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A
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.
Accrued Interest
Interest earned but not
yet paid.
Adjustable
Rate Mortgage Loans (ARM)
Loans with interest rates
that are adjusted periodically based on changes in a pre-selected
index. As a result, the interest rate on your loan and the monthly
payment will rise and fall with increases and decreases in overall
interest rates. These mortgage loans must specify how their interest
rate changes, usually in terms of a relation to a national index
such as (but not always) Treasury bill rates. If interest rates
rise, your monthly payments will rise. An interest rate cap limits
the amount by which the interest rate can change; look for this
feature when you consider an ARM loan.
Adjustment Interval
On an ARM
loan, the time between changes in the interest rate or monthly
payment.
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 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
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.
Annual
Percentage Rate (APR)
The cost of credit expressed
as a yearly rate. The annual percentage rate is often not the
same as the interest rate. It is a percentage that results from
an equation considering the amount financed, the finance charges,
and the term of the loan.
Application
An initial statement of
personal and financial information required to apply for a loan.
Application Fee
Fee charged by a lender
to cover the initial costs of processing a loan application. The
fee may include the cost of obtaining a property appraisal, a
credit report, and a lock-in fee or other closing costs incurred
during the process or the fee may be in addition to these charges.
Appraisal
A written estimate of a
property's current market value completed by an impartial party
with knowledge of real estate markets.
Appraisal Fee
A fee charged by a licensed,
certified appraiser to render an opinion of market value as of
a specific date.
APR
See Annual
Percentage Rate.
ARM
See Adjustable
Rate Mortgage Loans.
Assignment
The transfer of ownership,
rights, or interests in property by one person, the assignor,
to another, the assignee.
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.
B
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
("the balloon") for all of the remainder of the principal. Typically,
the balloon payment may be due at the end of 5, 7, or 10 years.
Borrowers with balloon loans may have the right to refinance the
loan when the balloon payment is due, but the right to refinance
is not guaranteed.
Bankruptcy
A proceeding in a federal
court to relieve certain debts of a person or a business unable
to pay its debts.
Bearer
The legal owner of a piece
of property.
Bequest
A gift of personal property
by will.
Blanket Mortgage
A mortgage that covers
more than one parcel of real estate.
Bona Fide
In good faith.
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.
Broker
An individual who brings
buyers and sellers together and assists in negotiating contracts
for a client.
Buy-Down Mortgage
A mortgage loan with a
below-market rate for a period of time.
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.
C
Call Option
A provision of a note
which allows the lender to require repayment of the loan in
full before the end of the loan term. The option may be exercised
due to breach of the terms of the loan or at the discretion
of the lender.
Caps
(interest)
Consumer safeguards which
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. For example, if your per-period cap is 1% and your
current rate is 7%, then your newly adjusted rate must fall
between 6% and 8% regardless of actual changes in the index.
Caps (payment)
Consumer safeguards which
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, these consumer safeguards
may cause negative amortization.
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.
The cash out amount is calculated
by subtracting the sum of the old loan and fees from the new
mortgage loan.
For example, if your existing
loan is $100,000, you might refinance it with a loan of $120,000.
After you pay off your current loan ($100,000) and any loan-origination
costs for the new loan (for example $2,000 in points), you
would be left with $18,000 cash out.
Cash-out loans may not be available
for all types of property.
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 which verifies
a veteran's eligibility for a VA guaranteed loan.
Obtainable through local VA office by submitting form DD-214
(Separation Paper) and VA form 1880 (request for Certificate
of Eligibility).
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.
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 (refinance).
Closing Costs
Costs for services that
must be performed before your loan can be initiated. Examples
include title fees, recording fees, appraisal fee, credit report
fee, pest inspection, attorney's fees, and surveying fees.
COFI
See Cost
of Funds Index.
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.
Condominium
A form of property ownership
in which the homeowner holds title to an individual dwelling
unit and a proportionate interest in common areas and facilities
of a multi-unit project.
Conforming Loan
A mortgage loan which
meets all requirements to be eligible for purchase by federal
agencies such as FNMA and FHLMC.
The maximum conforming loan amount is $300,700 for a one-unit
property ($379,050 in Alaska, Hawaii and the Virgin Islands).
