of this transaction. The lender finds out that the title to the property has transferred and calls the loan, since the loan documents state that the loan is due on the sale of the property. John is now liable to pay his lender in full.

Acknowledgment

A formal declaration made by a person who has signed a document.

Acquisition Price

The amount of money or other valuable consideration expended to obtain title to property.

Acre

A measure of land equal to 43,560 square feet.

Adjustable-Rate Mortgage (ARM)

A mortgage loan which allows the lender to adjust the interest rate in accordance with a specified index periodically.

Adjustment Period

Length of time for which the interest rate is fixed on an Adjustable Rate Mortgage [ARM] or a variable rate loan. Therefore if the adjustment period is six months, then the interest rate will remain fixed for six months, after which time it will adjust.

Agreement of Sale

A written signed agreement between the seller and the buyer in which the buyer agrees to buy certain real estate and the seller agrees to sell the same upon certain price, terms, and condition. Also known as Contract of Purchase, Purchase Agreement, Offer and Acceptance, Earnest Money Contract, or Sales Agreement.

ALTA

American Land Title Association. An organization of title companies which has standardized forms and coverage on a national basis. This standardized coverage is required for all Argent Mortgage Company loans.

Amortization

The gradual repayment or retiring of a debt by means of systematic payments of principal and/or interest over a set period, so that at the end of the period there is a zero balance.

Annual Percentage Rate

An expression of the relationship of the total finance charge to the total amount to be financed, as required under the Federal Truth-in-Lending Act.

Appraisal

The process of developing and communicating an opinion about a property’s value.

Arm's Length Transaction

A transaction among parties in which each acts in his or her own best interest. A transaction between a father and his son would NOT be an Arm's length transaction

As Is

In appraisals, “As Is” is an indication that the value estimate is made with the property in its current condition, may not include needed repairs.

Assessment

A local tax levied against a property for a specific purpose such as street lights.

Assumable Mortgage

A mortgage loan which allows a new home buyer to take over the obligation of existing home-owner/seller to make loan payments without any change in the terms of the loan [assume the loan]. Assumable loans do not have a due-on-sale clause. Assumption must be approved by the lender and permitted by the Note that the existing owner/seller originally signed. The lender may require the buyer to qualify for the loan and may charge an assumption fee. The existing homeowner/seller should obtain a written Release from the lender stating clearly that he/she is no longer liable for making the remaining mortgage payments. See also "Subject To".

Attorney In Fact

One who is authorized to act for another under a power of attorney which may be general or limited in its scope.
Example: John wants to sell his house but has to be out of the country for 4 months. John gives authorization to Mary to sign the grant Deed to sell the property to a buyer. Mary becomes John's Attorney In Fact.

B

Back End

Expressed as a percentage, back-end refers to the debt-to-income ratio calculated using principal, interest, tax, insurance, and consumer credit obligations divided by gross monthly income.

Balloon (payment) Mortgage

Usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract.
Example : A balloon mortgage for $25,000 has interest only payments for 5 years at 12% ($250 per month), with the full principal of $25,000 due and payable after 5 years.

Bankruptcy

A condition of financial insolvency in which a person’s liabilities exceed assets and the person is unable to pay current debts. All assets are surrendered to a court-appointed trustee or receiver, who liquidates these assets to pay claims held against the debtor by creditors. Bankruptcy discharges the debtor from further liability on all debts then owed, with some exceptions.

Bankruptcy Release Date  

Date the lien was discharged. Legal papers are available.

Basis Point

A unit of measure; 1/100 of 1 percent. Used to describe the amount of change in the market price of bonds and many debt instruments, including mortgages.

Beneficiary

The person who receives or is to receive the benefits resulting from certain acts.
Examples: The lender is named as the beneficiary on a mortgage loan. John has a life insurance policy for $100,000 with Jane as his beneficiary. Should John die – Jane, as the beneficiary, will receive $100,000.00 in benefits.

Bi-weekly Mortgage

A mortgage which requires 1/2 the normal monthly payment every two weeks. Over the course of the year, 26 half payments are made which is equivalent to 13 full mortgage payments. As a result of this extra payment the loan amortizes much faster than a loan with normal monthly payments.

Binder

A written memorandum of the important terms of the contract of insurance, including title and hazard insurance, which provides the insured with temporary protection pending investigation of risks by the insurance company or until a formal insurance policy is issued. Also a preliminary agreement, normally secured with earnest money, between a buyer and a seller as an offer to purchase real estate.

Blanket Mortgage

A mortgage covering more than one piece of property.
Example: A developer subdivides a tract of land into lots and obtains a blanket mortgage on the whole tract.

Bond

A debt instrument in the capital markets. The U.S. government, corporations and municipalities use bonds to raise money. Bonds can also be backed by mortgages. The best known bond is the 30-year Treasury Bond issued by the U.S. government. Also a sum of money given to a court to guarantee against a loss. For example if there is a lien on a property, the owner may remove the lien by posting a bond.

BPO

Broker's Price Opinion also called a Comparative Market Analysis. A method of appraisal in which selling prices of similar properties are used as the basis for arriving at the value estimate. Institutional sellers usually rely on a BPO prepared by a real estate agent and a professional appraisal to determine a listing price.

Bridge Loan

A bridge loan is a loan made on the buyer’s current residence to finance the buyer’s new residence. The loan is paid off when the buyer’s current residence is sold; an interim loan typically used when the buyer is unable to sell current residence but needs money to close the transaction on the new residence.

Broker

A real estate broker is a licensed individual who serves as an agent of the applicants in a loan transaction.

Broker Points

Points paid to the broker by Argent. These points do not include the Broker PYA, and are unaffected by pricing calculations.

Broker PYA

Points paid to the Broker by Argent. If there is no prepayment penalty there is no Broker PYA.

Broker Revenue  

Amount the broker will be paid if the loan is funded

Buy Down

To buy down is to obtain a lower interest rate (buying down the rate) by paying additional points to the lender either for the full duration of the loan or for just the first few years. Buy down results in lower payments which are easier to qualify for. Mortgage Brokers use buy down to qualify prospective mortgagors who otherwise would not qualify for mortgage loans. A very popular buy down is the 2-1 buy down. If the interest rate on the note is 9%, the buy down results in the rate being 7% (9%-2%) for the first year, 8% (9%-1%) for the second year, and 9% thereafter.

Buyers Broker

An agent hired by the buyer to locate a property for the buyer. The Broker exclusively represents the buyer and negotiates with the seller, or seller’s broker for the best price, terms, and conditions.

