KNOWLEDGEFINANCIAL.COM
MORTGAGE GOLSSARY/ TERMS AND TERMINOLOGY



PREPARED BY  Mr. ANTONY JEANTY
LICENSED MORTGAGE BROKER ---  STATE OF FLORIDA
786-709-6577


WWW.KNOWLEDGEFINANCIAL.COM

203(b): FHA program which provides mortgage insurance to protect lenders from default; used to finance the purchase of new or existing one- to four family housing; characterized by low down payment, flexible
qualifying guidelines, limited fees, and a limit on maximum loan amount.

203(k): this FHA mortgage insurance program enables homebuyers to finance both the purchase of a house and the cost of its rehabilitation through a single mortgage loan.

A

Amenity: a feature of the home or property that serves as a benefit to the buyer but that is not necessary to its use; may be natural (like location, Woods, water) or man-made (like a swimming pool or garden).


Amortization: repayment of a mortgage loan through monthly installments of principal and interest; the monthly payment amount is based on a schedule that will allow you to own your home at the end of a specific
time period (for example, 15 or 30 years)


Annual Percentage Rate (APR): calculated by using a standard formula, the APR shows the cost of a loan; expressed as a yearly interest rate, it includes the interest, points, mortgage insurance, and other fees
associated with the loan.


Application: the first step in the official loan approval process; this form is used to record important information about the potential borrower necessary to the underwriting process.


Appraisal: a document that gives an estimate of a property's fair market value; an appraisal is generally required by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of
the property.


Appraiser: a qualified individual who uses his or her experience and knowledge to prepare the appraisal estimate.

ARM: Adjustable Rate Mortgage; a mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the Change in monthly
-payment amount, however, is usually subject to a Cap.

Assessor: a government official who is responsible for determining the value of a property for the purpose of taxation.

Assumable mortgage: a mortgage that can be transferred from a seller to a buyer; once the loan is assumed by the buyer the seller is no longer responsible for repaying it; there may be a fee and/or a credit package
involved in the transfer of an assumable mortgage.

B

Balloon Mortgage: a mortgage that typically offers low rates for an initial period of time (usually 5, 7, or 10) years; after that time period elapses, the balance is due or is refinanced by the borrower.

Bankruptcy: a federal law Whereby a person's assets are turned over to a trustee and used to pay off outstanding debts; this usually occurs when someone owes more than they have the ability to repay.

Borrower: a person who has been approved to receive a loan and is then obligated to repay it and any additional fees according to the loan terms.

Building code: based on agreed upon safety standards within a specific area, a building code is a regulation that determines the design, construction, and materials used in building.

Budget: a detailed record of all income earned and spent during a specific period of time.

C

Cap: a limit, such as that placed on an adjustable rate mortgage, on how much a monthly payment or interest rate can increase or decrease.

Cash reserves: a cash amount sometimes required to be held in reserve in addition to the down payment and closing costs; the amount is determined by the lender.

Certificate of title: a document provided by a qualified source (such as a title company) that shows the property legally belongs to the current owner; before the title is transferred at closing, it should be clear and free
of all liens or other claims.

Closing: also known as settlement, this is the time at which the property is formally sold and transferred from the seller to the buyer; it is at this time that the borrower takes on the loan obligation, pays all closing costs,
and receives title from the seller.

Closing costs: customary costs above and beyond the sale price of the property that must be paid to cover the transfer of ownership at closing; these costs generally vary by geographic location and are typically
detailed to the borrower after submission of a loan application.

Commission: an amount, usually a percentage of the property sales price, that is collected by a real estate professional as a fee for negotiating the transaction..

Condominium: a form of ownership in which individuals purchase and own a unit of housing in a multi-unit complex; the owner also shares financial responsibility for common areas.

Conventional loan: a private sector loan, one that is not guaranteed or insured by the U.S. government.

Cooperative (Co-op): residents purchase stock in a cooperative corporation that owns a structure; each stockholder is then entitled to live in a specific unit of the structure and is responsible for paying a portion of the
loan.

Credit history: history of an individual's debt payment; lenders use this information to gauge a potential borrower's ability to repay a loan.

Credit report: a record that lists all past and present debts and the timeliness of their repayment; it documents an individual's credit history.

Credit bureau score: a number representing the possibility a borrower may default; it is based upon credit history and is used to determine ability to qualify for a mortgage loan.

D

Debt-to-income ratio: a comparison of gross income to housing and non-housing expenses; With the FHA, the-monthly mortgage payment should be no more than 29% of monthly gross income (before taxes) and the
mortgage payment combined with non-housing debts should not exceed 41% of income.