Consumer Reporting
Agency
A company which regularly
gathers, files and sells information to creditors to facilitate
their decisions to extend credit.
Contingency
A condition which 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
effect a transfer, such as a deed, or mortgage.
Cost
of Funds Index (COFI)
An index of the weighted-average
interest rate paid by savings institutions for sources of funds,
usually by members of the 11th Federal Home Loan Bank District.
Credit Bureau
A credit bureau is a
clearinghouse for credit history information. Credit grantors
provide the bureau with factual information on how their credit
customers pay their bills. The bureau regularly assembles this
information, along with public record information obtained from
courthouses around the country, into a "file" on each consumer.
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. Your credit card history;
amount of outstanding debt; the type of credit you use; negative
information such as bankruptcies or late payments; collection
accounts and judgments; too little credit history and too many
credit lines with the maximum amount borrowed are all included
in credit-scoring models to determine your credit score.
D
Deed
Legal document by 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.
Discount Points (or
Points)
Points are an up-front
fee paid to the lender at the time that you get your loan. Each
point equals one percent of your total loan amount. Points and
interest rates are inherently connected: in general, the more
points you pay, the lower the interest rate you get. However,
the more points you pay, the more cash you need up front since
points are paid in cash at closing.
Down Payment
The amount of your home's
purchase price you need to supply up front in cash to get your
loan. For conventional loans, you should strive for a down payment
that's at least 20% of your home's value, since lenders generally
do not require private mortgage insurance with a down payment
of at least 20% of your home's purchase price. (Note, however,
that FHA and VA loans
have different policies regarding insurance.)
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.
E
Earnest Money
Deposit made by a buyer
towards the down payment in evidence of good faith when the purchase
agreement is signed.
ECOA
See Equal
Credit Opportunity Act.
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. The lender disburses escrow account funds
on behalf of the borrower when they become due. Also known as
Impound Account.
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.
Experian
One of the three largest
credit bureaus in the United States.
F
Fair, Isaac and Co.
The company that invented
credit scoring software.
Fannie Mae
A common nickname for the
Federal National Mortgage Association.
FDIC
See Federal
Deposit Insurance Corporation.
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
Home Loan Mortgage Corporation (FHLMC, or Freddie Mac)
This agency buys loans
that are underwritten to its specific guidelines. These guidelines
are an industry standard for residential conventional lending.
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.
Federal
National Mortgage Association (FNMA, or Fannie Mae)
This agency buys loans
that are underwritten to its specific guidelines. These guidelines
are an industry standard for residential conventional lending.
Fee Simple
Absolute ownership of real
property.
FHA
See Federal
Housing Administration.
FHA
Loans
Fixed- or adjustable-rate
loans insured by the U.S. Department of Housing
and Urban Development. FHA loans are designed to make housing
more affordable, particularly for first-time homebuyers. FHA loans
typically permit borrowers to buy a home with a lower down payment
than conventional loans. With FHA insurance, eligible buyers can
purchase a home with a down payment as little as 3% of the appraised
value or the purchase price, whichever is lower. FHA borrowers
typically are required to participate in a face-to-face meeting
with their lender or a government approved mortgage counselor
prior to closing on a new mortgage loan. The current FHA loan
limits vary depending on home type and home location. To find
the most recent limits for your home, consult the FHA
Maximum Mortgage Limits web page.
FHLMC
See Federal
Home Loan Mortgage Corporation.
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. According to this model,
the higher your score, the less likely you are to default on your
loan.
First Mortgage
A mortgage which 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 which
is fixed for the term of the loan.
Fixed-Rate Loans
Fixed-rate loans have interest
rates that do not change over the life of the loan. As a result,
monthly payments for principal and interest are also fixed for
the life of the loan. Fixed-rate loans typically have 15-year
or 30-year terms. With a fixed-rate loan, you will have predictable
monthly mortgage payments for as long as you have the loan.
Flood Insurance
Insurance that compensates
for physical damage to a property by flood. Typically not covered
under standard hazard insurance.
FNMA
See Federal
National Mortgage Association.
Forbearance
The act by the lender of
refraining from taking legal action on a mortgage loan that is
delinquent.
Foreclosure (or Repossession)
Legal process by which
a mortgaged property may be sold to pay off a mortgage loan that
is in default.
