We have put together the following list of financial industry terms to shed some light on the mystery of loans and the mortgage process. This will make it easier for us to speak the same the language and take you out of the dark about your new loan.

A
ADJUSTABLE-RATE MORTGAGE (ARM) - a mortgage with an interest rate that changes periodically, according to an index that is selected when the mortgage is issued. The initial interest rate is lower than that for fixed-rate mortgages, but monthly payments can go up or down when the rate is adjusted. The most commonly used "indexes" are LIBOR and the 11th District COFI.

ADJUSTMENT INTERVAL - the period of time between changes in the interest rate for an adjustable-rate mortgage. Typical adjustable intervals are one year, three and five years. Monthly payments may not always adjust when the interest rate does.

AMORTIZATION - the gradual repayment of a loan by installments over a set period of time.

ANNUAL PERCENTAGE RATE (APR) - along with its now famous Regulation Z, APR was a product of the 1965 Consumer Credit Protection Act. As was often the case at that time, different types of funding sources quoted "rates" in many misleading and deceptive manners. The Federal Government stepped in and created this National body of consumer law, which protects consumers in many ways. One of its major changes effecting consumer lenders nationwide, the reason for the creation of an Annual Percentage Rate (APR), was to provide a benchmark for comparing different types of costs, fees, charges, interest etc. as they get blended together by one lender or another. APR includes more than only "interest." It's a stated rate that reflects all the financing costs of a transaction. The APR includes points, origination fees and other finance charges in addition to the interest on the loan, and includes them all in a yearly "percentage rate.” As a result, the APR is usually higher than the "interest" rate alone. It's technically the "yield" or "return on investment expressed as a percentage" received by the lender. This area of disclosure does not apply to "commercial" transactions.

APPRAISAL - an originally typed and signed estimate of the value of a property on a specific date, made by a qualified educated licensed professional called an "appraiser" for the benefit of the Lender or Lessor. No photocopy can be used, and no appraisal done for one lender, then switched to a secondary Lender or Lessor, would ever be acceptable. Its purpose is to confirm customers’ assertion of value of proposed collateral.

APPRAISED VALUE - an opinion of a property's fair market value, based on what a willing buyer will sell and what a willing seller will pay for a piece of real property, in an arms-length transaction, and on an appraiser's knowledge, experience, and analysis of the property.

APPRAISER - a person qualified by education, training, experience and license to estimate the value of real property. Most funding sources will NOT accept an appraisal from just any appraiser; they often have approved appraiser lists of acceptable individuals or firms with whom they have had experience. An appraisal from your brother-in-law, or the friendly Realtor down the street, will not be acceptable to most institutional lender funding sources.

APPRECIATION - an increase in the value of a property due to changes in market conditions or other causes. It’s the opposite of depreciation.

ASSUMABLE MORTGAGE - a mortgage that can be taken over (assumed) by the buyer when the home is sold.

ASSUMPTION - the transfer of the seller's existing mortgage to the buyer.

ASSUMPTION FEE - the amount paid, if any, to a lender for the paperwork and processing of an assumable existing mortgage. Many lenders can refuse to let a buyer assume the sellers existing mortgage. Be sure and check first!

ATTORNEY-IN-FACT - one who holds a recorded power of attorney to perform specific acts on behalf of another.

B
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.

BANKRUPTCY - a person, firm or corporation that, though a court procedure, is relieved from the payment of all debts after the surrender of all assets to a court appointed trustee. Once, getting a loan was almost impossible, but not here at My Loan World

BASIS POINT - one one-hundredth of one percent. Used primarily to describe changes in yield or price on debt instruments, including mortgages and mortgage-backed securities.

BENEFICIARY - a person who benefits from a life insurance policy, will, contract or deed of trust. In the latter case, the lender is the beneficiary.

BENEFICIARY STATEMENT - the lender's statement under a deed of trust detailing the remaining principal balance, monthly payment, and interest rate on the loan.

BILL OF SALE - a written document signed by a seller that transfers title of personal property.

BI-WEEKLY MORTGAGE - a type of fixed-rate mortgage with payments for half the usual monthly amount scheduled every two weeks. Because you make the equivalent of 13 months of payments every year, the loan term is shortened from 30 years to 18 or 19 years, and total interest costs are substantially lower.

BORROWER - one who receives funds in the form of a loan with the obligation of repaying the loan in full with interest.

BREACH - failure to perform under a contract or the violation of a legal obligation.

BRIDGE LOAN - a form of second mortgage or deed of trust collateralized by borrowers present home (usually for sale) in a way which allows the proceeds of the loan to be used to close the loan on the new home they are buying before the present home is sold. Also sometimes referred to as a "swing loan."

C
CAPS - consumer safeguards for adjustable-rate mortgages that limit the amount monthly payments can increase. An interest rate cap limits the amount the interest can change, while a payment cap limits the increase in monthly payment to a specific dollar amount.

CASH FLOW - the amount of money you have available after monthly debt servicing.

CASH OUT (SECOND MORTGAGE) - to turn some of your house equity into cash through a house equity loan; this is to use the financial power in your house as an investment vehicle in addition to a "home" for you and your family.

CASH OUT (REFINANCE) - a first mortgage refinance transaction in which the amount of money received from the new loan, exceeds the total of the money needed to repay the existing mortgage(s) plus the closing costs of the new loan. In other words, a refinance transaction in which the borrowers receive additional cash, which is used for any lawful purpose.

CHAIN OF TITLE - a history of the documents, which have transferred title to a parcel of real property from the original owner to the present owner.

CLOSING - the event of getting all paperwork appropriately recorded in the official County Recorders office, for the County in which the real property is located. In a Purchase transaction the meeting between the buyer, seller and lender (or their agents) where the property and funds legally change hands. Also called settlement.

CLOSING COSTS - the costs and fees associated with obtaining your mortgage that are assessed at the closing or settlement. "Closing Costs" normally are itemized and charged per item (except for the origination and/or discount POINTS), they are usually billed by outside non-affiliated vendor/suppliers to the transaction. They often can include charges and fees for escrow, legal & title insurance, notary, tax service and flood certification fees, underwriting, credit report, processing, document preparation, photo inspection, real estate appraisal, appraisal review, administration fees, courier, wire transfer fees, recording fees, warehouse fee, insurance, admin fees, taxes and other fees. These can easily average $2,300 or more per transaction, depending on the type and size of your loan. “There's No Free Lunch” – there are a lot of vendor/suppliers involved with residential real estate mortgage loans.** SEE 'POINTS' AND 'GOOD FAITH ESTIMATE' BELOW **

CLOUD ON TITLE - any condition revealing in a title search that adversely affects the title to the real property. Usually a 'cloud on title' will require some legal action to clear up the problem, i.e. a deed, release or other recorded document.