Buyers Market

Market conditions that favor buyers i.e. there are more sellers than buyers in the market. As a result buyers have ample choice of properties and may negotiate lower prices. A buyers market may be caused by an economic slump or overbuilding.

Bylaws

A set of regulations by which an organization conducts its business.
Example: A condominium association prepares bylaws that state the minimum number of owners to conduct a meeting to decide policies.

C

Cap

The highest rate an Adjustable Rate Mortgage may reach; expressed as the actual rate or the amount of change allowed above the start rate.
Example: A 7.99% start rate with a 6% rate change cap would have a maximum interest rate cap of 13.99%.

Capital Gains

Profit earned from the sale of such Capital as a real property. A seller may defer taxes on the capital gain of his/her primary residence by buying a higher priced residence within 2 years.

Cash Flow

The amount of cash derived over a certain period of time from an income-producing property. The cash flow should be large enough to pay the expenses of the income- producing property (mortgage payment, maintenance, utilities, etc.).

Cash-Out

When a borrower refinances for the purpose of taking equity from the property in the form of cash.

Caveat Emptor

A legal term meaning "Let Buyer Beware". The buyer must examine the property and buy at his/her own risk. However, a property may be offered on an "as is" condition with no express or implied guarantee of quality or condition.

CC&Rs

Covenants, Conditions, and Restrictions. The basic rules establishing the rights and obligations of owners of real property within a condo, PUD, subdivision or other tract of land.

Certificate of Eligibility

The document issued by the Veterans Administration to those who qualify for a VA loan. This loan may be used to buy a house with 0 down. Certificates of Eligibility may be obtained by sending the form DD-214 to the local VA office along with VA form 1880.

Certificate of Occupancy

Document issued by a local governmental agency that states that a property meets the local building standards for occupancy and is in compliance with public health and building codes. Lender will normally need this document prior to closing the loan.

Certificate of Reasonable Value (CRV)

An appraisal performed by a VA-Approved Appraiser which establishes the property's current market value. This value establishes the ceiling on the maximum VA mortgage loan principal.

Certificate of Title

An Opinion rendered by an attorney as to the status of title to a property, according to the public records. This certificate does not grant the buyer the same level of protection as title insurance..

Certified Copy  

A true copy, attested to be true by the officer holding the original. It should have a stamp and signature stating that it is a true copy.

Chain of Title

The chronological order of conveyance of a parcel of land from the original owner to the present owner. A title abstractor can research title to property going back to the date that the property was granted to the United States.

Charge-Off

Term used to indicate that a creditor does not expect a debt to be paid and is listing it as such. This does not mean that the debt no longer exists or that there will not be further attempts to collect it.

Clear Title

A marketable title, free of “clouds” and disputed interests. Most lenders require a clear title prior to closing.

Closed-End Mortgage

A mortgage under which the mortgagor is prohibited from borrowing additional funds under the same mortgage.

Closing

The signing of loan documents, and the disbursement of funds to complete a loan transaction.

Closing Costs

The charges incurred in order to purchase real estate.

Cloud on Title

An outstanding claim or encumbrance that, if valid, would affect or impair the owner's title. Compare with clear title.

Co-op. - Cooperative

An apartment building, or a group of dwellings, owned by a Corporation whose stock is owned by the residents of the dwellings. A Co-Op is operated for the benefit of its residents by their elected Board of Directors. In a cooperative, the corporation or the association owns title to the real estate. A resident purchases stock in the corporation which entitles him to occupy a unit in the building or property owned by the cooperative. While the resident does not own his unit, he has an absolute right to occupy his unit for as long as he owns the stock.

Collection

Procedure followed to bring a delinquent account current.

Combined Loan-to-Value

Total of all mortgage balances on property (including second and third liens) divided by the value of the property.

Commitment

A written document provided by a lender agreeing to make a loan on specific terms to a borrower or builder.

Community Property

A system of property ownership based on the theory that each spouse has an equal interest in the property.

Comp. / Comparable 

A property with the same basic characteristics as the property you are attempting to find the value of. It should have been sold recently and be as similar as possible.

Condemnation

Condemnation is the taking of private property under the power of eminent domain for a public use with compensation to the owner. Used by governments and utilities to acquire land for streets, schools, freeways, and other public projects; to condemn is declare a structure unfit for use because of violations in housing codes or other reasons.

Conditional Commitment

A written document provided by a lender agreeing to make a loan provided certain conditions are met prior to closing.

Condominium

An estate in real property consisting of an undivided interest in common in a portion of a parcel together with a separate interest in space in a residential building.

Consideration

Anything of value given to induce another to enter into a contract. Earnest money deposit on a sales contract is consideration.

Construction Loan

A short term loan to pay for the construction of buildings or homes. These loans typically provide periodic disbursements to the builder as each stage of the building is completed. When construction is completed a take-out or permanent loan is used to pay off the construction loan.

Consumer Credit  

Credit owed by the individual, not secured by real estate.

Consumer History

Record of payments for debts not secured by real estate.

Contingency

Conditions which must be satisfied before the buyer can close the purchase of a property. Contingencies are generally outlined in the purchase contract between the buyer and seller.
Example: Under a purchase contract, the buyer has 14 days to remove the property contingency. In this case the buyer has 14 days to inspect the property and request the seller to perform repairs. If the buyer is not satisfied with the condition of the property or if the buyer and the seller cannot agree on repairs, the buyer may back out of the contract with no penalty. After 14 days the buyer no longer has the right to back out with no penalty as a result of a problem with the condition of the property.

Contract of Sale

Same as the Agreement of Sale

Contract Sale or Deed/Installment Land Contract

A real estate installment selling arrangement where the buyer may occupy the property but the seller retains the title until the agreed upon sales price has been paid. Example: John sells Mary a house. Mary has to put $10,000 down and pay $1,000 per month for 24 months, after which time she will receive title to the property.

Contract/Agreement

An agreement between competent parties to do or not do certain things for consideration. Elements of a valid contract include: competent parties, offer, acceptance, consideration, and legal purpose. A real estate contract must be in writing, describing the property, and signed by all the principals or their duly authorized agents, representatives, or attorneys-in-fact.

Conventional Loan

Any mortgage loan other than a VA or an FHA loan. A conventional loan may be conforming or non-conforming.