Deed: the document that transfers ownership of a property.

Deed-in-lieu: to avoid foreclosure ("in lieu" of foreclosure), a deed is given to the lender to fulfill the obligation to repay the debt; this process doesn't allow the borrower to remain in the house but helps avoid the
costs, time, and effort associated with foreclosure.

Default: the inability to pay monthly mortgage payments in a timely manner or to otherwise meet the mortgage terms.

Delinquency: failure of a borrower to make timely mortgage payments under a loan agreement.

Discount point: normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount, discount points are paid to reduce the interest rate on a loan.

Down payment: the portion of a home's purchase price that is paid in cash and is not part of the mortgage loan.

E

Earnest money: money put down by a potential buyer to show that he or she is serious about purchasing the home; it becomes part of the down payment if the offer is accepted, is returned if the offer is rejected, or is
forfeited if the buyer pulls out of the deal.

EEM: Energy Efficient Mortgage; an FHA program that helps homebuyers save money on utility bills by enabling them to finance the cost of adding energy efficiency features to a new or existing home as part of the
home purchase


Equity: an owner's financial interest in a property; calculated by subtracting the amount still owed on the mortgage loon(s)from the fair market value of the property.

Escrow account: a separate account into which the lender puts a portion of each monthly mortgage payment; an escrow account provides the funds needed for such expenses as property taxes, homeowners
insurance, mortgage insurance, etc.

F

Fair Housing Act: a law that prohibits discrimination in all facets of the homebuying process on the basis of race, color, national origin, religion, sex, familial status, or disability.

Fair market value: the hypothetical price that a willing buyer and seller will agree upon when they are acting freely, carefully, and with complete knowledge of the situation.

Fannie Mae: Federal National Mortgage Association (FNMA); a federally-chartered enterprise owned by private stockholders that purchases residential mortgages and converts them into securities for sale to investors;
by purchasing mortgages, Fannie Mae supplies funds that lenders may loan to potential homebuyers.

FHA: Federal Housing Administration; established in 1934 to advance homeownership opportunities for all Americans; assists homebuyers by providing mortgage insurance to lenders to cover most losses that may
occur when a borrower defaults; this encourages lenders to make loans to borrowers who might not qualify for conventional mortgages.

Fixed-rate mortgage: a mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change.

Flood insurance: insurance that protects homeowners against losses from a flood; if a home is located in a flood plain, the lender will require flood insurance before approving a loan.

Foreclosure: a legal process in which mortgaged property is sold to pay the loan of the defaulting borrower.

Freddie Mac: Federal Home Loan Mortgage Corporation (FHLM); a federally-chartered corporation that purchases residential mortgages, securitizes them, and sells them to investors; this provides lenders With funds
for new homebuyers.

G

Ginnie Mae: Government National Mortgage Association (GNMA); a government-owned corporation overseen by the U.S. Department of Housing and Urban Development, Ginnie Mae pools FHA-insured and
VA-guaranteed loans to back securities for private investment; as With Fannie Mae and Freddie Mac, the investment income provides funding that may then be lent to eligible borrowers by lenders.

Good faith estimate: an estimate of all closing fees including pre-paid and escrow items as well as lender charges; must be given to the borrower within three days after submission of a loan application.

H

HELP: Homebuyer Education Learning Program; an educational program from the FHA that counsels people about the homebuying process; HELP covers topics like budgeting, finding a home, getting a loan, and
home maintenance; in most cases, completion of the program may entitle the homebuyer to a reduced initial FHA mortgage insurance premium-from 2.25% to 1.75% of the home purchase price.

Home inspection: an examination of the structure and mechanical systems to determine a home's safety; makes the potential homebuyer aware of any repairs that may be needed.

Home warranty: offers protection for mechanical systems and attached appliances against unexpected repairs not covered by homeowner's insurance; ,overage extends over a specific time period and does not cover
the home's structure.

Homeowner's insurance: an insurance policy that combines protection against damage to a dwelling and Is contents with protection against claims of negligence )r inappropriate action that result in someone's injury
or )property damage.

Housing counseling agency- provides counseling and assistance to individuals on a variety of issues, including loan default, fair housing, and homebuying.

HUD: the U.S. Department of Housing and Urban Development; established in 1965, HUD works to create a decent home and suitable living environment for all Americans; it does this by addressing housing needs,
improving and developing American communities, and enforcing fair housing laws.

HUD1 Statement: also known as the "settlement sheet," it itemizes all closing costs; must be given to the borrower at or before closing.

