FAQs & GLOSSARY

How much of a down payment do I need?

The short answer is that you can get a conventional mortgage with as little as 3% down, an FHA loan with 3.5% down, and a VA or USDA loan with no money down at all. 

What are closing costs, and how much should I expect them to be?

The term "closing costs" refer to all of the charges you'll need to pay before your loan is completed. This can include origination fees, title insurance, prepaid escrows, and more. Closing costs can vary significantly, but generally, expect to pay around 2% to 3% of the home's price in closing costs.

What’s an APR?

• Annual Percentage Rate: The cost of your total loan credit calculated into an annual interest rate, also called APR.
• The APR includes loan points and other prepaid finance charges to reflect the true yield on the loan, which is why the APR is normally higher than a loan interest rate.
• To check that you’re getting the most competitive loan, you can compare “apples to apples,” or APR to APR, on different loan programs.

Should I "lock" my interest rate?

A rate lock means that you're guaranteed today's mortgage interest rate for some predetermined period, typically 30 to 60 days. If interest rates have been trending upward, it's generally a good idea to lock in your rate. 

Should I get a 15-year or 30-year term loan?

This depends on how much you want to stretch your budget. If you can afford the higher monthly payments, a 15-year mortgage usually comes with a better interest rate than a 30-year version. Not only will you pay off the house quicker, but you can save a tremendous amount of interest.

What documentation should I gather?

Your lender may ask for many different items, but in general, be prepared to show all of the following:

• Income verification (Last two years' tax returns, W-2s, 1099s, and your last few pay stubs)
• Drivers' license and Social Security card (or alternative ID)
• Bank statements
• Proof of funds to close (and an explanation of where they came from, if it's not obvious)
• If some or all of your down payment is coming from a gift, you will need  gift letter from the source of the funds that confirm they are gift, not a loan.

How can I find out how much home I qualify for?

• You can use our calculators or work with a loan officer and find out approximately how much you can borrow before you start shopping for a house.
• Once you have that number, you can provide more information and allow your loan officer to run your credit report to verify your assets and income.
• Your loan officer can also help you obtain a complete written credit approval, subject to an appraisal, before you make an offer on a house.

Is there anything I shouldn’t do before I get prequalified?

• Don’t start shopping for a new home until you’ve been prequalified.
• Don’t pack or ship any important documents, such as tax returns, bank statements, pay stubs, and W-2s.

What is a pre-qualification?

A pre-qualification is a basic review of your finances to determine if you would qualify for a mortgage. In general, a pre-qualification is based on unverified information you provide and does not include a credit check or any documentation, and is therefore not a firm guarantee of a loan.

What is a pre-approval?

Unlike a pre-qualification, a pre-approval can be a highly useful tool in the homebuying process. It's essentially the same thing as applying for a mortgage, just without a specific home attached to it. As part of a pre-approval, a lender will check your credit, verify your income and employment, and commit to lending a certain amount of money. A pre-approval can show sellers that you're serious about buying a home, and that you're likely to be able to follow through on a bid, and close on their property.

 

How will a past bankruptcy or foreclosure affect my ability to obtain a new mortgage?

If you've had a bankruptcy or foreclosure in the past, it may affect your ability to get a new mortgage. Unless the bankruptcy or foreclosure was caused by situations beyond your control, we will generally require that two to four years have passed since the bankruptcy or foreclosure. It is also important that you've re-established an acceptable credit history with new loans or credit cards.   Having good credit helps to get a more competitive mortgage interest rate, but perfect credit isn’t required.If you have a low credit score or have filed bankruptcy in the past, you can work toward improving your credit.

What are discount points, and should I pay them?

Discount points are money that you pay up front on your mortgage in exchange for a lower interest rate. One "point" is equal to 1% of the loan amount, so on a $200,000 mortgage, one discount point would be $2,000. Discount points are tax-deductible, and mathematically, if the interest savings over the life of the loan is greater than the points paid, it can be worth it. 

What are income and debt ratios?

• Income ratio: Your total monthly housing expense divided by your pre-tax monthly income.
• Debt ratio: Your total monthly housing expense plus any recurring debts, i.e., car payments, monthly minimum credit card payments, and other loan payments, divided by your monthly income.

What is mortgage insurance?

• This insurance helps protect the lender if a borrower forecloses on their property.
• Borrowers pay for the mortgage insurance, allowing lenders to grant loans they might not have otherwise.
• Mortgage insurance may be required on some loans when a down payment is less than 20 percent.

What are mortgage points?

• Also called discount points, mortgage points work as a one-time fee you can opt to pay if you’d like to get a lower interest rate.
• One mortgage point equals one percent of your total loan amount and may drop your interest rate one-eighth to one-quarter percent lower.