Convertible ARMs

Some variable loans come with options to convert them to a fixed loan based on a pre-determined formula, during a given time period. For example the 1-year T-Bill Adjustable Rate Mortgage [ARM] may be converted to a Fixed Rate Mortgage during the first five years on the adjustment date which means that one could convert ARM to Fix Rate Mortgage during the 13th, 25th, 37th, 49th and 61st months of the loan.

Conveyance

The transfer of title to real estate from one party to another.

Credit Report

A document detailing the credit history of an individual, used to determine creditworthiness.

Credit Risk 

Grade based on the following: credit score, mortgage history, debt ratio, bankruptcy status, and foreclosure status.

Credit Score

A numeric value used to represent a borrower’s credit history and current usage of credit at a given point in time. The score ranges from 400 to 850, with a high score indicating less risk. Also referred to as FICO Score.

D

Debt Ratio

Relationship of a borrower’’s monthly payment obligation divided by gross monthly income, expressed as a percentage.

Deed

A written document by which title to real property is transferred from one owner to another. To be valid a Deed should be signed by the Grantor, contain an accurate description of the property being conveyed, notarized according to law of the state where the property is located, and at closing delivered to the buyer.

Deed of Trust/Mortgage

A legal document in which title to property is transferred to a third party trustee as security for an obligation owed by the trustor (borrower) to the beneficiary (lender).

Deed Restriction

A clause or provision in the Deed that limits the use of land and prohibits the use of land for certain purposes.
Example: A Deed might require that a road cannot be built on the land.

Default

Failure to meet legal obligations in a contract - such as the failure to make the monthly mortgage payment.

Defective Title

Any recorded instrument that would prevent a Grantor/seller from giving a clear title.
Example: The seller has a contractor lien on the property that was filed when the seller failed to pay the contractor for the kitchen remodel. The seller may obtain clear title by paying the contractor and removing the lien.

Deferred Maintenance

Physical deterioration or damage of a property resulting from postponed maintenance.

Deficiency Judgment

Personal claim against the debtor when the sale of foreclosed property does not yield sufficient proceeds to pay off the mortgages, accrued interest, legal fees, and other costs.

Depreciation

Decline in the value of a property due to wear and tear, obsolescence, adverse changes in the neighborhood, or any other reason.

Derog

This is short for derogatory and refers to negative credit items.

Derog Letter  

A letter written by the borrower giving an explanation for any derogatory credit.

Discharge  

Following a completed bankruptcy proceeding, discharged debts are no longer owed or collectable. For a chapter 7 bankruptcy we will require having a copy of the Discharge of Debts document in order to proceed with the loan.

Discount Points

A prepaid fee to a lender by a borrower to reduce the interest on a loan.

Dismissal  

If a bankruptcy is dropped without being completed, a Bankruptcy Dismissal document will be needed to proceed with the loan. The dismissal can be prompted by either the court or the debtor.

Disposable Income

The amount of money remaining after subtracting all liabilities from the gross income.

Documentary Tax Stamps

Stamps affixed to a Deed showing the amount of Transfer Tax..

Dower Rights

The legal right or interest recognized in some states that a wife acquires in the property her husband held or acquired any time during their marriage.

Down Payment

The amount of money a borrower puts towards the purchase of a home that is not borrowed.

Dragnet Clause

A provision in a Mortgage that pledges several properties as collateral. A default in the mortgage could lead to foreclosure proceedings on any of the properties in the dragnet.

Due on Sale Clause

A clause or provision in the Deed of Trust or Mortgage requiring the entire loan due on sale of the property.

E

Earnest Money

The cash deposit paid by the prospective buyer of real property, as evidence of a good faith intention to complete the transaction.

Easement

Property interest that one person has in land owned by another, entitling the holder of the interest to limited use or enjoyment of the other’s land.

Effective Age

The apparent age of a property based on observed conditions rather than chronological age.

Egress

A way to exit from a property. The opposite of ingress.

Eminent Domain

The power to take private property for public use by state, municipalities, and utilities by the process of taking, condemnation, or expropriation. Just compensation is paid to owners of the property which is taken.

Encroachment

An unauthorized invasion of a property improvement onto another’s property, thus reducing the size and value of the invaded property.

Encumbrance

Any claim attached to real property that may lessen its value but not prevent transfer of title; a right or interest in a property held by one who is not the legal owner of the property.

Endorsement

A rider attached to title insurance that expands or limits coverage.

Equity

Interest or value remaining in property after payment of all liens or other charges on the property.

Equity Sharing

Joint ownership of a property between the owner/occupant and the owner/investor, that results in tax advantages for both parties. Upon sale of the property the joint owners split profits based on the percentage they own.

Escheat

The reversion of property to the state in the event the owner dies without leaving a Will and has no legal heirs.

Escrow

The process by which money and/or documents are held by a disinterested third party until satisfaction of the terms and conditions of the loan transaction has been achieved.

Escrow Instructions  

Instructions to the escrow agent giving the parameters and contingencies involved in the transaction and agreed upon by both parties.

Estoppel Agreement

A legal doctrine that applies to a person, who without having legal title to a property, deeds the property to another and then subsequently obtains good title to the property.

Executor (Executrix - feminine for Executor)

A person named in a Will to carry out the provisions of the Will for the disposition of the estate of the deceased.

External Obsolescence

A loss of value resulting from extraneous factors that exist outside of a property itself; a type of depreciation caused by environmental, social or economic forces over which an owner has little or no control.

F

Farmer's Home Administration (FmHA)

An agency, within the U.S. Department of Agriculture, that administers assistance programs for buyers of homes and farms in small towns and rural areas.

Fast Trac Income Documentation  

Salaried:
current paystub including YTD earnings or completed VOE, and 6 month's worth of current bank statements Self-employed:
12 month's worth of current bank statements and current YTD P&L

Federal Home Loan Bank Board (FHLBB)

A regulatory and supervisory agency for federally chartered savings institutions.

Federal Home Loan Mortgage Corporation (FHLMC, Freddie Mac)

A quasi-governmental agency that purchases conventional mortgages from insured depository institutions who are members of the Federal Reserve, Federal Home Loan Banks Systems, and HUD-approved mortgage bankers. After purchasing such loans, Freddie Mac securitizes these loans and sells FHLMC mortgage backed securities on Wall Street.

Federal Housing Administration (FHA)

A Division within the U.S. Department of Housing and Urban Development (HUD) whose main activity is the insuring of residential mortgage loans made by private lenders. FHA also sets standards for underwriting mortgages. FHA also administers loan programs and issues loan guarantees to make home ownership increasingly affordable and possible.