Freddie Mac
A common nickname for the
Federal Home Loan Mortgage Corporation.
G
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),
the lender is required to provide this disclosure to the borrower
within three days of receiving a loan application.
Grace Period
Period of time during which a loan
payment may be made after its due date without incurring a late
penalty. The grace period is specified as part of the terms
of the loan in the Note.
Gross Income
Total income before taxes
or expenses are deducted.
H
Hazard Insurance
Protects the insured
against loss due to fire or other natural disaster in exchange
for a premium paid to the insurer.
Housing and Urban
Development
See HUD.
HUD
Housing and Urban Development.
A U.S. government agency established to implement federal housing
and community development programs; oversees the Federal Housing
Administration.
HUD-1
Uniform Settlement Statement
A standard form which
itemizes the closing costs associated with purchasing a home
or refinancing a loan.
I
Impound 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. The lender disburses impound account
funds on behalf of the borrower when they become due. (Also
known as Escrow Account.)
Index
Most lenders generally
tie adjustable rate mortgage loan (ARM) interest
rate changes to an "index." An index is a widely published rate
such as LIBOR, T-Bill, or 11th District Cost of Funds (COFI).
Lenders use these indices to establish the interest rates charged
on mortgage loans. For ARMs, a predetermined margin is added
to the index to compute the interest rate adjustment.
Initial Cap
Consumer safeguard which
limits the amount the interest rate on an adjustable rate mortgage
can change during the first adjustment period. See Caps.
Initial Rate
The rate charged during
the first interval of an ARM loan.
Interest
Charge paid for borrowing
money, calculated as a percentage of the remaining balance of
the amount borrowed.
Interest Rate
The annual rate of interest
on the loan, expressed as a percentage of 100.
Interest Rate Cap
Consumer safeguards which
limit the amount the interest rate on an ARM
loan can change in an adjustment interval and/or over the life
of the loan. For example, if your per-period cap is 1% and your
current rate is 7%, then your newly adjusted rate must fall
between 6% and 8% regardless of actual changes in the index.
J
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 $300,700 limit set by the Federal National Mortgage Association
and the Federal Home Loan Mortgage Corporation.
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.
L
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.
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 which
limits the amount the interest rate on an adjustable rate mortgage
loan (ARM) can change over the life of the
loan. See Caps.
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. The
fee may include the cost of obtaining a property appraisal, a
credit report, and a lock-in fee or other closing costs incurred
during the process or the fee may be in addition to these charges.
Loan Origination Fee
Fee charged by a lender
to cover administrative costs of processing a loan.
Loan-to-Value Ratio
(LTV)
The percentage of the loan
amount to the appraised value (or the sales price, whichever is
less) of the property.
Lock or Lock-In
A lender's guarantee of
an interest rate for a set period of time. The time period is
usually that between loan application approval and loan closing.
The lock-in protects you against rate increases during that time.
M
Margin
The percentage difference
between the index for a particular loan and the interest rate
charged. This is a number predetermined by the lender.
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.
Mortgage Broker
An individual or company
that arranges financing for borrowers.
Mortgage Insurance
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 appraised value.
(Note, however, that FHA and VA
loans have different insurance guidelines.)
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.
Mortgagee
The lender in a mortgage
loan transaction.
Mortgagor
The borrower in a mortgage
loan transaction.
N
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. The monthly shortfall in payment
is added to the unpaid principal balance of the loan.
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.
O
Origination Fee
Fee charged by a lender to cover
administrative costs of processing a loan.
P
Payment Cap
Consumer safeguards
which 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.
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. Your first mortgage payment
will probably be due the first day of the following month.)
Periodic Cap
Consumer safeguard
which limits the amount the interest rate on an adjustable
rate mortgage (ARM) can change in an adjustment
interval. See Caps.
PITI
Abbreviation for Principal,
Interest, Taxes and Insurance, the components of a monthly
mortgage payment.
Points (or Discount
Points)
Points are an up-front
fee paid to the lender at the time that you get your loan.
Each point equals one percent of your total loan amount. Points
and interest rates are inherently connected: in general, the
more points you pay, the lower the interest rate you get.
However, the more points you pay, the more cash you need up
front since points are paid in cash at closing.