HVAC: Heating, Ventilation and Air Conditioning; a home's heating and cooling system.

I

Index. a measurement used by lenders to determine changes to the Interest rate charged on an adjustable rate mortgage.

Inflation: the number of dollars in circulation exceeds the amount of goods and services available for purchase; inflation results in a decrease in the dollar's value.

Interest: a fee charged for the use of money .

Interest rate: the amount of interest charged on a monthly loan payment; usually expressed as a percentage.

Insurance: protection against a specific loss over a period of time that is secured by the payment of a regularly scheduled premium.

J

Judgment: a legal decision; when requiring debt repayment, a judgment may include a property lien that secures the creditor's claim by providing a collateral source.


L


Lease purchase: assists low- to moderate-income homebuyers in purchasing a home by allowing them to lease a home with an option to buy; the rent payment is made up of the monthly rental payment plus an
additional amount that is credited to an account for use as a down payment.

Lien: a legal claim against property that must be satisfied When the property is sold


Loan: money borrowed that is usually repaid with interest.

Loan fraud: purposely giving incorrect information on a loan application in order to better qualify for a loan; may result in civil liability or criminal penalties.

Loan-to-value (LTV) ratio.- a percentage calculated by dividing the amount borrowed by the price or appraised value of the home to be purchased; the higher the LTV, the less cash a borrower is required to pay as
down payment.

Lock-in: since interest rates can change frequently, many lenders offer an interest rate lock-in that guarantees a specific interest rate if the loan is closed within a specific time.

Loss mitigation: a process to avoid foreclosure; the lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on his or her loan

M

Margin: an amount the lender adds to an index to determine the interest rate on an adjustable rate mortgage.

Mortgage: a lien on the property that secures the Promise to repay a loan.

Mortgage banker: a company that originates loans and resells them to secondary mortgage lenders like :Fannie Mae or Freddie Mac.

Mortgage broker: a firm that originates and processes loans for a number of lenders.

Mortgage insurance: a policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan; mortgage insurance is required primarily for borrowers with a down
payment of less than 20% of the home's purchase price.

Mortgage insurance premium (MIP): a monthly payment -usually part of the mortgage payment - paid by a borrower for mortgage insurance.

Mortgage Modification: a loss mitigation option that allows a borrower to refinance and/or extend the term of the mortgage loan and thus reduce the monthly payments.

O

Offer: indication by a potential buyer of a willingness to purchase a home at a specific price; generally put forth in writing.

Origination: the process of preparing, submitting, and evaluating a loan application; generally includes a credit check, verification of employment, and a property appraisal.

Origination fee: the charge for originating a loan; is usually calculated in the form of points and paid at closing.

P


Partial Claim: a loss mitigation option offered by the FHA that allows a borrower, with help from a lender, to get an interest-free loan from HUD to bring their mortgage payments up to date.

PITI: Principal, Interest, Taxes, and Insurance - the four elements of a monthly mortgage payment; payments of principal and interest go directly towards repaying the loan while the portion that covers taxes and
insurance (homeowner's and mortgage, if applicable) goes into an escrow account to cover the fees when they are due.

PMI: Private Mortgage Insurance; privately-owned companies that offer standard and special affordable mortgage insurance programs for qualified borrowers with down payments of less than 20% of a purchase price.

Pre-approve: lender commits to lend to a potential borrower; commitment remains as long as the borrower still meets the qualification requirements at the time of purchase.

Pre-foreclosure sale: allows a defaulting borrower to sell the mortgaged property to satisfy the loan and avoid foreclosure.

Pre-qualify: a lender informally determines the maximum amount an individual is eligible to borrow.

Premium: an amount paid on a regular schedule by a policyholder that maintains insurance coverage.

Prepayment: payment of the mortgage loan before the scheduled due date; may be Subject to a prepayment penalty.

Principal: the amount borrowed from a lender; doesn't include interest or additional fees.

R

Radon: a radioactive gas found in some homes that, if occurring in strong enough concentrations, can cause health problems.

Real estate agent: an individual who is licensed to negotiate and arrange real estate sales; works for a real estate broker.

REALTOR: a real estate agent or broker who is a member of the NATIONAL ASSOCIATION OF REALTORS, and its local and state associations.

Refinancing: paying off one loan by obtaining another; refinancing is generally done to secure better loan terms (like a lower interest rate).

Rehabilitation mortgage: a mortgage that covers the costs of rehabilitating (repairing or Improving) a property; some rehabilitation mortgages - like the FHA's 203(k) - allow a borrower to roll the costs of rehabilitation
and home purchase into one mortgage loan.