Federal National Mortgage Association (FNMA, Fannie Mae)

The nation’s largest mortgage investor created in 1968 by an amendment to Title III of the National Housing Act. This stock-holder owned corporation, some of whose Board of Directors is appointed by the President of the United States, supports the secondary market by purchasing mortgage loans from lenders, securitizing them, and then selling FNMA mortgage backed securities on Wall Street.

Federal Reserve System

The central federal banking system that regulates and provides services to member commercial banks. The Federal Reserve also has the responsibility for conducting federal monetary policy.

Fee

Charges paid by the borrower to the lender and third party in connection with a loan transaction.

Fee Simple

The maximum possible estate one can possess in real property.

Fidelity Bond

An assurance, generally purchased by an employer, to cover employees who are entrusted with valuable property or funds.
Example: A landlord employs a clerk who collects rents. To safeguard these funds during the collection process, the landlord purchases a fidelity bond to cover the clerk.

Fiduciary

A person in a position of trust or responsibility with specific duties to act in the best interest of a client. A real estate Broker is a fiduciary for his/her clients.

Final Title Policy

Policy replacing title commitment or binder, usually issued once new mortgage has been recorded.

Finance Charge

The total of all costs imposed by the creditor and payable directly or indirectly by the customer, as defined by the Federal Truth-In-Lending Act.

First Mortgage

A mortgage lien that is superior in right to any other mortgage liens on a property.

Fixed Income

Income that does not have the likelihood of increasing over time. Social Security and Pension are the most common types.

Fixed Rate Loan

A loan with the same rate of interest for the life of the loan.

Fixture

Improvements and or personal property attached to the land so as to become a part of the real estate. Fixtures are transferred to the buyer upon sale of the property. To determine whether an item is a fixture or a personal property determine:

Intent (was it intended to be part of the property)

How is it fixed? (is it fixed to be removed easily)

Is the fixture essential to the property?

Relationship - was the fixture intended to be a part of the seller’s property?

Example: John sells his house to Mary. John wants to take the chandelier because he states it is personal property. Mary wants the chandelier to stay because she believes it is a fixture.

Flood Insurance

Insurance designed to provide coverage for damage from floods or tidal waves.

Floor Rate

The lowest the interest rate may go.

Foreclosure

A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note.

Free and Clear Title

Real property without any liens, mortgages, or other encumbrances.

Front End

This refers to the debt to income ratio calculation using only principal, interest, tax and insurance divided by gross monthly income. It is expressed as a percentage. See also D.R.

FSBO

For sale by owner. A real property for sale that is not listed with a real estate Broker.

Full Documentation

Income verification using pay stubs, W2, tax returns, or 24 months of current and consecutive bank statements.

Fully Indexed Rate

The index plus the margin for an adjustable rate mortgage

Functional Obsolescence

A loss of value of an improvement due to functional inadequacies, often caused by age or poor design.

G

General Warranty Deed

A Deed in which the Grantor (seller) agrees to protect the Grantee (buyer) against any other claim to title of the property. See also warranty Deed.

Good Faith Estimate (GFE)

Detailed listing of a lender's estimate of your closing costs associated with your real estate financing request.

Good Funds

State law requiring receipt of loan funds (deposit or electronic wiring) prior to closing a transaction.

Government National Mortgage Association (GNMA, Ginnie Mae)

A government agency that is part of HUD that buys VA and FHA loans from lenders, securitizes them, and then sells Ginnie Mae securities to investors. “Ginnie Mae” also provides sources of funds for residential mortgages, insured or guaranteed by FHA or VA.

Graduated Payment Mortgage (GPM)

A mortgage that, initially, has lower payments (with potential negative amortization) which increases each year until the loan is fully amortized.

Grandfather Clause

A common expression used to convey the idea that something that was once permissible continues to be permissible despite changes in the controlling law.

Grant Deed

A deed that contains warranties against prior conveyances or encumbrances.

Grantee

The party to which the Grantor grants; the buyer or the Recipient.

Grantor

The Party that grants or gives; the seller, Giver or one who quits claim.

Gross Income

The entire amount of income an applicant receives not adjusted for taxes or other deductions.

Grossing Up

The practice of adding a percentage (123%) to nontaxable income to allow borrowers the same opportunity to quality as applicants with gross incomes.

H

Hazard Insurance

A property insurance policy that indemnifies against loss resulting from physical damage to property due to hazards such as fire, flood and windstorm.

HMDA (Home Mortgage Disclosure Act)

A federal act that requires information be available to the public to ensure that depository financial institutions such as banks, are serving the housing credit needs of the neighborhoods and communities where they are located. Also helps public officials distribute public sector investments in a way that attracts private investments in neighborhoods where they are needed.

Home Warranty Plan

Insurance that covers such items as appliances and heating systems. Typically purchased at the time of closing.

Homeowner’s Insurance Policy

A combined property and liability insurance policy designed for residential use.

Homeowners Association

A corporation that manages the common areas and services of a PUD or condo project. In a condom project, it has no ownership interest in the common areas; in a PUD, it holds title to common areas.

Homestead

A tract of land that is owned and occupied as the family home.

Homestead Exemption

Exemption which causes the assessed value of a principal residence to be reduced by the amount of the exemption for the purposes of calculating property tax.
Example: John's principal residence is assessed at $100,000 and the homestead exemption is $7,000. His property taxes will be based on $93,000.

Housing and Urban Development (HUD)

A U.S. government agency established to implement certain federal housing and community development programs.

Housing Code

A local government ordinance that sets minimum standards of safety and sanitation for existing residential buildings.

HUD Settlement Statement

A form required by the federal government that itemizes the closing costs associated with purchasing or refinancing a home.

Hypothecate

To pledge a property as security without having to give up possession of such property.

I

Impound Account

A trust account, also called an escrow account, established to set aside funds for future payments for property taxes and insurance.

Improvements

Additions to raw land, such as buildings, streets, and landscaping that add value to the land.

Income Approach

An approach to appraising real estate based on the income the property is estimated to generate.

Income Documentation Type  

Type of income documentation to be supplied.

Income Property

Property, whether personal or real, that generates income.
Examples: Apartment buildings, office buildings, and shopping centers.

Index

A statistic that indicates some current economic or financial condition. Indexes are used to make adjustments in variable rate loans. They may also be used to adjust rent and in some cases even executive compensation.

Ingress

A way to enter a property; access.

Institutional Lender

A financial entity such as a bank, insurance company, or savings and loan, whose loan transactions are regulated by law.

