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Accrued
Interest- The amount of interest due since the last payment was
posted to your account.
Adjustable Rate Mortgage (ARM)- A mortgage in which the interest rate
changes periodically according to a predetermined loan program and index.
Amortization- The payment of a debt in equal installments that
results in the elimination of the debt.
Amortization Schedule- A detailed list of each payment due on a loan
which shows the amount applied to the principal, the amount applied to the
interest, and the remaining loan balance.
Annual
Percentage Rate (APR)- A percentage of the amount of the loan that
represents the total cost of the loan, including the finance charges.
Appraisal- A report given by a qualified individual in which their
opinion is given as to the value of a property.
Balloon
Mortgage- A mortgage in which monthly payments are made for a
specified period of time, at the end of which the remaining balance is due in
full.
Cap-
A limit on the maximum that interest rates can rise on an adjustable rate
mortgage (ARM) during both a specified period of time and the life of the loan.
Closing
Costs- Costs associated with obtaining a mortgage loan and/or a
transfer of property.
Credit
Report- A report issued by a credit reporting agency that is used by
the mortgage company to determine whether a loan applicant is eligible for
credit.
Escrow-
A neutral third party used to carry out the wishes of the lender, seller and
buyer during a real estate transaction.
Good
Faith Deposit- A deposit given by the person buying the property to a
third party to be held in escrow until the transaction is completed.
Judgment Lien- A judgment by the court which is placed as a lien
against a property.
Margin-
The percentage a lender will add to the index rate to determine the new interest
rate.
Mortgage Insurance- An insurance policy that insures the lender
against loss caused by the borrower’s failure to make loan payments.
Origination Fee- A fee charged by a mortgage company to cover the
cost of the process of making a mortgage loan.
PITI-
The acronym to Principal, Interest, Taxes (property), and Insurance
(homeowner’s).
Private Mortgage Insurance (PMI)- See Mortgage
Insurance.
Subordination- When a lien holder agrees to allow another lien holder
to take a priority lien position.
Tax
Lien- A lien against a property for unpaid taxes. This can be
Federal, State, and/or Property Taxes.
Underwriting- The analysis of risk and verification of information
given on a borrower’s loan application. |
