Mortgage Glossary Terms

With so many terms used during typical mortgage loans applications sometimes its difficult to know.
Money is something that we either have or we do not. At defined stages in our life it can appear that we usually have a never ending quantity of cash at hand, at other points in times it can be hard to even put food on the table. There are some fantastic folk out there that may budget particularly well and they know precisely where ever buck is and where it has to go, however for most people, this is not the arranged situation that we are in.

When bad luck strikes, without reference to the reason or circumstances, payday advance loans can supply you with desirable relief to help you escape from a bad financial footing. It’s important to note early on nevertheless that it’s not smart to get yourself out of one bad financial footing thru getting cash advance pay day loans, only to get yourself into further debt that you are going to struggle to reimburse. You need to only consider fast and easy loans , for example cash advance pay day loans, when your need is positively swift and you are completely conscious that, on your really next pay-day, you’ll be either able to pay back the complete amount or the bank stipulated installment amount easily and cost effectively.

What would classify as a fast need? Circumstances that will need you to get a cash advance would usually include emergencies only. Wanting a new driver for your golfing game on Sat, or needing to buy that shocking pair of high-heeled boots, shouldn’t be one of your reasons for getting cash advance pay day loans. Though these purchases could seem like an emergency to you, the high interest applied to several advance pay-day loans will mean that you might finish up laying out more for these products than you must. The government knows this and applies strict rules. Emergency circumstances will vary greatly from individual to individual and family to family, and very often, and emergency will appear when it is least expected. Money advance pay day loans are quick and simple, even for the ones that typically stress about filling in forms and completing obligatory documentation. The forms are straightforward, the approval procedure is quick and painless, and the cash can be in your account with lightening speed.

They seem to be a blessing for anybody experiencing an emergency, who finds they do not have the funds available till their next pay cycle. Pay for your emergency, get yourself out of hot water, and then make a reasonable budget in order to reimburse the loan in total punctually.

With the help of our financial glossary of terms, you can research at your own pace so that you can select the loan that fits your needs:

Adjustable Rate Mortgage or ARM

Simple Definition: Is a mortgage in which the interest rate is adjusted periodically based on a preselected index. Also sometimes…

Amortization

Simple Definition: A repayment method in which the amount you borrow is repaid gradually though regular monthly payments of principal…

Annual Percentage Rate APR

Simple Definition: Is a interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely…

Appraisal

Simple Definition: An estimate of the value of property, made by a qualified professional called an appraiser….

Assessment

Simple Definition: A local tax levied against a property for a specific purpose, such as a sewer or street lights….

Assumption

Simple Definition: The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from…

Balloon Payment

Simple Definition: A lump sum payment for the unpaid balance of the loan….

Broker

Simple Definition: An individual in the business of assisting in arranging funding or negotiating contracts for a client buy who…

Buy-Down

Simple Definition: When the lender and/or the home builder subsidized the mortgage by lowering the interest rate during the first…

Cash Flow

Simple Definition: The amount of cash derived over a certain period of time from an income-producing property. The cash flow…

Cash Out

Simple Definition: Receiving money back when refinancing your present mortgage….

Certificate of Eligibility

Simple Definition: The document given to qualified veterans which entitles them to VA loans for homes, business, and mobile homes….

Certificate of Title

Simple Definition: A statement provided by an abstract company, title company, or attorney stating that the title of real estate…

Closing Costs

Simple Definition: Any fees paid by the borrowers or sellers during the closing of the mortgage loan. This normally includes…

Collateral

Simple Definition: An asset that guarantees the repayment of a loan. The borrower risks losing the asset if the loan…

Commitment

Simple Definition: A promise by a lender to make a loan on specific terms or conditions to a borrower or…

Contract Sale or Deed

Simple Definition: Contract between purchaser and a seller of real estate to convey title after certain conditions have been met….

Debt-to-Income Ratio

Simple Definition: The ratio, expressed as a percentage, which results when a borrower’s monthly payment obligation on long-term debts is…

Deed of Trust

Simple Definition: The agreement used to pledge your home or other real estate as security for a loan. Similar to…

Deferred interest

Simple Definition: When a mortgage is written with a monthly payment that is less than required to satisfy the note…

Delinquency

Simple Definition: Failure to make mortgage payments when mortgage payments are due….

Department of Veterans Affairs VA

Simple Definition: An independent agency of the federal government which guarantees long-term, low-or no-down payment mortgages to eligible veterans….