Interest

The sum paid or accrued in return for the use of money. Interest is usually stated in terms of an annual rate.

Interest Adjustment

The process by which the interest rate can be reset in an adjustable rate mortgage loan by applying a specified margin and index.

Interest Bearing  

A form of interest calculation where the loan is charged at a daily or monthly rate (1/365 or 1/12 of the annual interest rate) on the current outstanding balance. This contrasts with the Rule of 78s and compound interest calculations.

J

Joint and Several Liability

Responsible together and individually. A lender can demand full repayment from any and all borrowers. Each borrower is liable for the full debt, not just the prorated share of a particular borrower. A lender does not, however, receive double payments.

Joint Tenancy

Ownership of a property by two or more people, each of whom has an undivided interest with the right of survivorship.
Example: John and Mary own a house in joint tenancy. Each owns half of the entire (undivided) property. If John dies, Mary will own the entire property and vice versa.

Judgment

The law’s last word in a judicial controversy; the official and authentic Decision of a court of justice. Other words for judgment are “Decision”, “Decree”, “Award”, and “Opinion”. Judgments, when recorded, become a lien on real property. In common usage a sense of knowledge, an opinion or estimate.

Judgment Lien

A claim on the property of a debtor resulting from a judgment.

Jumbo Loan

Loan size that is larger than the limit established by Fannie Mae or Freddie Mac.

Junior Mortgage

A mortgage that is subordinate to another mortgage. In case of a foreclosure, a senior mortgage will be paid prior to a junior mortgage.

Jurat  

A notarial act made in a Notary's presence, whereby a voluntary signature and oath of affirmation are made vouching for the truthfulness of a signed document.

L

Land Contract

An agreement for sale of property in which the buyer takes possession while making payments, but the seller holds title until full payment is made.

Landlocked

Real property that has no access to a public road or way.

Lease Option

A lease clause that gives the tenant the right to purchase the property under specified conditions.

Leasehold

Property on which a home sits that is held by a lease.

Legal Description

Description by which property can be definitely located on the ground by reference to government surveys or approved recorded maps.

Lessee

A person to whom property is leased under a lease, a tenant.

Lessor

A person who leases property to another under a lease, a landlord.

LIBOR:

London Interbank Offered Rate. LIBOR is the base interest rate paid on deposits between banks in the Eurodollar market. Eurodollar is a dollar deposit in a bank in a country where the currency is not a dollar. LIBOR is based on the following five international banks: Bank of Tokyo, Bank of America, Barclays, Deutsche Bank, and Swiss Bank.

Lien

A charge or claim that one person has on the property of another as security for a debt or obligation.

Life Estate

Any estate in real or personal property that is limited in duration to the life of its owner or the life of some other designated person.

Limited Documentation

Income verification from current year pay-stub or 12 months of current and consecutive bank statements.

Lis Pendens

Latin for "lawsuit pending”; recorded notice that litigation is pending on a property. Prior to closing, most lenders will require the clearance of the Lis Pendens.

Loan Application (1003)

A document which gathers property, employment, income, assets, liabilities, and government monitoring information for each applicant.

Loan origination fee or points

Charge by a lender or Broker connected with originating a loan. This is different from discount points which are used to buy down the rate of interest.

Loan Purpose

Applicants purpose for the mortgage loan.

Loan Risk

The rate category assigned to the loan that estimates the probable risk of delinquency and loss in the future.

Loan Servicing

A process involving collection of loan payments, handling property tax and insurance escrows, foreclosing on defaulted loans, and remitting payments to the investors.

Loan-To-Value Ratio (LTV)

The ratio of a mortgage loan to the appraised value or sales price, whichever is lower, expressed as a percentage.

Loss Payee

The person designated on an insurance policy as the one to be paid in case the insured property is damaged or destroyed.

M

Margin

In an adjustable rate mortgage, the spread between the index and the mortgage interest rate.

Market Value

The highest price that a ready, willing and able buyer would pay and the lowest price a ready, willing, and able seller would accept on a property. Market value may, in fact, be different from the price a property could actually be sold for, at a given time.

Marketable Title

Title that is readily acceptable to the buyer: Title that is free from any reasonable doubts in both law and fact as to its validity, title that is free from such encumbrances as liens, “clouds’ and other legal defects.

Maturity

The time when indebtedness, such as a mortgage note, becomes due and is extinguished if paid in accordance with the agreed-on schedule of payments.

Mechanic's Lien

A statutory lien created in favor of material men and mechanics (and architects and designers in some states) to secure payment for materials supplied and services rendered in the improvement, repair or maintenance of real property.

Merged-Bureau

A credit report containing credit information from the three most common credit bureaus: Equifax, Trans Union and Experian.

Modification Agreement

A written agreement to change or modify closed loan documents.

Mortgage

An interest in land created by a document providing security to the lender for the payment of a debt; a written instrument evidencing debt secured by real estate.

Mortgage Banker

A qualified and usually state-licensed professional who specializes in originating and servicing loans. Mortgage Bankers generally sell their loans to investors, but may continue to service them.

Mortgage Broker

A qualified and usually state-licensed professional who arranges financing from a lender for a mortgage borrower. Mortgage Brokers are paid a fee by the borrower or the lender when the loan closes.

Mortgage History

A record of mortgage payments for all real estate owned.

Mortgage Insurance

See private mortgage insurance (PMI)

Mortgage Late

Loan payments that are received at a date past the contractual due date. A mortgage payment is considered late when the next scheduled payment becomes due.

Mortgage Note

A note of absolute promise evidencing a loan for which real estate has been offered as a security; a written agreement secured by a mortgage that serves as a proof of indebtedness and that states the manner in which the debt shall be paid, the actual amount of the debt that the mortgage secures, and that renders the mortgagor or borrower personally responsible for repayment.

Mortgagee

One who takes or receives a mortgage: Creditor or lender who loans money secured by real estate.

Mortgagor

One that gives and grants Mortgage; one who pledges real property to which one has a title, as security for a debt.

N

Negative Amortization

An increase in principal balance in spite of periodic payments when monthly payments do not cover all of the interest cost. The interest cost which is not covered by the payment is added to the unpaid principal balance.

Net Effective Income

The borrowers’ gross income minus federal income tax.

Non-conforming loan

Loans that do not comply with Fannie Mae or Freddie Mac guidelines.

Non-Conforming Use

A permitted use of a real property that was lawfully established at the time of its original construction but that no longer conforms to the current zoning law.