COLLATERAL- the real property offered as security for a loan.

COMBINED LTV - the way a lender calculates the (C)LTV on a home equity loan; it is based on the sum of the debts on both mortgages, compared to the fair market value of your home. Up to 80% (C) LTV is common. Costs and fees will likely be higher if the CLTV is higher than 80%.

COMMON AREA - an area owned by the owners or tenants of a condominium complex, or subdivision for the common use of residents; i.e. clubhouse, pool, greenbelt areas.

COMMUNITY PROPERTY - in some states, a form of ownership under which property acquired during a marriage is presumed to be owned jointly, unless acquired as separate property of either spouse.

CO-MORTGAGOR - a second borrower, who signs a mortgage loan with a mortgagor. The co-mortgagor's credit history, income, assets, and debts are combined with the mortgagor's for underwriting and ratio analysis purposes. The co-mortgagor must also hold title to the property.

COMPARABLES - properties used for comparative purposes in the appraisal process that have similar characteristics to the subject property. Also referred to as "comps."

CONDITIONS, COVENANTS AND RESTRICTIONS (CC&Rs) - a recorded document stating the specific conditions that run concurrently with the land.

CONDOMINIUM - a form of real property ownership whereby the purchaser receives title to the interior space of a unit, in a multi-unit structure and a proportional interest in common areas. The size of each unit is measured from the interior surfaces (exclusive of paint and other finishes of the exterior walls, floors and ceiling (air space).

CONFORMING AND NON-CONFORMING LOANS - types of loans available to different categories of borrowers. ‘Conforming' loans follow the strictest guidelines for eligibility as to loan sizes, credit score, rates, income and residence stability, savings and reserves, habits, etc. Therefore, Conforming is for that limited group of customers who are nearly PERFECT. Although we offer both types, from its beginning My Loan World has specialized in non-conforming loans (we refer to them as loans for "real people"). These are now offered in the form of a range of programs, which are tailored to individual circumstances. We know people who are not absolutely perfect.

COVENANT - a legally enforceable promise or restriction in a mortgage. For example, the borrower may covenant to keep the property in good repair, and adequately insured against fire and other casualties. A breach of a covenant in a mortgage usually creates a default as defined by the mortgage and can be the basis for foreclosure.

CONVEY - the act of transferring title to real property from one party to another.

COOPERATIVE (CO-OP) - in real estate, a form of multiple ownership in which a corporation or business trust entity holds title to a property (usually an apartment complex), and grants occupancy rights to shareholder tenants through proprietary leases. Also called co-ops in many areas.

CREDIT RATING - a level assigned to you in determining your eligibility for loans based on your record of payment on financial obligations, your income level, and the amount of available collateral. Order yours today.

CREDIT REPORT - a report that documents a borrower's credit history and current status, published by three credit repositories. Pursuant to the Federal Fair Credit Reporting act (formerly Title VI CCCP) borrowers can obtain a copy of their credit report from the credit repository facility (NOT from a lender or loan agent/ broker) and examine their own credit report. Borrower rights to view their own individual and personal report must be requested by you to the credit repositories, not to a potential credit grantor. No one in the lending/leasing cycle is lawfully allowed to give you a copy of your credit report or allow you to view your credit report. Contact the "bureaus" (800/685-1111, 800/682-7654, 800/888-4213) at their toll-free telephone numbers and/or websites. They are usually quite responsive. PLUS, if you find errors on your credit report, they can fix them accordingly. And by law they MUST.

CREDIT SCORES - the three major credit repositories: Experian, TransUnion, and Equifax have a score ranking level assigned to each customer in their credit files. This "score" is their version of who’s more, and who’s a less risky loan candidate. All three are different, different amounts, different numbers, and they are compiled from different ingredients. The "math" they use is their conclusion as to the "risk in advancing credit to a particular individual" -- their opinions differ. These scores change in significant amounts DAILY, and sometimes in a major way at month end as well. If you heard one of your three "numbers" (scores) from somebody last week, although it could still be "close" to that number now, actually it means nothing today to a new lender! Most lenders and loan brokers utilize the middle score out of the three (but many of the newer funding programs use the "primary repository" instead), for the primary income earner (the potential loan individual who earns the most money). After more than 30 years of computerized study (visit the inventor of FICO "scores") and millions of borrowers tested and tracked, it has been scientifically shown that a medium score at 600, means the lender will lose money on one out of every eight loans it makes. A score of 700 for example, means the lender will lose money on one out of every 1,293 loans it makes! If YOU were a lender and had the opportunity to make all that "interest" (or not), what score would you want from customers that YOU made loans to with your own money??

CREDITWORTHINESS - your credit history, which contains information about your borrowing habits and money-management skills, and which determines a lender's decision about what level "risk" or credit grade to assign you - or even whether the loan should be made.

D
DEBT CONSOLIDATION - paying off, with the proceeds from a refinance or home equity loan, all or most of your higher-interest debts, such as credit card balances. Clearly the most popular type of homeowner type loan in decades - - saves hundreds of dollar monthly and is generally completely tax deductible. Today these loans are ranging typically in the $30,000 to $50,000 size. Monthly family budget relief in the $400 to $800 range or more is typical.

DEBT SERVICE - the combined principal and interest you pay on loans each month.

DEBT-REDUCTION PLAN - a strategy recommended for those borrowers wishing to use the smart idea of a home equity loan for debt consolidation. Be careful not to run up credit cards again because it could cost you lost time. Be prudent - it's easy once you're on top of it.

DEBT-TO-INCOME RATIO - the ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her net effective income (FHA/VA loans) or gross monthly income (conventional loans). If 35% or more of your gross monthly income is going out in bill paying, you're a prime candidate for a bill consolidation.

DEED OF TRUST - a security instrument used in some States in lieu of a mortgage.

DEED OF TRUST NOTE - the promissory note that is used with a Deed of Trust on a mortgage loan transaction.

DEFAULT - failure to make payments as agreed.

DELINQUENCY - failure of a borrower to make timely payments under a loan agreement.

DEPOSIT/EARNEST MONEY DEPOSIT - a sum of money given to (1) bind a sale of real property, or (2) assure payment or an advance of funds in the process of a loan.

DEPRECIATION - a decline in value of a building or other real property improvement, resulting from age, physical wear, and economic or functional obsolescence. This figure is deducted annually from net income.

DISCLOSURE - information relevant to specific transactions that is required by law.

