Learning Center Glossary
The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor (borrower), or by using the right vested in the Due On Sale Clause.
|Adjustable Rate Mortgage||
A loan in which the interest rate is periodically increased or decreased to reflect changes in the cost of money; commonly called an ARM.
Can be counted on to qualify if it is received on a regular basis and will continue for another 3 years.
A loan structured to require regular, level payments, each including a portion for principal and a portion for interest. The loan is fully amortized if the payments will pay off the debt in full by the end of the loan term; it is partially amortized if a balloon payment of the remaining principal balance will be required at the end of the term.
|Annual Percentage Rate (APR)||
Under the Truth In Lending Act, the relationship between a loan's total finance charge and the total amount financed, expressed as an annual percentage. The total finance charge includes interest, any discount points paid by the borrower, the loan origination fee, and mortgage insurance costs.
An expert's estimate of the value of a piece of real estate as of a particular date, based on a documented analysis of the property's features; also called a valuation.
An increase in a property's value; the opposite of depreciation.
|Arm's Length Transaction||
Any transaction in which there is no pre-existing family or business relationship between the parties.
A local tax levied against a property for a specific purpose, such as a sewer or street lights.
Anything of value that a person owns. When completing your loan application, you will have to provide the following information regarding your assets: complete information on all bank and money market accounts, two months of current bank statements, current values of stocks, bonds, mutual funds, and other investments, vested interest in retirement funds, face amount and cash value of life insurance, information on any cars and real estate you own; and the value of any significant personal property you own.
Cash or other assets that can be readily turned into cash (liquidated), such as stock.
The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt, unlike a new mortgage where closing cost and new, probably higher, market-rate interest charges will apply.