Non-Owner Occupied

When a property owner does not occupy the subject property.

Notary Public

One authorized to take acknowledgments of certain types of documents, such as Deeds, contracts, and mortgages.

Note

A written agreement to pay a specified amount at a future date, based upon stated terms.

Notice of Default

A step in the foreclosure process in which the lender formally tells the court that the borrower is in arrears

O

Obligations  

Any debt or recurring payment the borrower is obligated to pay, except for mortgage payments.

Occupancy

Designation of how real property will be occupied.

Offer

A written expression of intention and willingness to purchase a property at a specified price, terms, and conditions for acceptance, rejection, or a counter-offer; usually accompanied by earnest money deposit.

Offeree

The recipient of an Offer; the buyer makes an Offer to the seller who then becomes the Offeree and as such accepts, rejects, or in turn makes a counter-offer..

Offeror

One who makes or presents the Offer to the Offeree for acceptance, rejection, or a counter-offer. When the buyer makes an offer to the seller the buyer is an Offeror.

Office of Comptroller of Currency

A bureau within the US Dept of Treasury charged with the execution of all laws relating to the issue and regulation of the national currency secured by US Bonds and all Federal Reserve notes, except for cancellation and destruction, including accounting of cancellation and destruction.

Office of Thrift Supervision

The OTS charters federal thrift institutions and is the primary regulator of all federal and many state-chartered thrift institutions.

Open House

A real-estate industry practice of marketing a home for sale: According to the practice, with the Realtor playing the cheerful host, the home on the market is left open for inspection by prospective buyers

Open-End Mortgage

A loan in which the borrower is given a limit up to which he or she may borrow, with each incremental advance to be secured by the same mortgage.

Option

A contract granting a right to purchase, sell or otherwise contract for the use of a property at a stated price within a stated period of time.

Optionee

One who receives or purchases an Option.

Optionor

One who gives or sells an Option.

Oral Contract

A verbal agreement. Verbal agreements for the sale or use of real estate are normally unenforceable.

Origination Fee

See Loan Origination Fee.

Origination Point

The finance fee charged by a lender or broker for making a mortgage. 1 point is equal to 1% of the loan amount.

Owner Occupant

An occupant of a residence who also owns the same property.

Owner Occupied

The subject property and the applicants residence are the same.

Owner of Record

The individual named on a Deed that has been recorded at the Office of the County Recorder.

P

P & L / Profit and Loss 

A statement of gross income, cost of goods, operating costs and net profit or loss for a business.

P and I

Principal and Interest. This refers to the principal and interest portions of the monthly mortgage payment.

Package Mortgage

A Mortgage covering both real and personal property.

Parcel

Any area of land contained within a single description.

Partial Release

A provision in a blanket mortgage directing mortgagees to release specified parcels from lien upon payment of a certain sum of money. .

Participation Mortgage

A mortgage that allows the lender to share in the income or resale proceeds.

Perfecting Title

The process of eliminating any claims against a title, such as having a wife execute a quitclaim deed to release any claim.

Permanent Loan or Mortgage

A mortgage for a long period of time; often referred to as the mortgage that pays off a construction loan on a completed property.

Permit

A document issued by a government regulatory authority that grants the bearer the right to do something specific.
Example: An occupancy permit allows the owner of a building to occupy or rent the building.

Piggyback Loan

Simultaneous closing of a first and second loan to execute a purchase transaction.

PITI

Abbreviation for principal, interest, taxes and insurance (mortgage payment).

Planned Unit Development (PUD)

PUD is a concept according to which housing, typically a group of homes is built with minimal ground space and what would normally constitute the yard for each dwelling is consolidated into larger recreational or greenbelt areas.

Plat

A plan or map of a specific land area.

Plat Book

A public record containing maps of land, showing the division of the land into streets, blocks, and lots and indicating the measurements of the individual parcels.

Plat Map

A map of a town, section or subdivision indicating the location and boundaries of individual properties.

Points

Fees paid to lenders. 1 point=1% of the loan amount. On a $100,000 loan 1 point is $1000. Points may be further classified into origination points or discount points.

Portfolio Loan

A loan that is held as an investment by a Bank or Savings and Loan, and not sold to investors in the secondary market.

Power of Attorney

A written instrument authorizing a person to act as the agent on behalf of another to the extent indicated in the instrument.

Prelim. / Preliminary Title Report

The title report generated at the beginning of the application process. It tells the mortgage company what liens are on the property and gives advice as to what will need to be done to gain a clear title prior to recording our trust deed.

Prepaid Interest

Prepaid interest is the interest charged to borrowers at closing to pay for the cost of borrowing for the balance of the month.
Example: If a loan closes on the 19th of the month and the first payment is due on the 1st of the following month, the lender will charge 12 days of prepaid interest.

Prepayment

Full or partial payment of the principal before the due date. This might occur if the borrower makes extra payments, sells the property, or refinances the existing loan.

Prepayment Penalty

The amount set by the creditor as a penalty to the debtor for paying off the debt before it matures.

Prepayment Term

Number of years after which a prepayment penalty is waived

Pricing Add-On

Adjustments to the interest rate based on loan characteristics.

Primary Mortgage Market

Persons that originate and service mortgage loans. Banks, Savings & Loans, Credit Union, Mortgage Bankers, and institutional and private lenders make up the primary mortgage market. See also Secondary Mortgage Market.

Prime Rate

Usually the lowest rate of interest charged by a specific lender to its best customers for short term unsecured loans. The prime rate is often used as a measuring rod for interest rates on other loans.

Principal

The capital sum. Interest is paid on the principal.

Private Mortgage Insurance (PMI)

In the event the borrower does not have a 20 percent down payment, lenders will allow a smaller down payment - as low as 2 percent in some cases. However, with the smaller down payment for loans, borrowers are usually required to carry private mortgage insurance. Private mortgage insurance payments are normally made annually or monthly. An impound account may be required.

Probate

A Court process to validate the Last Will and Testament of the Deceased.

Property Tax

A tax based on the market value of the property as assessed by the county assessor's office.

Property Type

Real property designation, such as a condominium, a single family residence, or 2-4 unit.

Property Value  

Appraised value of the subject property.

Public Sale

An auction of property with advance Notice to the general public.

Purchase

The act of transferring real property from one owner to another for an agreed amount.

Purchase Agreement

See Agreement of Sale.

Purchase Money Mortgage

A Mortgage used to finance the purchase of a property.