DOCUMENTARY STAMP - a mark stamped onto a deed certifying the amount of transfer tax paid. Referred to as tax stamps in certain areas.

DOWN PAYMENT - an amount paid in cash to the seller when a home is purchased. The down payment is the difference between the purchase price and the mortgage amount, and is traditionally 10 to 20 percent of the purchase price. Although, many loans are now available that require smaller down payments, and in some cases (with decent/average credit scores), no down payment is needed. Typically, a weaker credit background means more down payment will be needed. Better historical credit backgrounds mean low or no down payment may be required by the lender when buying a home. NO (or very little) DOWN PAYMENT PLUS NO (or very little) GOOD CREDIT -- MEANS NO LOAN.

E
EARNED AND UNEARNED INCOME - two different sources of income. While earned income comes from wages, salary or business profits, unearned income refers to interest, dividends, rental income, pension benefits, and the like.

EARNEST MONEY - a deposit made to bind the conditions of a sale of real property.

EASEMENT - a right to the limited use or enjoyment of land held by another. It’s also an interest in land to enable sewer or other utility lines to be laid, or to allow access to a property.

ECONOMIC LIFE - the estimated period of time during which a property can be used by its owners to produce income.

ECONOMIC VALUE - the value of a property based on its earning potential.

EFFECTIVE AGE - for purposes of appraisal, the physical age given to a building based on its present condition, which may differ from its actual age.

EFFECTIVE GROSS INCOME (PERSONAL) - normal annual income including overtime that is regular or guaranteed. This income may be from more than one source. Salary is normally the principal source, but other income may qualify if it is significant and stable, and is expected to continue over a minimum two-year period.

EMINENT DOMAIN - the right of governmental bodies, public utilities, and public service corporations to take private property for public use (e.g., schools and roads), upon payment of its fair market value.

ENCROACHMENT - an improvement that illegally violates another's property or rights to use that property.

ENCUMBRANCE - anything that affects or limits the fee simple title to real property such as mortgages, leases, easements or restrictions.

EQUAL CREDIT OPPORTUNITY ACT (ECOA) - a Federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, sexual preference, marital status, or receipt of income from public assistance programs. It’s also called Regulation B.

EQUITY - the difference between the fair market value and current indebtedness. It’s also referred to as the owner's interest.

ESCAPE CLAUSE - a clause that allows an applicant to cancel in situations that would not necessarily justify cancellation.

ESCROW - a special account set up by the lender in which money is held to pay for taxes and insurance. "Escrow" can also refer to a third party who carries out the instructions of both the buyer and seller to handle the paperwork at the settlement.

ESCROW AGENT - the person or organization having a fiduciary responsibility to both the buyer and seller (or lender and borrower) to see that the terms of the real property purchase/sale (or loan) are carried out as agreed. Also called escrow company or escrow depository.

ESCROW ANALYSIS - the periodic examination of escrow accounts to determine if current monthly deposits will provide sufficient funds to pay taxes, insurance and other bills when due.

ESCROW COMPANY - an organization established to act as an escrow agent.

ESCROW CONTRACT - a three-party agreement between the buyer, seller, and escrow agent specifying the rights and duties of each in the real property transfer transaction.

ESCROW OVERAGE OR SHORTAGE - the difference, determined by escrow analysis, between escrow funds on deposit and escrow funds required to make an "escrow payment" when it becomes due.

ESCROW PAYMENT - that portion of a mortgagor's monthly payments held by a lender or servicer to pay taxes, hazard insurance, mortgage insurance, lease payments, or other items as they become due. These are also called impounds or reserves in some States.

ESTATE - the ownership interest an individual has in real property. The total sum of all the real and personal property owned by an individual at the time of death.

EVICTION - the lawful expulsion of an occupant from real property.

EVIDENCE OF TITLE - proof of ownership of real property.

EXAMINATION OF TITLE - the review process of the chain of title as revealed by an abstract of title or public record.

EXCLUSIVE LISTING - a written contract giving one licensed real estate agent the exclusive right to sell a parcel of real property for a specific period of time.

F
FAIR CREDIT REPORTING ACT (FCRA) - a Federal law, in part, giving one the right to see his or her credit report so that errors may be corrected. A lender loan broker/agent (credit grantor) refusing to advance credit based upon a credit report it receives from a credit repository is compelled by law to reveal to the potential borrower the name of the credit repository which issued the lender loan broker/agent with the credit report. You are permitted to see that report and obtain a copy of it - BUT not from the lender loan broker/agent. Your copy must be obtained directly from the credit repository.

FAIR MARKET VALUE - the price at which a property is transferred between a willing buyer and a willing seller, each of whom has a reasonable knowledge of all pertinent facts, and neither being under any compulsion to buy or sell. Generally, it’s the likely selling price of your home, as appraised.

FANNIE MAE (FNMA) - The Federal National Mortgage Association (FNMA) - the nation's largest mortgage investor. Created in 1968 by an amendment to Title III of the National Housing Act (12 USA 1716 et seq.) to fund FHA type loans. This stockholder owner corporation, a portion of whose Board of Directors is appointed by the President of the United States, supports the secondary market in mortgages on residential property with mortgage purchase money and securitization programs for "conforming" residential real property loans ("conforming" started in the early 1970's).

FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA) - Federal agency, which among other things, directs the activities of the Federal Insurance Administration and establishes flood insurance rates and terms of coverage, issues policies, processes claims, and identifies and maps flood-prone areas nationwide.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) - a Great Depression agency originally established by the Federal Banking Act of 1933 to protect depositors from loss.

FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - See FreddieMac below.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - see FannieMae above.

FF&E- "Furniture, Fixtures & Equipment", a phrase often used in commercial equipment leasing. A combination of items like "furniture" (in lobby of dentist, lawyer), "fixtures" (liquor store room mounted central air conditioner, security system, shelving for book store) & "equipment" (bakery baking equipment, restaurant walk-in refrigerator/freezer) commonly utilize commercial small business equipment finance-lease structures.

FHA (FEDERAL HOUSING ADMINISTRATION) MORTGAGE - a loan insured by the Federal Housing Administration. FHA mortgages require lower down payments than conventional mortgages and also feature less stringent income and financial requirements.

FIRST AND SECOND MORTGAGES - the documents which entitle a lender to the property who secures the loan if the borrower fails to meet his or her obligations per the loan arrangement. While your first mortgage enables you to buy your home, a second mortgage provides for refinancing and literally hundreds of different lifetime opportunities (see difference between "mortgage" and "trust deed").

FIRST LIEN - primary claim by the lender for satisfaction of outstanding debt. Gives lender the right to raise this money by foreclosing on the property if you fail to make payments as agreed.