Power of Attorney
Legal document authorizing
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. A pre-approval
includes a preliminary screening of a borrower's credit history.
Information submitted during pre-approval is subject to verification
at application.
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
Fee charged by a lender
for a loan paid off in advance of the contractual due date.
Pre-qualification
The process of determining
how much money a prospective homebuyer will be eligible to
borrow prior to application for a loan. Information submitted
during pre-qualification is subject to verification at application.
Principal
The amount of debt,
not counting interest, left on a 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. (Note, however, that FHA and
VA loans have different insurance guidelines.)
Purchase Agreement
Contract signed by
buyer and seller stating the terms and conditions under which
a property will be sold.
Q
No Q terms.
R
Real Financing Cost
The real financing
cost is a consumer-oriented rate that takes into account the
projected amount of time you tell us you will actually have
the loan, as well as the specific costs, fees, and potential
rate changes associated with it. The fees and costs are distributed
over the time you plan to be in the house, allowing you to
do an apples-to-apples comparison of a variety of loan types.
The real financing cost is not the APR.
The APR assumes that you keep your loan for the entire term
(e.g. 30 years for a 30 year fixed loan) and includes only
some of your loan fees. The total financing cost takes into
account all of your closing costs associated with your loan
and also how long you plan to be in your house.
Real Property
Land and any improvements
permanently affixed to it, such as buildings.
Reconveyance
The transfer of property
back to the owner when a mortgage loan is fully repaid.
Recording
The act of entering
documents concerning title to a property into the public records.
Recording Fee
Money paid to an agent
for entering the sale of a property into the public records.
Refinancing
The process of paying
off one loan with the proceeds from a new loan secured by
the same property.
RESPA
Real Estate Settlement
Procedures Act. RESPA is a federal law that gives consumers
the right to review information about loan settlement costs.
The law gives you the right to review this information after
you apply for a loan, and again at loan settlement. The law
only obliges lenders to provide these settlement costs after
application.
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.
S
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.
Settlement (or
Closing)
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 (refinance).
Settlement Costs
Also known as closing
costs, these costs are for services that must be performed
before your loan can be initiated. Examples include title
fees, recording fees, appraisal fee, credit report fee,
pest inspection, attorney's fees, taxes, and surveying fees.
Settlement Cost
(HUD guide)
HUD
- published booklet that provides an overview of the lending
process, and that is given to consumers after completing
loan application.
Survey
A measurement of
land, prepared by a licensed surveyor, showing a property's
boundaries, elevations, improvements, and relationship to
surrounding tracts.
Sweat Equity
Value added to a
property in the form of labor or services of the owner rather
than cash.
T
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.
Term
The period of time
between the beginning loan date on the legal documents
and the date the entire balance of the loan is due.
Title
Document which
gives evidence of ownership of a property. Also indicates
the rights of ownership and possession of the property.
Title Company
A company that
insures title to property.
Title Insurance
Insurance which
protects the lender (lender's policy) or the buyer (owner's
policy) against loss due to disputes over ownership of
a property.
Title Search
Examination of
municipal 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.
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.
Truth-in-Lending
Act
Federal law requiring
written disclosure of the terms of a mortgage (including
the APR and other charges) by a lender
to a borrower after application. Also requires the right
to rescission period.
U
Underwriting
In mortgage
lending, the process of determining the risks involved
in a particular loan and establishing suitable terms
and conditions for the loan.
Usury
Interest charged
in excess of the legal rate established by law.
V
VA
Loans
Fixed-rate
loans guaranteed by the U.S. Department of Veterans
Affairs. They are designed to make housing affordable
for eligible U.S. veterans. VA loans are available
to veterans, reservists, active-duty personnel,
and surviving spouses of veterans with 100% entitlement.
Eligible veterans may be able to purchase a home
with no down payment, no cash reserve, no application
fee, and lower closing costs than other financing
options. The maximum VA loan amount is currently
$203,000.
Variable
Rate Mortgage
See Adjustable
Rate Mortgage.
Variable
Rate
Interest
rate that changes periodically in relation to an
index.
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.
W
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.
X
No
X terms.
Y
No
Y terms.
Z
Zoning
Ordinances (or Zoning Regulations)
Local
law establishing building codes and usage
regulations for properties in a specified
area.
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