Purchase Price  

Purchase price of the subject property. The purchase price must be greater than the loan amount.

Q

Quiet Title (Action)

An action to remove a “cloud” [defect] from the title by a proper court action.

Quitclaim Deed

A legal document to release the interest the grantor has in the property.

R

Rate Sheet

A document used to market products, interest rates and underwriting guidelines.

Rate Term

A refinance transaction where the loan purpose is to reduce the rate or the rate and the term of the existing mortgage loan.

Real Estate Broker

A person qualified and usually licensed by the jurisdiction to manage, lease, and procure the purchase or sale of real property, acting as intermediary between seller and buyer, lessor and lessee, landlord and tenant, and in some states also between mortgage lender and borrower.

Real Estate Investment Trusts (REIT)

A Trust that uses investors’ money to purchase and manage real estate.

Real Property

Land, including all inherent natural attributes and any man-made improvements of a permanent nature.

Realtor

A real estate professional who is a member of the National Association of Realtors. Most Realtors are also state-licensed. “Realtor” is a federally registered collective membership mark owned by the National Association of Realtors and properly used only in reference to members of the association.

Rebate

Money earned by a broker from a lender. Usually based on increased interest rate. A rebate is used to offset borrower fees.

Recon / Reconveyance  

A release of lien filed with the county recorder by the trustee.

Reconveyance

The act of transferring title in property back to the original owner.

Recording

The act of officially recording or entering into a County Book of Public Records instruments affecting title to the real property as notice to creditors, buyers, and all others interested in the subject property. Example: A lender requires that a Deed of Trust or a Mortgage be recorded to evidence the debt against the property.

Recourse

To recur. The right of the holder of a note, secured by a mortgage or a Deed of Trust, to recover against a party secondarily liable, such as prior endorser. Therefore, if a prior endorser signs without recourse, he exempts himself from liability for payment. U.C.C. Sec. 3-414(1).

Redlining

Redlining is the practice of refusing to provide loans or insurance in a certain neighborhood.

Refinancing

Refinancing is the process of paying off an existing high interest rate loan from the proceeds of a new lower interest loan on the same property. Refinancing is also done to reduce the term of the loan, to convert from ARM to a fixed rate mortgage, or to cash out all or portion of the equity.

Regulation Z (Reg Z)

Regulations of Federal Reserve Board which implement provisions of Federal Truth-in-Lending Act. One such Regulation requires lenders to provide full disclosure of the terms of a loan, including the term of the loan and the Annual Percentage Rate (APR).

Request for Reconveyance  

Verification given by the beneficiary to the trustee that the conditions of the lien have been fulfilled and request that the lien be canceled.

Rescission

A “rescission” amounts to the unmaking of contract, or an undoing of it from the beginning, and not merely a termination; annulling, abrogating, or unmaking of a contract and the placing of parties to it in status quo.
Example: When refinancing a mortgage on a principal residence the law gives the homeowner three days to rescind the contract.

RESPA (Real Estate Settlement Procedures Act)

A federal law that ensures all parties in a real estate transaction have knowledge of all settlement costs.

Restrictive Covenants

A clause or a provision in a Deed limiting the use of the property and prohibiting certain uses. Such restrictive covenants may "run with the land," binding all subsequent buyers of the land, or they may be "personal" binding only the buyer.

Rider

An addition or amendment to a document which becomes incorporated into the terms of the original document.

Right of Survivorship

The right, of a survivor of a deceased person, to the property of the deceased. The right of survivorship is a distinguishing characteristic of a joint tenancy relationship.

Right to Rescission

Period of three full days after closing in which the borrower is permitted by law to cancel a refinance loan transaction.

S

S.I. / Statement of Information  

The form the customer fills out for the title company giving further identification of the customer. This allows the title company to eliminate debts and liens owed by people with similar names.

Sales Agreement or Sales Contract

Contract for the sale of real estate, including a contract for a Deed, See Agreement of Sale and Conditional sale contract.

Savings & Loan

Federally or state chartered depository institutions that specialize in originating, servicing, and holding mortgage loans primarily on owner occupied residential property.

Second Mortgage

A subordinated lien, created by a mortgage loan, over the amount of the first mortgage. Second mortgages generally carry a higher rate than a first mortgage since they represent a higher risk for an investor.

Secondary Financing

A junior mortgage lien placed on a property.

Secondary Mortgage Market

The market where Banks, Savings & Loan Associations, private and institutional lenders, and mortgage bankers can sell mortgages to investors like Fannie Mae or Freddie Mac.

Section 1031

The section of the IRS that deals with tax free exchanges of certain property. General rules for tax free exchanges are: Properties must be exchanged, similar, and used for business or as an investment. .

Section 8 Housing

Privately owned rental units participating in the low-income rental assistance program. Landlords receive subsidies on behalf of qualified low-income tenants, allowing the tenants to pay a limited proportion of their incomes toward the rent.

Secured

Borrowed money that is backed by collateral.

Security

Property that serves as collateral for a debt.

Servicing

Activities include collecting payments that include interest, principal, insurance and taxes on a note from the borrower in accordance with the terms of the note.

Settlement Cost (HUD guide)

A booklet that provides an overview of the lending process and is required to be given to consumers after the loan application is completed.

Shared Appreciation Mortgage

A residential loan with a fixed interest rate that is below the market rate, with the lender entitled to a specified share of appreciation of the property over an agreed upon time interval.

Sheriff's Deed

A Deed given at the Sheriff's sale in the foreclosure of a mortgage.

Single Family Housing (SFR)

A type of residential structure designed to include one dwelling.
Example: Town houses, detached units.

Soft Prepayment Penalty

A prepayment penalty which will not be enforced if the subject property is sold. However if the property is refinanced, the prepayment penalty will be enforced.

Spec House

A single family dwelling constructed by a builder in anticipation of finding a buyer.

Special Assessment

A special tax imposed on property, individual lots, or all property in the neighborhood to pay for such improvements as sidewalks and street lights.

Specific Performance

A legal doctrine compelling performance of a contract, specifically, in instances where damages for non-performance would not sufficiently compensate for the breach of a contract; the actual accomplishment of a contract by a party bound to fulfill it. As the exact fulfillment of a contract is not always practicable, specific performance may mean substantial performance.

Standard Uniform Loan Application (Form 1003)

A standard loan application widely used in the mortgage industry.

Start Rate  

Adjusted par rate based on Broker PYA.

Stated Income

Verbal income documented on a loan application.

Subdivision

A tract of land divided into lots suitable for home building purposes.