FIXED AND ADJUSTABLE RATES - the way the interest on your loan is determined. A fixed rate of interest remains the same over the life of the loan; an adjustable (or "variable") rate changes, increasing or decreasing periodically according to an index, which reflects general trends.

FIXED-RATE MORTGAGE - a mortgage with an interest rate that remains constant for the life of the loan. The most common fixed-rate mortgage is repaid over a period of 30 years. 15-year fixed-rate mortgages are also available.

FORBEARANCE - the act of refraining from taking legal action despite the fact that the mortgage is in arrears. It is usually granted only when a mortgagor makes satisfactory arrangements to pay the delinquent amount owed at a future date.

FREDDIE MAC (FHLMC) - The Federal Home Loan Mortgage Corporation (FHLMC), the second largest investor of residential real estate mortgage loans, created by Congress in Title III of the Emergency Home Finance Act of 1970 (12 USC 1451 et seq.), to provide an alternative source to FannieMae for "conforming" residential real estate mortgage loans. This stockholder owned corporation, a portion of whose Board of Directors is appointed by the President of the United States, supports the secondary market in mortgages on residential property with mortgage purchase money and securitization programs for "conforming" residential real property loans.

FRONTAGE - the property line abutting the most important adjacent property; usually a street, lake, river or ocean.

FULL INCOME VERIFICATION - a requirement for fully documented proof of income; loans that contain this requirement can usually offer lower interest rates as opposed to no-income verification programs.

FUNCTIONAL DEPRECIATION - in real estate, a loss of value due to advancements in technology or design that makes the features of the current facility obsolete. Also called functional obsolescence.

G
GOOD FAITH ESTIMATE (GFE) - a written estimate that you sign. The lender/loan agent must provide you with a GFE within 3 days from receipt of your consumer residential real property loan application credit package. It is a government required document and must contain a detailed itemization of the amount the lender/loan agent proposes to charge you. Although it can’t accurately depict the ‘exact’ final numbers, it must be the lender/loan agent's "best estimate" of the proposed transaction they believe you will qualify at this stage in the loan process. As you will note, a great deal of the "costs" are paid to various non-affiliated outside vendors and suppliers to the transaction. The GFE disclosure details the anticipated costs early enough in the process for you to ask necessary questions and comment and/or compare costs.

GRACE PERIOD - a period of time (usually measured in days) after an obligation is due during which a borrower can perform without incurring a penalty and without being considered in default.

GRADUATED PAYMENT MORTGAGE (GPM) - a type of flexible payment mortgage where the payments increase for a specific period of time and then level off. Usually results in negative amortization.

GRANTEE - the person to whom an interest in real property is conveyed.

GRANTOR - the person conveying an interest in real property.

GROSS LIVING AREA - the total floor area of a building measured from the outside of the exterior wall.

GROSS INCOME - total income produced by a rental piece of real property, before deduction of expenses.

GROSS RENT MULTIPLIER - a figure used to compare rental properties. It is derived from the relationship between gross rental income and sales price.

GROWING EQUITY MORTGAGE (GEM) - a graduated payment mortgage in which increases in a borrower's mortgage payments are used to accelerate reduction of principal on the mortgage. Due to increased payments, the borrower acquires equity more rapidly and retires the debt earlier.

H
HOME EQUITY - the part of your home that you own outright; right now. That is, the difference between its appraised value and the balance of your mortgage loans. Using the "equity" for a loan has been commonly called a "second mortgage" for years. Today’s we commonly refer to it as a “home equity loan.”

HOME IMPROVEMENT LOAN - a mortgage to finance an addition to or rehabilitation of a residence.

HOME MORTGAGE DISCLOSURE ACT (HMDA) - Federal legislation, which requires certain types of lenders to compile and disclose data on where their mortgage and home improvement loans are being made.

HOMEOWNERS ASSOCIATION (HOA) - a nonprofit organization that manages the common areas and services of a planned unit development (PUD) or condominium project. In a condominium project, it has no ownership interest in the common areas; in a planned unit development it holds title to common areas.

HOMEOWNER'S POLICY - a multiple peril insurance policy available to owners of private dwellings, which covers the dwelling and its contents as well as personal liability.

HOMEOWNERS WARRANTY PROGRAM (HOW) - an insurance program through which participating builders provide homebuyers with a warranty on the workmanship and materials of a home and warrant against major structural defects.

HOMESTEAD ESTATE - in some states, a statutory exemption that prohibits the attachment or sale of owner-occupied properties to pay the claims of creditors.

HOUSING EXPENSE RATIO - the relationship of a borrower's monthly payment obligation on housing (principal, interest, taxes, insurance and other applicable housing expenses) divided by gross monthly income, expressed as a percentage - also called the top ratio.

HUD-1 UNIFORM SETTLEMENT STATEMENT - the standard form used to disclose costs of closing. All charges imposed in the transaction must be disclosed separately and in detail.

I
INDEX - an economic indicator, usually a published interest rate that determines changes in the interest rate of an ARM. ARM rates are adjusted to reflect changes in the index. The margin is the amount a lender adds to the index to establish the actual interest rate on an ARM.

IN FILE CREDIT REPORT - a computer generated credit report of credit and legal information obtained from a credit repository. Some in file credit reports may be a tri-merge of the three credit reporting agencies.

INFLATION - an increase in he amount of money or credit available in relation to the amount of goods or services available. This causes an increase in the general price level of services and goods. In time, inflation reduces the purchasing power of the dollar, thus making it worth less money.

INITIAL INTEREST RATE - the original interest rate on a mortgage at the time of loan closing. This rate changes on an adjustable rate mortgage (ARM). The initial interest rate is also known as a start rate or teaser rate.

INGRESS AND EGRESS - the right to enter and exit land.

INSOLVENCY - a condition in which a debtor is unable to pay his or her creditors.

INSTALLMENT - the periodic payment that a borrower agrees to pay a lender.

INSTALLMENT LOAN - borrower money that is repaid in payments, known as installments.

INSTITUTIONAL LENDER - a financial institution that lends to the general public. Some examples are mutual savings banks, commercial banks, federal savings banks (formerly called savings and loans), pension and trust funds, and life insurance companies.

INSURABLE INTEREST - the interest of an owner, lessee, mortgagee or trustee, which is insured against financial loss in the case of specified events.

INSURANCE - a contract that provides compensation for specific losses in exchange for a periodic payment.

INSURED LOAN - generally speaking, a mortgage loan insured by FHA or a private mortgage insurance company.

