Acceleration Clause
A commonly used clause in a deed of trust/mortgage that permits the payee to
declare the entire balance immediately due and payable in the event of default.
Additional Living Expense Insurance
Coverage under a Homeowners, Condominium and Renters policy that reimburses
costs of residing in a temporary location until the insured’s home can
be made whole again. It usually provides living expenses from 10-20% of the
structural coverage on the home.
Additional Property
Address of real estate that a person owns that is not being financed.
Adjustable Rate Mortgage (ARM)
A type of mortgage loan program in which the interest rate and payments may
be adjusted as frequently as every month. The principal loan balance or term
of the loan may also be adjusted to reflect the rate change. The purpose of
the program is to allow mortgage interest rates to fluctuate with market conditions.
Adjusted Income
Your Gross Receipts Income minus business expenses, which equals total qualifying
income.
Adjustment Period
On an ARM, the time between scheduled changes to the loan payment and interest
rate, usually one, three or five years, depending on the terms of the specific
ARM loan program.
Advantage 90®
Mortgage insurance is usually required if you apply for a loan with less than
20% down. The Advantage 90® Program allows you to put as little as 10% down
without paying mortgage insurance. Although your initial interest rate might
be slightly higher, interest is usually tax-deductible (unlike mortgage insurance
premiums). One of the unique features of this program is that the mortgage interest
rate may be reduced when the loan balance decreases and/or the home value increases.
You may also request to have the loan re-amortized, at no cost, at the time
of rate reduction. This will lower your monthly payment. Or, you can keep the
same payment and pay down the loan faster.
Advantage-90® 1-Month Option ARM
An adjustable rate mortgage loan with four payment options; minimum payment,
interest only, full principal and interest (30-year term) and full principal
and interest (15-year term). These loans have an initial fixed interest rate
for one month. After this period, the rate charged on the loan adjusts monthly,
and payment option amounts adjust annually. Deferred interest, or negative amortization,
is possible with these loans. The Advantage 90® Program eliminates private
mortgage insurance.
Advantage-90® 3-Month Option ARM
An adjustable rate mortgage loan with four payment options; minimum payment,
interest only, full principal and interest (30-year term) and full principal
and interest (15-year term). These loans have an initial fixed interest rate
for three months. After this period, the rate charged on the loan adjusts monthly,
and payment option amounts adjust annually. Deferred interest, or negative amortization,
is possible with these loans. The Advantage 90® Program eliminates private
mortgage insurance.
Advantage-90® Flex-3 Option ARM
An adjustable rate mortgage loan with four payment options; minimum payment,
interest only, full principal and interest (30-year term) and full principal
and interest (15-year term). These loans have an initial fixed interest rate
for 3 years. After this period, the rate charged on the loan adjusts monthly,
and payment option amounts adjust annually. Deferred interest, or negative amortization,
is possible with these loans. The Advantage 90® Program eliminates private
mortgage insurance.
Advantage-90® Flex-5 Option ARM
An adjustable rate mortgage loan with four payment options; minimum payment,
interest only, full principal and interest (30-year term) and full principal
and interest (15-year term). These loans have an initial fixed interest rate
for 5 years. After this period, the rate charged on the loan adjusts monthly,
and payment option amounts adjust annually. Deferred interest, or negative amortization,
is possible with these loans. The Advantage 90® Program eliminates private
mortgage insurance.
Affidavit
A written statement sworn to before an authorized official.
Affordable 97
This program offers special pricing and underwriting flexibility which is intended
to provide financing to borrowers who are unable to qualify for other loan options.
The Affordable 97 program is offered with 30-year Fixed Rate Mortgage loans,
and may allow a borrower to qualify for financing with as little as 1% of the
down payment in his or her own funds. Mortgage insurance is required with this
program.
Agent
One that acts for or represents another.
Agreement of Sale
A written document in which a purchaser agrees to buy property under certain
given conditions, and the seller agrees to sell under certain given conditions.
Also known as a 'Sales Contract'.
Alimony
Monthly payments received by an ex-spouse. Payments must be received continuously
for three years to be counted toward qualifying income for a loan.
Amortization
The repayment of a loan in a specified number of equal periodic payments that
includes principal and accrued interest.
