 Glossary A-B |
Glossary E-L |
| Glossary C-D |
Glossary M-Z |
mortgage
Casually, it's a home loan. Technically, it's a document that dedicates a property to a lender collateral for payment on a debt.
mortgage broker
A mortgage company that finds people who want a mortgage, and them marries them with lending institutions.
mortgage insurance (MI)
Insurance that a homeowner pays that covers the lender if the value of their collateral (your home) is adversely affected. For example, if a homeowner were to die, MI ensures that the mortgage would still be paid.
origination fee
The fee charged by a mortgage broker for generating a loan.
owner financing
Instead of a lending institution, the seller provides financing for a purchase.
planned unit development (PUD)
A development in which homes are individually owned, but there are common areas. Condominiums or town homes are a good example.
power of attorney
A legal document that authorizes someone to act in another person's behalf.
pre-approval
A certification that a borrower has submitted a loan application and some documentation that has been approved by an underwriter. A potential borrower is given preliminary approval on a loan for a certain amount of money. This is very different from pre-qualification.
prepayment
Paying above and beyond what debt payment is due, with any and all extra being applied to the principal balance. Some mortgages have penalties for prepayment.
prepayment penalty
A fee charged to a borrower who pays off a loan before it is due.
pre-qualification
This is much looser than pre-approval, usually just a loan officer's written opinion of the ability of a borrower to get a loan. While it's based on certain information provided to the loan officer, there has probably been no documentation to prove the assumptions.
prime rate
The interest rate that banks charge to loan money. This rate has some indirect effects on the rate lenders charge (mortgage rates).
principal
The amount of the original loan that remains. A payment has tow parts: principal and interest.
purchase agreement
A contract between a buyer and seller that states the conditions of a home sale.
real estate agent
A licensed professional whose job is to make real estate transactions.
Real Estate Settlement Procedures Act (RESPA)
A law that requiring lenders to notify borrowers of closing costs in advance.
RealtorŪ
A real estate agent, broker or an associate who is a member of National Association of Realtors.
recorder
The government official or office that records real estate transactions like transfer of title.
second mortgage
A mortgage that is second in line behind another loan.
secured loan
A loan backed by some property as collateral.
title
A legal document that shows ownership of a property.
title search
A search of the records on a specific property to see if there are any encumbrances, and to see that there are no questions of ownership.
transfer tax
The tax required by law when property changes hands.
Truth-in-Lending
A federal law that requires lenders to disclose in writing the terms and conditions of a mortgage.