RESPA: Real Estate Settlement Procedures Act; a law protecting consumers from abuses during the residential real estate purchase and loan process by requiring lenders to disclose all settlement costs, practices,
and relationships

S

Settlement: another name for closing .

Special Forbearance: a loss mitigation option where the lender arranges a revised repayment plan for the borrower that may include a temporary reduction or suspension of monthly loan payments.

Subordinate: to place in a rank of lesser importance or to make one claim secondary to another.

Survey: a property diagram that indicates legal boundaries, easements, encroachments, rights of way, improvement locations, etc.

Sweat equity: using labor to build or improve a property as part of the down payment

T


Title 1: an FHA-insured loan that allows a borrower to make non-luxury improvements (like renovations or repairs) to their home; Title I loans less than $7,500 don't require a property lien.

Title insurance: insurance that protects the lender against any claims that arise from arguments about ownership of the property; also available for homebuyers.

Title search: a check of public records to be sure that the seller is the recognized owner of the real estate and that there are no unsettled liens or other claims against the property.

Truth-in-Lending: a federal law obligating a lender to give full written disclosure of all fees, terms, and conditions associated with the loan initial period and then adjusts to another rate that lasts for the term of the
loan.

Underwriting: the process of analyzing a loan application to determine the amount of risk involved in making the loan; it includes a review of the potential borrower's credit history and a judgment of the property value.

VA: Department of Veterans Affairs: a federal agency which guarantees loans made to veterans; similar to mortgage insurance, a loan guarantee protects lenders against loss that may result from a borrower default.
MORTGAGE HOME LOANS INFORMATION CENTER:

Purchase a home,  getting a home loan is one of the most important
decision in someone's  lifetime.

That's why it's imperative to get the very best
mortgage information possible, also the best mortgage rate program
available in the market.

By doing so,could literally save you thousands of dollar in the long run!

We  as  experienced loyal loan officers who work hard to ensure that you
know where, who, how, and what.

To obtain the best mortgage service,  each day and everyday.

You're in the market to save money, look no further.
CALL  AT: 786-709-6577  -- SOUTH FLORIDA,  HELP IS AVAILABLE

------------------------------------------------------------------------------------

PRE-QUALIFICATION
You should get yourself pre-qualified for a mortgage loan by a competent &
experienced mortgage loan officer or lenders before you begin shopping.     
--------------------- We can help you do just that.  A  quick  and fast
pre-qualification process


Most sellers will not take you seriously as a potential buyer unless you
you're preappoved.

PRE-APPROVAL lets sellers know that that the bank, or the lending
institution has agreed in principle to approve your mortgage loan.
And this put you as a prospective investor in better position to negotiate and
obtain better deals, better discount, better advantage for the future.
-------------------------------------------------------------------------------------------------------
--------
REAL ESTATE: BUYING, SELLING, LEASING, LISTING. JUST CONTACT A PROFESSIONAL WHO REALLY KNOWS THE FLORIDA MARKET.
--------------------------------------------------------------------------------------------------------------------
We are real estate marketing experts, let us put your property on the market for sale, your listing will
be available to more buyers than you can think off.

CALL Mr. ANTONY AT: 786-709-6577 --- LICENSED REALTOR & LICENSED MORTGAGE BROKER IN THE STATE OF FLORIDA
-----------------------------------------------------------------------------------
I have committed to provide you with specialized real estate service you deserve.   BUY IT,  SALE IT:
OFFICE COMPLEXES, RETAIL CENTERS, APARTMENT BUILDINGS, HOTELS, HOUSES, CONDOS,
TOWN-HOMES, BUSINESSES. -------SOUTH FLORIDA, CALL A PROFESSIONAL REALTOR AT: 786-709-6577
MORTGAGE GOLSSARY/ TERMS AND TERMINOLOGY
Understanding Your Mortgage Statement / TERMS & TERMINOLOGY

Mortgage statements come in many different forms. However, most contain similar terms and information. Here are some
commonly used terms and their definitions that may help you better understand your mortgage statement.
Adjustable-Rate Mortgage (ARM) —
a mortgage loan with an interest rate that is subject to change and is not fixed at
the same level for the life of the loan. These types of loans usually start off with a
lower interest rate but can subject the borrower to payment uncertainty.

Amortization —
the process of paying off a debt by making regular installment payments over a
set period of time, at the end of which the loan balance is zero.

Balloon Mortgage —
a mortgage loan that requires a large payment due upon maturity (for example ,
at the end of ten years).

Collections —
the efforts a lender takes to collect past due payments.