INTEREST (LOANS) - the sum paid for borrowing money, which pays the lender's costs of doing business along with repaying the lenders source of money as well. "Interest Rates" are typically a function of market conditions, expenses, and borrower risk of loss probability. For example, all things being equal, if you compared the same exact loan - lender to lender to lender, they'll normally cost approximately the same.

INTEREST RATE CEILING - for an adjustable rate mortgage (ARM) loan, it's the maximum interest rate, as specified in the mortgage note or deed of trust's note.

INTEREST RATE FLOOR - again, for an adjustable rate mortgage (ARM) loan, it's the lowest rate, as specified in the mortgage note or deed of trust's note.

INVESTMENT PROPERTY - a real property that is not occupied by the owner.

INVESTOR - any person or institution that invests in mortgage instruments or other items of value.

INDIVIDUAL RETIREMENT ACCOUNT (IRA) - a retirement account that allows individuals to make tax deferred contributions to a personal retirement fund. Individuals can place IRA funds in bank accounts or other forms of approved investments accounts - such as stock, bonds, or mutual funds.

L
LENDER BUY-DOWN MORTGAGE - a convertible mortgage offering a discounted interest rate at the beginning of the loan that gradually increases to an agreed upon fixed-rate over the first few years of the loan. It provides lower initial payments and a stable monthly rate, but the final rate may be somewhat higher than on a standard fixed-rate mortgage.

LIABILITY INSURANCE - insurance covering the risks related to the property and personal liability claims of other parties against the insured party.

LIBOR - see London Interbank Offered Rate below.

LOAN APPLICATION - typically a combination of standardized government forms and miscellaneous forms provided by the lender - 1003 (loan application) is the most common one. A condensed and more simple version is located on our website and may be found under the “Apply for a Loan” section of this website.

LOAN ORIGINATION FEE - the fee charged by a lender/loan agent (sometimes called "points") to make the funds available to you.

LOAN PROCEEDS - part of the money you borrow.

LOAN-TO-VALUE RATIO - the relationship between the amount of the consumer residential real estate mortgage loan and the appraised value of the property expressed as a percentage. In some cases, we fund loans at LTV's in excess of 100%, called 125's, - no equity, or partially secured lending. 125% loans however, require a strong credit score (national average score is 689 for 125% LTV customers), with very few (if any) modest negative credit items in your credit report file.

LOAN TYPES:

Conforming - Conforming loans refer to a residential real estate loan in amounts that conform to CONSERVATIVE government lending standards as determined by Fannie Mae & Freddie Mac (the original government agencies, set up in the early 1940's, established to help people finance new homes). Conforming loans (on single family homes) range in amounts up to $322,700. Although conforming loans are serviced by these government agencies, the mortgage industry has adopted the term to express loan quality standards and amounts in this range. These generally are "quoted" as the lowest rates you see around (to get your attention). Normally utilized for purchasing a home with a 20% down payment, loads of documentation needed, and nearly perfect credit is required. The quoted low rates sound wonderful, but not everyone falls into the "CONFORMING" category.

Jumbo - Jumbo loans refer to those loan amounts outside of the "conforming" range of loan amounts of above $322,700.

Investment Properties (Non-Owner Occupied) - These types of homes are normally acquired specifically for investment purposes or are owned as a result of moving to a new house without selling or being able to sell the old house. Financing for investment properties can be achieved using any of the above described programs. Typically, the rates are a bit higher and the LTV's can be a bit lower.

Non-Conforming – Could be an applicant with a 'conforming' type-high quality credit history, but someone looking for a mortgage loan with more lenient standards than the conservative 'conforming' guidelines. Also applies to customers with credit scores that are below the 'conforming' range. 'Non-conforming' lenders help over 60% of all loan applicants; however the rates will be higher. Higher rates are often times better than receiving a loan denial.

No Document or Low Document Loans - In certain situations it is either difficult or impossible for potential borrowers to show a lender their "taxable" income on paper. In these instances any of the programs described above can be used, but under circumstances called No Income Verification (or NIV). All of the other program parameters must be met; however, in the case of income, a borrower may only be required to show an operating license or business license and/or limited income information. With this type of financing, rates & fees offered tend to be slightly higher. This type of financing is recommended for self-employed borrowers or borrowers who have difficulty showing their income on paper.

Cash-Out Refinances - Favorable only under low or dropping interest rate markets. This is a substitute for home equity (second mortgage) lending and is typically more costly.

LONDON INTERBANK OFFERED RATE (LIBOR) - the rate at which banks in the foreign market lend dollars to one another. LIBOR varies by deposit maturity. This moving standard, is a common interest rate index, it's one of the most valid barometers of the international cost of money. A guide used by many lender-funding sources for ARM loans.

LOSS PAYABLE CLAUSE - an insurance policy provision for payment of a claim to someone, other than the insured, who holds an insurable interest in the insured property.

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MANUFACTURED HOME - factory built or pre-fabricated housing including mobile homes. Generally they must be a 'double-wide' on a permanent foundation for any mortgage company to consider funding. Basically, you must already own the dirt.

MARKET VALUE - the highest price that a buyer and the lowest price that a seller would accept, neither one being compelled to buy or sell; also called Fair Market Value.

MAXIMUM LOAN AMOUNT - highest loan dollar amount allowed under Federal or conventional guidelines. In commercial real estate, the highest loan dollar amount that a property can support based on projected income.

MECHANIC'S LIEN - a claim created by law to secure priority of payment for work performed and materials provided by a vendor. Land may be attached as well as building, equipment or other property.

METES AND BOUNDS - a description of a parcel of land in a deed in which the boundaries are defined by directions and distances.

MINIMUM PROPERTY STANDARDS - regulations and guidelines used as underwriting criteria that set forth acceptable property standards and specifications.

MOBILE HOME - a factory-assembled residence consisting of one or more modules in which a chassis and wheels are an integral of the structure, and can be readied for occupancy without removing the chassis and/or wheels.

MODULAR HOME - a factory-assembled residence built in units or sections, transported to a permanent site and erected on a foundation. Excludes mobile homes.

MORTGAGE - a pledge of property, especially real property, or security for a debt. In many States this document is a Deed of Trust. The document may contain the terms of repayment of the debt.

MORTGAGE BANKER - an individual, firm or organization that originates, sells and/or services loans secured by mortgages on real property.

MORTGAGE BROKER - a firm or individual who, for a commission, matches borrowers and lenders.

MORTGAGE COMMITMENT - an agreement between lender and borrower detailing the terms of a mortgage loan, such as interest rate, loan type, term and amount.