Subject To

A condition that must be satisfied to make a decision valid.

Submission  

This refers to a complete loan application package submitted for approval to the underwriters

Subordinate  

Ordinarily, liens are given chronological precedence when a liquidation of a property occurs. If a lien holder agrees to accept a lien position after that of a later recorded lien, a subordination agreement must be recorded stating that.

Subordination

The act of a party acknowledging, in writing, that a debt is inferior to the interest of another in the same property.

Subordination Agreement  

The agreement detailing the contingencies of subordination, filed with the county recorder.

Substitution of Trustee

A document, filed by the beneficiary, which changes the trustee on a particular trust deed.

Surety Bond 

A bond which ensures against harm to a party (usually the lender or owner) by a lien still attached to the property. This is usually used when the original deed was lost or the beneficiary cannot be located.

Survey

The process by which boundaries are measured and land areas determined, including the determination of any existing encroachments, easements, or party walls.

Sweat Equity

Value added to a property by improvements personally made by the owner.

T

Takeout Financing

A commitment to provide permanent financing upon completion of construction. The take out loan normally pays off the construction loan.

Tax Lien

A statutory lien imposed against real property for nonpayment of taxes.

Tax Sale

Public sale of a property for non-payment of taxes at an auction by a government authority.

Teaser Rate

A low initial interest rate on a mortgage.

Tenancy at Sufferance

Tenancy at Sufferance is created when a tenant or lessee continues to occupy the premises after the right to occupy the premises has terminated.

Tenancy at Will

A license to use or occupy land and buildings at the will of either the tenant or the owner. The tenant must leave at the landlord’s will.

Tenancy By Entirety

A special joint tenancy between a lawfully married husband and wife, which places all title to property (real or personal) into the martial unit, with both spouses having an equal, undivided interest in the whole property.

Tenancy for Years

Tenancy created for a fixed term, such as a lease for 6 months, 2 years, and the like.

Tenancy In Common

A form of concurrent ownership of property between two or more persons, in which each has an undivided interest in the whole property.

Tenancy in Severalty

Ownership of property by one person.

Time is of the Essence

A legal phrase meaning that a failure to do what is required by the time it is required to be done, as specified in the contract, amounts to and is a breach of contract.

Time Share

A form of property ownership under which a property is held by a number of people, each with the right of possession for a specified time interval. Time sharing is used mostly for vacation properties.

Title

Title is a union of all the elements which constitute ownership, also the evidence of such ownership; vested rights in real property.

Title Insurance

Indemnity against loss resulting from defects in or liens upon a title.

Title Report

A document indicating the current state of title. The report includes information on the current ownership, outstanding Deeds of trust or mortgages, liens, easements, covenants, restrictions, and any defects.

Title Search

An examination of the public records to determine the ownership and encumbrances affecting a property.

Town House

Residence which normally has 2 or more floors and is attached to other similar units. Town houses are commonly found in planned unit developments (PUDs) and condominiums.

Tract

A parcel of land generally held for subdividing.

Transfer Tax

Tax paid to the city, county, state, or other government entity upon sale or transfer of property.

Triple-Net Lease

One in which the tenant pays all operating expense of the property. The landlord receives the net rent.

Trust Account

A separate bank account maintained by a broker or an escrow company to handle all monies collected for clients. A broker may not commingle these funds with his/her own funds.

Trust Deed

The Trust Deed attaches the note as a lien on the property. This is the document that conveys the ability to collect from the proceeds of the property.

Trustee

A party who is given legal responsibility to hold property in the best interest of, or "for the benefit of" another. The trustee is one placed in a position of responsibility for another, a responsibility enforceable in a court of law.

Truth In Lending (TIL)

A federal law requiring lenders to fully disclose in writing the terms and conditions of a mortgage, including the annual percentage rate and other charges. Also called “Regulation Z”.

Two-Step Mortgage

A mortgage in which the borrower receives a fixed rate for a specified number of years (most often 5 or 7), and then receives a new interest rate based on the terms in the note.

U

Underwriting

The process of deciding whether to make a loan to a loan applicant based on the applicant’s credit, income, employment history, assets, and other related information.

Undivided Interest

An ownership right to use and possess a property that is shared among co-owners, with no one co-owner having exclusive rights to any portion of the property.

Unencumbered Property

Real estate with free and clear title.

Unimproved Property

Undeveloped land.

Unrecorded Deed

A Deed that has not been recorded in the County Hall of Records and consequently the public has no notice about the real estate transaction indicated on such unrecorded Deed.

Unsecured

Borrowed money that is not backed by collateral.

Usury

Illegal, excessive interest; Charging a rate of interest greater than that permitted by law.

V

VA Loan

Home loan guaranteed by the U.S. Veterans Administration, enabling a Veteran to buy a home with no money down.

Vacancy Factor

An equation used to estimate vacancy in future rental income received.

Verification of Deposit (VOD)

A document signed by the borrower's bank or other financial institution verifying the account balance and history.

Verification of Employment

A document signed by the borrower's employer verifying his/her starting date, job title, salary, and probability of continued employment.

Vesting

How a property is held; official recording of the parties’ names that have a stake in a property.

W

Waiver

The voluntary renunciation, abandonment, or surrender of some claim, right, or privilege.

Warehousing

A line of credit normally extended by a commercial bank to a mortgage banker. The mortgage banker borrows money from the bank to fund its loans and pledges the loans as collateral.

Warranty Deed

A Deed conveying title to a property with a warranty of a clear marketable title.

Wraparound Mortgage

A loan arrangement whereby the existing loan is retained and a new loan is added to the property.
Example: The seller sells his/her property for $200,000. The buyer puts $80,000 down. The seller has an existing loan balance of $100,000 for a remaining period of 25 years at an interest rate of 6%. The seller then makes a wraparound mortgage to the buyer, (where the seller acts as a lender) for $120,000 at 8%. The seller has to continue making payments on his old loan. The buyer has to pay the seller on the new loan. The buyer may at a later date refinance the property and close both loans.

Y

Yield Spread Premium

Sum paid to a mortgage broker between the lender and the borrower. This premium is based solely on interest rate. Also referred to as PYA.

Z

Zero Lot Line

A form of housing where individual units are on separate lots, but are attached to one another.
Example: PUD, Townhouse.

Zoning

The regulation of structures and uses of property within designated districts or zones. Zoning regulates and affects such things as use of the land, lot sizes, types of structure permitted, building heights, setbacks and density