Convertible ARM —
is an Adjustable Rate Mortgage loan that can be converted into a fixed-rate
mortgage during a certain time period.

Deed —
a legal document under which ownership of a property is conveyed.

Deferred Payments —
loan payments that are authorized to be postponed as part of a workout process
to avoid foreclosure.

Delinquency —
failure to make a payment when it is due. A loan is generally considered
delinquent when it is 30 or more days past due.

Equity —
ownership interest in a property after liabilities are deducted.

Escrow Account —
an account where a homeowner’s regular installments to cover taxes and home
insurance are held in trust until due.


VIEW  A SAMPLE OF A MORTGAGE STATEMENT AND
LEARN MORE...


Escrow Analysis —
a periodic review of escrow accounts to make sure that there are sufficient
funds to pay the taxes and insurance on a home when they are due.

Fixed-Rate Mortgage —
a mortgage loan with a fixed interest rate that remains the same for the life of
the loan.

Forbearance —
the lender's postponement of legal action when a borrower is delinquent. It is
usually granted when a borrower makes satisfactory arrangements to bring the
overdue mortgage payments up to date.

Foreclosure —
the legal process by which a property may be sold and the proceeds of the sale
applied to the mortgage debt. A foreclosure occurs when the loan becomes
delinquent because payments have not been made or when the borrower is in
default for a reason other than the failure to make timely mortgage payments.

Foreclosure Prevention —
steps by which the servicer works with the borrower to find a permanent
solution to resolve an existing or impending loan delinquency.

Hazard Insurance —
insurance that is generally required under mortgage contracts to pay for loss or
damage to a person’s home or property.

Home Equity Line of Credit — a way of borrowing money against the equity in one’
s home to pay for things such as home repairs, college education, or other
personal uses.

Interest-Only Mortgage — a mortgage where the borrower pays only the interest
and none of the outstanding principal balance on a loan for a specified amount of
time.

Investment Property — a property not considered to be a primary residence that
is purchased in order to generate income, profit from appreciation, or take
advantage of certain tax benefits.

Lender Placed Insurance — insurance placed on a home or property by a lender
to protect their interest in the collateral which secures the loan.

Mortgage Insurance — insurance that protects lenders against losses caused
by a borrower's default on a mortgage loan. Mortgage insurance (or MI) typically
is required if the borrower's down payment is less than 20% of the purchase
price.

Mortgage — a legal document that pledges property to a lender as security for
the repayment of the loan. The term is also used to refer to the loan itself.

Refinance — the process of replacing an existing mortgage with a new one by
paying off the existing debt with a new, loan under different terms.

Repayment Plan — a borrower promises to pay down past due amounts on a
mortgage while continuing to make regular monthly payments on a home.

Servicer — a firm that works on behalf of the lender in support of a mortgage,
including collecting mortgage payments, ensuring payment of taxes and
insurance, managing escrow accounts, managing communications with the
borrower, and loss mitigation or foreclosure when necessary.

Title — the documented evidence that a person or organization has ownership of
real property.

Work Out — a way to resolve or restructure a loan to prevent someone from
going into foreclosure through a loan modification, forbearance or short sale.
MORTGAGE GOLSSARY/ TERMS AND TERMINOLOGY /
UNDERSTANDING YOUR MORTGAGE STATEMENT
REAL ESTATE FOR SALE, SEE THE ACTUAL LISTINGS NOW!
Search for more properties in any city Right Here, Right Now!
Fast, Easy and Simple. Click Here to Search!
REAL ESTATE FOR SALE AT Low Prices, Below Market Value, Low Interest
rates.
FIND HOMES FOR SALE!. SINGLE & MULTI-FAMILY  HERE!

SEARCH FOR CONDOMINIUM, APARTMENTS
SEARCH FOR COMMERCIAL PROPERTIES RIGHT HERE!
SEARCH FOR WATERFRONT PROPERTIES

Motivated Sellers; Selling at Unbelievable Prices... LOOK FOR, FOR  SALE
PROPERTIES HERE!

Live Your Dream
Search it, Find it, Learn about it, Negotiate it, Buy it.

Obtain and retain our contact information  to further assist you.! Click
Here to contact us & get immediate help!  --- We're Licensed Realtor &
Licensed Mortgage Broker.
IF YOU NEED HELP TO SELL YOUR REAL ESTATE PROPERTY
IN SOUTH FLORIDA; PLEASE CALL Mr. ANTONY A
PROFESSIONAL REALTOR. AT: 786-709-6577 --- Fortune
International Realty
Custom Search
Custom Search