MORTGAGE INSURANCE (MI) - insurance that protects mortgage lenders against loss in the event of default by the borrower. This allows lenders to make conventional refinance loans at higher loan-to-value rations, and purchase money loans with lower down payments. The Federal government offers MI through HUD/FHA; private entities offer MI for conventional loans.

MORTGAGE INSURANCE CERTIFICATION - certificate issued by HUD/FHA as evidence that a mortgage has been insured and that a contract of mortgage insurance exists between HUD/FHA and the lender incorporating HUD/FHA regulations identified in the certificate. There is a premium payment paid by the borrower for this.

MORTGAGE INSURANCE PREMIUM (MIP) - the amount paid by a mortgagor (borrower) for mortgage insurance either to FHA or a private mortgage insurance company.

MORTGAGE NOTE - a written promise to pay a sum of money at a stated interest rate, during a specific term. A mortgage note is secured by a mortgage.

MORTGAGEE - the lender in a mortgage transaction MORTGAGEE CLAUSE - a clause that may be attached to an insurance policy stipulating that the lender will receive a portion of insurance proceeds sufficient to satisfy the unpaid amount of a loan in the event of loss.

MORTGAGOR - the borrower in a mortgage transaction who pledges real property as a security for a debt.

MULTIPLE LISTING SERVICE (MLS) - a service provided by the Board of Realtors, which allows access to real estate listings of properties for sale or lease.

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NEGATIVE AMORTIZED (NEG/AM) - the unpaid interest that is added to the mortgage principal in a loan where the principal balance increases rather than decreases because the monthly mortgage payments do not cover the full amount of the interest that's due.

NEG AM LOANS - a popular type of an Adjustable Rate Mortgage (ARM) loan, where the initial interest rate (start-rate) is very low; therefore monthly payments are smaller than other type loans. These loans have interest rates that adjust periodically and monthly payments that also change. There normally is a CAP, or ceiling, which limits the amount the interest rate can go up (fully indexed), AND also a separate limit on the size the monthly payments can increase as well (usually limited to a 7.5% annual payment size increase). Perfect for people with strong income 'potential' - bigger home now for less money monthly.

NEGATIVE CASH FLOW - the deficit that is created when expenditures required to maintain an investment exceed income received on the property.

NET WORTH - the value of all assets including cash less total liabilities. Often used as an underwriting guideline to indicate creditworthiness and financial strength.

NO CASH-OUT REFINANCE (RATE & TERM RE-FI) - transaction in which the mortgage amount is limited to the sum of the unpaid principal balance of any existing mortgages plus closing costs.

NON-CONFORMING MORTGAGE LOAN - a residential mortgage loan in which the loan amount, the loan-to-value ratio, the term, the credit score, or some other aspect (or combination of characteristics) of the loan exceeds permissible limits as specified in (GSE) agency regulations. Rates & fees are always higher than 'conforming' rates.

NOTE - a general term for any kind of paper or document signed by a borrower that is an acknowledgment of the debt and is, by inference, a promise to pay. When the note is secured by a mortgage, it is called a mortgage note and the mortgagee is named as the payee.

NOTICE OF COMPLETION - notice recorded after completion of construction. Mechanic's liens must be filed within a specific period of time thereafter.

NOTICE OF DEFAULT - notice recorded after a default under a deed of trust or mortgage has occurred. Also, the notification sent to defaulting borrowers required by insurers or guarantors - such as FHA, VA, or certain mortgage insurance companies.

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OBSOLESCENCE - loss of value resulting from outdated physical features, technical advances, or economic influences.

OFF-SITE IMPROVEMENTS - improvements outside the boundaries of a property that enhance its value such as sidewalks, streets, curbs and gutters.

ON-SITE IMPROVEMENTS - any construction of buildings or other improvements within the boundaries of a property that increase its value.

ORDINARY INCOME - income subject to tax at full or ordinary rates, rather than a capital gains rate.

ORIGINATION - marketing and attracting, then securing a completed mortgage loan application from a commercial or residential borrower.

ORIGINATION FEES - the fee charged by a broker/lender (sometimes called "points") to make the funds available to you.

ORIGINATOR - a person who assists a borrower with the application for a mortgage loan.

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PAR - a price of 100 percent of face value.

PARTIAL PAYMENT - receipt of less than the full payment due in a loan collection.

PARTNERSHIP - a business association of two or more owners who share in the profits and losses of he business. Partners are jointly and severally liable for the debts of the business enterprise.

PARTY WALL - a wall built on a line between two adjoining properties and common to both owners.

PAYMENT SHOCK - a scenario in which monthly mortgage payments on an adjustable rate mortgage (ARM) rise so high that the borrower may not be able to afford the payments. Many consumer protection guidelines regarding extremely low initial "teaser" rates, lifetime ceilings, and annual caps are designed to prevent payment shock.

PAYOFF FIGURES - the unpaid principal balance, plus any negative escrow amounts, plus accrued and unpaid interest, late charges, prepayment penalties, and other possible fees to be used for payment in full of a mortgage or other lien.

PERMANENT FINANCING - a mortgage loan usually covering development costs, interim loans, construction loans, and financing expenses that are put in place when the property is completed.

PERSONAL PROPERTY - any property that is not real property.

PHYSICAL DEPRECIATION - decline in the value of a physical asset or real property resulting from normal usage, age, wear and tear, disintegration or action of the elements. Depreciation can be curable or incurable.

PIGGYBACK LOAN - the combination of both a first and second mortgage being recorded concurrently on a single piece of property. A single mortgage lender may originate both loans, or two different lenders may originate the loans. In either event the two loans are recorded by priority.

PITI (PRINCIPAL, INTEREST, TAXES AND INSURANCE) - the four components that are included in the monthly mortgage payment. Principal and interest are the portions of the payment assigned to repay the mortgage itself; taxes and insurance are paid by your lender into a special escrow account to pay for homeowners insurance and property taxes.

POINTS (LOAN DISCOUNT POINTS) - prepaid interest on a mortgage that is usually paid at the time of closing. Each "point" is equal to one percent of the total amount of a mortgage (one point on an $80,000 mortgage is $800, or 1 percent of 80,000). Most lenders offer mortgages with several combinations of points and interest rates; generally, the lower the interest rate, the more points you will pay at settlement and the term of the loan will typically be shorter. Don't confuse "points" and "closing costs." (** SEE GOOD FAITH ESTIMATE **)

POINTS (typically charged) - the residential FIRST MORTGAGE market today for 'conforming' applicants is in the zero to two to two and a half point range. 'Non-conforming' customers (about 60% of everybody else) are generally charged one to three points, while SECOND MORTGAGES are often in the two to five point range with most home equity specialty companies; especially when the typical customer is looking for higher Combined LTV's (CLTV). These are essentially industry averages and they represent the amount we normally charge at My Loan World

PORTFOLIO LENDER - a funding source that holds loans in their own portfolio and does not sell them to investors in the secondary market. These lender/funding sources usually hold the loans until their maturity or until the loan is paid off.