Amortization Schedule
A timetable for repayment of a mortgage loan. An amortization schedule shows
the amount of each payment applied to interest and principal and also the remaining
balance after each payment is made.
Amortization Term
The period of time used in an amortization schedule to determine the dollar
amount of scheduled loan payments, usually expressed as a number of months.
For example, a fully amortizing 30-year fixed-rate mortgage has an amortization
term of 360 months (30 years 12 months) with scheduled loan payments sufficient
to repay all outstanding principal by the end of the amortization term with
substantially equal installment payments. When the amortization term is longer
than the actual loan term, the final payment required to be made (sometimes
called a "balloon" payment) is larger than the preceding installment
payments. For example, a 7-year balloon mortgage may have schedule loan payments
determined based on an amortization term of 180 months (15 years x 12 months)
even though the final loan payment is due at the end of 7 years.
Amortized Loan
A loan that is completely paid off, interest and principal, by a series of regular
payments that are equal or nearly equal.
Amount Financed
The loan amount minus the prepaid finance charges.
Annual Percentage Rate (APR)
The annual cost of a loan, including interest, loan fees, and other costs.
Application
A form commonly referred to as a 1003 form, used to apply for a mortgage and
to provide information regarding a prospective mortgagor and the proposed security.
Application Deposit
A deposit that is charged upon submission of a property application in all states
but New Jersey and North Carolina. The cost to submit is $295 for a single family
residence or condominium, and $450 for a two or more unit property. The Application
Deposit will be used to pay the fees and costs of an appraisal and, if funds
are sufficient, may be applied to other costs of the loan transaction such as
the credit report and title cancellation fees.
Application Fee
A fee that is charged upon submission of a property application in New Jersey
and North Carolina. A loan consultant will contact you with details about the
amount of your specific application fee.
Application Fee/Deposit
An application deposit is charged upon submission of all property applications
on the internet. In all states but New Jersey and North Carolina, the cost is
$295 for a single family residence or condominium, and $450 for a two or more
unit property. The Application Deposit will be used to pay the fees and costs
of an appraisal and, if funds are sufficient, may be applied to other costs
of the loan transaction such as the credit report and title cancellation fees.
The application fee varies in New Jersey and North Carolina. A loan consultant
will contact you with details about the amount of your specific application
fee in these states.
Appraisal
An estimate of the market value of a piece of real estate made by a competent
professional who knows local real estate prices and markets.
Appraised Value
The estimated value of a home established by a professional who has a knowledge
of real estate prices and markets.
Appraiser
A person qualified by education, training, and experience to estimate the value
of real property and personal property.
Appreciation
The increase in value or price of a property over time.
Approval
An assessment made by a lender of a borrower's ability to pay for a home and
a confirmation of the amount the borrower may obtain.
Assessed Value
The value of a property for tax purposes set by a tax assessor according to
a formula.
Assessments
A charge placed by a government agency (for example, city or county) for property
improvements such as lighting, sewers, and flood control.
Asset
Anything of monetary value that is owned by a person. Assets include real property,
personal property, and enforceable claims against others including bank accounts,
stocks, mutual funds, and so on.
Assignment
The transfer of a mortgage from one person to another.
Assignment of Lease
The transfer of all rights, title, and interest under a lease that a lessee
or tenant possesses in certain real property. The document used to convey leasehold
is called an Assignment of Lease, rather than a Grant Deed or Special Warranty
Deed.
Assumability
The ability of a mortgage to be taken over by a new borrower.
Assumable
A loan or obligation that can be taken over by a new borrower.
Assumable Mortgage
A mortgage that can be taken over or 'assumed' by the buyer when a home is sold.
Assumption
A transaction where a new applicant takes over an existing loan. The original
borrwer's liability may or may not be released. The lender typically must approve
the new buyer who agrees to assume liability. Not all loans are assumable.
Assumption Clause
A provision in an assumable mortgage that allows a buyer to assume responsibility
for the mortgage from the seller. The loan does not need to be paid in full
by the original borrower upon sale or transfer of the property. See Assumable
Mortgage.
Assumption Fee
The fee paid to a lender (usually by the purchaser of real property) resulting
from the assumption of an existing mortgage.
Auto Pay
A way to set up a monthly payment to be automatically paid from a bank account.
Automobile Expense/Allowance
Payment to our borrower by their employer for using their personal vehicle for
business purposes.