Discount Points or Points

Simple Definition: The amount paid either to maintain or lower the interest rate charged. Each point is equal to one…

Down Payment

Simple Definition: The difference between the purchase price and that portion of the purchase price being financed. Most lenders require…

Earnest Money

Simple Definition: Money given by a buyer to a seller as part of the purchase price to bind a transaction…

Effective Interest Rate

Simple Definition: The cost of credit on a yearly basis expressed as a percentage. Includes up-front costs paid to obtain…

Equity

Simple Definition: The difference between the fair market value (appraised value) of your home and your outstanding mortgage balance….

Escrow

Simple Definition: An account held by the lender into which the home buyer pays money for tax or insurance payments….

FHA Mortgage Insurance

Simple Definition: Requires a fee (up to 2.25 percent of the loan amount) paid at closing to insure the loan…

First Mortgage

Simple Definition: A mortgage which is in first lien position, taking priority over all other liens (which are financial encumbrances)….

Fixed Rate Mortgage

Simple Definition: An interest rate which is fixed for the term of the loan. Payments as well are fixed at…

Flood Insurance

Simple Definition: Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally…

Foreclosure

Simple Definition: A legal process by which the lender or the seller forces a sale of a mortgaged property because…

Hazard Insurance

Simple Definition: A contract between purchaser and an insurer, to compensate the insured for loss of property due to hazards…

Home Equity Loan

Simple Definition: A fixed or adjustable rate loan obtained for a variety of purposes, secured by the equity in your…

Impound

Simple Definition: That portion of a borrower’s monthly payments held by the lender or servicer to pay for taxes, hazard…

Interim Financing

Simple Definition: A construction loan made during completion of a building or a project. A permanent loan usually replaces this…

Lender

Simple Definition: The bank, mortgage company, or mortgage broker offering the loan….

Lien

Simple Definition: The right to take and hold or sell the property of a debtor as a security or payment…

Loan-to-Value Ratio

Simple Definition: The relationship between the amount of the mortgage loan and the appraised value of the property expressed as…

Market Value

Simple Definition: The highest price that a buyer would pay and the lowest price a seller would accept on a…

Mortgage Insurance

Simple Definition: Money paid to insure the mortgage when the down payment is less than 20 percent. See private mortgage…

Origination Fee

Simple Definition: The fee charged by a lender to prepare loan documents, make credit checks, inspect and sometimes appraise a…

PITI

Simple Definition: Principal, interest, taxes and insurance, which comprise your monthly mortgage payment….

Prepaid Expenses

Simple Definition: Necessary to create an escrow account or to adjust the seller’s existing escrow account. Can include taxes, hazard…

Prepayment Penalty

Simple Definition: Money charged for an early repayment of debt. Prepayment penalties are allowed in some form (but not necessarily…

Principal

Simple Definition: The amount of debt, not counting interest, left on a loan….

Realtor

Simple Definition: A real estate broker or an associate holding active membership in a local real estate board affiliated with…

Recording Fees

Simple Definition: Money paid to the lender for recording a home sale with the local authorities, thereby making it part…

Refinance

Simple Definition: Obtaining a new mortgage loan on a property already owned. Often to replace existing loans on the property….

RESPA

Simple Definition: Short for the Real Estate Settlement Procedures Act. RESPA is a federal law that allows consumers to review…

Reverse Annuity Mortgage RAM

Simple Definition: A form of mortgage in which the lender makes periodic payments to the borrower using the borrower’s equity…

Second Mortgage

Simple Definition: A mortgage made subsequent to another mortgage and subordinate to the first one. A real estate second mortgage is…

Secondary Mortgage Market

Simple Definition: The place where primary mortgage lenders sell the mortgages they make to obtain more funds to originate more…

Survey

Simple Definition: A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference…

Title

Simple Definition: The written evidence that proves the right of ownership of a specific piece of property….

Title Insurance

Simple Definition: Protection for lenders or homeowners against financial loss resulting from legal defects in the title….

Title Search

Simple Definition: An investigation into the history of ownership of a property to check for liens, unpaid claims, restrictions or…

Underwriting

Simple Definition: The process of verifying data and approving a loan….

VA Mortgage Funding Fee

Simple Definition: A premium of up to 1-7/8 percent (depending on the size of the down payment) paid on a…

Variable Rate

Simple Definition: An interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly. See…