PRE-APPROVAL OR PRE-QUALIFICATION (prequal) - an early assurance by a lender/loan broker that you appear to meet the requirements for a specific type of loan. Unless subsequent supporting documentation doesn't adequately confirm the initial supplied information, "prequals" rarely change.

PRELIMINARY TITLE SEARCH - a real property title search performed by a title insurance company prior to issuance of a title binder or commitment to insure.

PREPAID ITEMS - costs paid at closing for taxes, interest, and insurance. Because prepaid items are recurring costs that do not relate to the acquisition of the real property itself they cannot be financed.

PREPAID INTEREST - mortgage loan interest that is paid in advance of when it is due to obtain tax advantages, or as required by a lender at closing for the number of days between he loan closing date and 30 days prior to the first scheduled payment due date.

PREPAYMENT - the payment of all or part of a mortgage debt before it is due.

PRE-PAYMENT PENALTY - a charge the mortgagor pays the mortgagee for the privilege to prepay the loan. These are quite common in most states; they can be "bought-down" or "bought-out" at origination in many cases.

PRE-QUALIFICATION - evaluation of a potential borrower's financial status and other characteristics used to determine the size and type of mortgage which is likely available.

PRIME RATE - the interest rate commercial banks typically charge their most creditworthy commercial customers for short-term loans. "Prime" is a yardstick for trends in interest rates and it is often a baseline for establishing interest rates on higher-risk loans. Each bank sets its own separate "prime rate." It does NOT directly affect mortgage rates like you think.

PRIMARY RESIDENCE - the residence the owner physically occupies and uses as his or her home.

PRINCIPAL - the original balance of money lent, excluding interest. Also, the remaining balance of a loan, excluding interest.

PRIVATE MORTGAGE INSURANCE (PMI) - a policy of insurance issued by an insurance company protecting the mortgage lender against financial loss in the event a borrower defaults on a mortgage loan. The borrower pays the premium. The lender is the beneficiary of the insurance policy (it's like the insurance company is the co-signer/guarantor on the loan).

PRO RATE - the allocation of proportionate shares of income, ownership, or of an obligation that a buyer and seller share at the time of closing in a purchase transaction.

PROMISSORY NOTE - a written promise to pay a specific amount at a specified time.

PUD (Planned Unit Development) - a comprehensive development plan for a large land area. A PUD usually includes residences, roads, schools, recreational facilities, commercial office and industrial areas. Also, a subdivision having lots of areas owned in common and reserved for the use of some or all of the owners of the separately owned lots.

PURCHASE AGREEMENT - a written agreement/contract as between a buyer and a seller of real property setting froth the price and the other terms of the sale.

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QUALITY CONTROL - policies and procedures designed to maintain optimal levels of quality, accuracy and efficiency in the production, selling and servicing of mortgage loans.

QUIT CLAIM DEED - a deed relinquishing all right, title and interest or claim an owner has in a piece of real property. Such a deed implies no warranty.

QUOTE - see rate shopper below. What sales types tell people to "hook them;" often it's not what you end up getting!

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RATE SHOPPER - someone, like all of us, who wants VALUE of their buck. Unfortunately the "rate" is not the central difference as between any two lenders. They can be different from lender to lender, because of your credit score (which changes daily - see credit score above), the lien position (first or second mortgage,) proposed loan size, dollar amount of real estate appraisal vs. the size of the new proposed loan (Loan-To-Value percentage), property marketability, repair and condition, it's uniqueness to the neighborhood, your income source(s) and their long term stability, your historic income stream, your past and present credit records, it's depth, variety and quality, your capacity to be able to repay the loan according to the terms dictated by the lender, and most importantly the overall common sense of your request and the "reason" for the loan (purchasing, re-finance [no cash-out], equity advance, bill consolidation, home improvement etc ). For any 'rate quote' to even be remotely close to the final number, you need to supply the lender/broker agent with a COMPLETE application and have a three (3) credit bureau merged credit report run on you (and any other applicants) for the lender/broker agent to be able to give you a thorough answer about your eligibility to qualify for a particular rate. It's NOT one rate fits all in residential real estate mortgage lending. You getting a QUICK ANSWER, won't be the REAL ANSWER. QUICK IS GREAT FOR HAMBURGERS, BUT NOT FOR CREDIT DECISIONS.

REAL PROPERTY - land and objects permanently attached to it, such as buildings and fences. In some States, this term is synonymous with the term "real estate."

REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) - a federal statute and regulation promulgated by HUD, governing residential real estate lending practices and disclosures.

RECONCILIATION - the last step in the appraisal process, in which all data are compared and the approaches to value considered to arrive at a final estimate of value.

RECONVEYANCE - an instrument used to transfer title from a trustee to the equitable owner of real estate; used when the performance of debt is satisfied under the terms of a deed of trust.

RECORDING - the filing of documents or details of a legal document to make them a matter of public record. Usually requires the witnessing and notarizing of the document or instrument to be recorded.

RED LINING - arbitrary denial of a residential real estate loan application in certain geographical areas, without considering the individual applicants qualifications.

REFINANCING - the repayment of a debt from the proceeds of a new loan, using the same property as security for the new loan.

REGULATION B - Federal Reserve regulation prohibiting discrimination against consumer credit applicants, and establishing guidelines for collecting and evaluating credit information.

REGULATION Z - Regulation written by the Federal Reserve Board to implement the Federal Truth-In-Lending Act, requiring full written disclosures of the credit portion of all consumer loans, including annual percentage rate (APR) etc.

REHABILITATION - restoration of a parcel of real property, or neighborhood to bring it back to its full (highest & best) potential use.

REINSTATEMENT - the curing of all loan defaults by a borrower, to return it to a current status.

RELEASE OF LIABILITY - an agreement by a lender to terminate personal obligation of a mortgagor in connection with payment of a debt.

RELEASE OF LIEN - an instrument discharging secured property from a lien.

RENT CONTROL - legal limitations on rent increases.

REPLACEMENT COST - the money required to replace building structure, with one of equivalent value and function, but not necessarily identical in design or materials.

REPRODUCTION COST - the cost required to reproduce a building using the same or equivalent materials, design and construction methods, less an allowance for depreciation. An element of the cost approach method of appraisal.

RESCISSION - the cancellation of a transaction or contract by law or by mutual consent.

RESTRICTIVE COVENANT - a clause in a deed that denies the buyer full rights to the property in question.

RIDER - an addendum or amendment to a written contract.

RULE OF 78TH'S - a mathematical method used by a lender, usually on installment loans, for calculating an interest rebate on a loan paid off or refinanced prior to its maturity date, also known as the United States Rule.

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SALES CONTRACT - a written agreement between buyer and seller, stating terms and conditions of a sale or exchange of property.

SATISFACTION OF MORTGAGE - the recorded instrument the lender provides, to evidence payment in full of a mortgage debt.

SEASONED MORTGAGE - a mortgage on which payments have been made regularly for a year or longer.

SECOND MORTGAGE (HOME EQUITY LOAN) - a mortgage loan that has rights which are subordinate to a first, or senior lien.

SECURED PARTY - an entity party holding a security interest or lien, also called the mortgagee.

SECURITY INSTRUMENT - mortgage or deed of trust, evidencing the pledge of real estate as collateral for a loan.

SELF-EMPLOYMENT INCOME - the net earnings from your business or profession, determined by subtracting business expenses from gross tax return reported income. For lending documentation purposes, if you didn't pay taxes on it, you didn't earn it.

SELLER CONTRIBUTIONS - payment by the seller or any other interested party of some or all of the purchaser's usual closing costs. Investors and pmi insurers sometimes limit the amount of seller contribution and require lenders to adjust the property's value if contributions exceed limitations. Undisclosed seller contributions (such as decorating allowances, appliances or payment of moving expenses) are made to borrowers outside of closing, and are also subject to investor/lender and insurer restrictions.

SENIOR MORTGAGE (LIEN) - a first mortgage or deed of trust.

SETTLEMENT COSTS - money paid by borrower (and seller if a purchase transaction) to effect the closing of a mortgage loan, including payments for title insurance, survey, attorney fees, and such prepaid items as taxes and insurance escrow.

SITE DEVELOPMENT - all improvements made to a site, such as clearing, grading and the installation of public utilities, before the actual construction of a building.

SITE VALUE - the value of land without improvements, as if vacant.

SPECIAL ASSESSMENT DISTRICT - a governmental subdivision with the power to tax and improve property within its jurisdiction. Also called special improvement district.

SPOT LOANS- single family residential real estate mortgage loans solicited on an individual basis, rather than through Realtor referrals, or otherwise.

SUBCONTRACTOR - a person or company contracted to perform work for a developer or general contractor

SUBDIVISION - improved or unimproved land divided into a number of parcels for sale, lease, financing or development.

SUBORDINATION - the act of a party acknowledging, by a written record, that a debt is inferior to the interest of another in the same property. Subordination may also apply not only to mortgages but to leases, real estate rights and any other types of debt instruments.

SURETY BOND - written evidence of a third party, called the surety, that will be primarily liable for a debt in the case of default.

SURVEY - a measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to known points, its dimensions and the location and dimensions of any improvements.

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TAX LIEN - a claim against property for unpaid taxes.

TENANCY IN COMMON - a form of undivided ownership interest by two or more persons that provides for no right of survivorship. The interest need not be a equal percentages.

TENANT - one who is not the owner, but occupies real property under consent of the owner, and in subordination to the owner's title. The tenant is entitled to exclusive possession, use and enjoyment of the property, usually for a time ands amount specified in a lease or rental agreement.

TERM - the period of time between the commencement date and termination date of a note, mortgage, deed of trust, legal document or other contract.

TITLE - written evidence of the right to or ownership in real property. Title may be acquired through purchase, inheritance, devise, gift, or through foreclosure of a mortgage.

TITLE INSURANCE - a contract by which the insurer agrees to pay the insured a specific amount for any loss caused by defects of title to real estate, wherein the insured has an interest as purchaser, mortgagee or otherwise.

TITLE SEARCH - an examination of public records, laws and court decisions, to ensure that no one except the current owner has a valid claim to the property, and to disclose past and current facts regarding ownership of the subject property.

TOWNHOUSE - a row house on a small lot, which has exterior limits common to other similar units. Title to the unit and its lot is vested in the individual owner with a fractional interest in common areas, if any.

TRUSTEE - one who holds legal title to property for the benefit of another, or to secure performance of a specific obligation.

TRUTH-IN-LENDING ACT (TILA) - the Federal Truth-in-Lending Act (PL. 90-321, 15 USC 1601 et seq.) Part of the Consumer Credit Protection Act of 1965, a Federal law that requires lenders to provide full written disclosure of credit terms and conditions, the finance charges, the annual percentage rate (APR), and other fees and charges incurred in a consumer loan agreement.

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UNDERWRITING - the process of deciding whether to make a loan based on credit, employment, assets and other factors. CHARACTER - CAPACITY - COLLATERAL - COMMON SENSE.

UNENCUMBERED PROPERTY - a parcel of real property which is free and clear of debt or liens.

UNIFORM COMMERCIAL CODE (UCC) - a comprehensive code of laws regulating important legal aspects of business and financial transactions.

UNIFORM RESIDENTIAL APPRAISAL REPORT (URAR) - The FNMA 1004/FHLMC 65 standard residential form used by real property appraisers to detail facts supporting the value of single-family properties.

UNIMPROVED LAND - raw land, dirt only.

URBAN RENEWAL - the redevelopment or rehabilitation of real property in an urban area.

USURY - the act of charging borrowers a rate of interest greater than that permitted by law.

V
VA (DEPARTMENT OF VETERANS AFFAIRS) MORTGAGE - government insured loans guaranteed by the Department of Veterans Affairs, requiring very low or no down payments and with generous requirements for qualification. They are available only to veterans of the armed services, those currently on active duty or in the reserves, and their spouses.

VACANCY RATE - the ratio between the number of vacant units and the total number of units in a multi-tenant building or development.

VA FUNDING FEE - a fee the VA charges to guarantee a residential real estate mortgage loan

VA LOAN - mortgage loan made by an approved lender and guaranteed by the Department of Veterans Affairs. VA loans are made to eligible veterans and those currently serving in the military and can have a lower down payment than other type loans.

VALUATION - the estimation of a property's price through appraisal.

VERIFICATION OF DEPOSIT (VOD) - a form that requests and secures verifications of amount on deposit at financial institutions.

VERIFICATION OF EMPLOYMENT (VOE) - a form that requests and secures documentation of a mortgage applicant's work history and/or occupation, to assist in the lender's credit investigation.

VESTED INTEREST - a legal claim or right to the present or future enjoyment of real property