Why does it take so long to close a mortgage?

Mortgages tend to take at least 30 days to originate, and many first-timers don't expect this much of a waiting period. The short answer is that a lot of things need to happen between you submitting your mortgage application and you taking ownership of your home.

 

 

How are interest rates determined?

Interest rates fluctuate based on a variety of factors, including inflation, the pace of economic growth, and Federal Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate of inflation will almost always lead to low interest rates, while concerns about rising inflation normally cause interest rates to increase. Our nation's central bank, the Federal Reserve, implements policies designed to keep inflation and interest rates relatively low and stable.

What is an adjustable rate mortgage?

An adjustable rate mortgage, or an "ARM" as they are commonly called, is a loan type that offers a lower initial interest rate than most fixed rate loans. The trade off is that the interest rate can change periodically, usually in relation to an index, and the monthly payment will go up or down accordingly.
Against the advantage of the lower payment at the beginning of the loan, you should weigh the risk that an increase in interest rates would lead to higher monthly payments in the future. It's a trade-off. You get a lower rate with an ARM in exchange for assuming more risk.
For many people in a variety of situations, an ARM is the right mortgage choice, particularly if your income is likely to increase in the future or if you only plan on being in the home for three to five years.
Here's some detailed information explaining how ARM's work.

Index

Our ARM interest rate changes are tied to changes in an index rate. Using an index to determine future rate adjustments provides you with assurance that rate adjustments will be based on actual market conditions at the time of the adjustment. The current value of most indices is published weekly in the Wall Street Journal. If the index rate moves up so does your mortgage interest rate, and you will probably have to make a higher monthly payment. On the other hand, if the index rate goes down your monthly payment may decrease.

Margin

To determine the interest rate on an ARM, we'll add a pre-disclosed amount to the index called the "margin." If you're still shopping, comparing one lender's margin to another's can be more important than comparing the initial interest rate, since it will be used to calculate the interest rate you will pay in the future.

Interest-Rate Caps

An interest-rate cap places a limit on the amount your interest rate can increase or decrease. There are two types of caps:
1. Periodic or adjustment caps, which limit the interest rate increase or decrease from one adjustment period to the next.

2. Overall or lifetime caps, which limit the interest rate increase over the life of the loan.
As you can imagine, interest rate caps are very important since no one knows what can happen in the future. 

Negative Amortization

"Negative Amortization" occurs when your monthly payment changes to an amount less than the amount required to pay interest due. If a loan has negative amortization, you might end up owing more than you originally borrowed. None of the ARMs we offer allow for negative amortization.

Prepayment Penalties

Some lenders may require you to pay special fees or penalties if you pay off the ARM early. We never charge a penalty for prepayment.

Contact a Loan Officer

Selecting a mortgage may be the most important financial decision you will make and you are entitled to all the information you need to make the right decision. Don't hesitate to contact a Loan Officer if you have questions about the features of our adjustable rate mortgages.

 

Is comparing APRs the best way to decide which lender has the lowest rates and fees?

The Federal Truth in Lending law requires that all financial institutions disclose the APR when they advertise a rate. The APR is designed to present the actual cost of obtaining financing, by requiring that some, but not all, closing fees are included in the APR calculation. These fees in addition to the interest rate determine the estimated cost of financing over the full term of the loan. Since most people do not keep the mortgage for the entire loan term, it may be misleading to spread the effect of some of these up front costs over the entire loan term.

Also, unfortunately, the APR doesn't include all the closing fees and lenders are allowed to interpret which fees they include. Fees for things like appraisals, title work, and document preparation are not included even though you'll probably have to pay them.

For adjustable rate mortgages, the APR can be even more confusing. Since no one knows exactly what market conditions will be in the future, assumptions must be made regarding future rate adjustments.

You can use the APR as a guideline to shop for loans but you should not depend solely on the APR in choosing the loan program that's best for you. Look at total fees, possible rate adjustments in the future if you're comparing adjustable rate mortgages, and consider the length of time that you plan on having the mortgage.

Don't forget that the APR is an effective interest rate--not the actual interest rate. Your monthly payments will be based on the actual interest rate, the amount you borrow, and the term of your loan.

 

How do I know if it's best to lock in my interest rate or to let it float?

Mortgage interest rate movements are as hard to predict as the stock market and no one can really know for certain whether they'll go up or down.

If you have a hunch that rates are on an upward trend then you'll want to consider locking the rate as soon as you are able. Before you decide to lock, make sure that your loan can close within the lock-in period. It won't do any good to lock your rate if you can't close during the rate lock period. If you're purchasing a home, review your contract for the estimated closing date to help you choose the right rate lock period. If you are refinancing, in most cases, your loan could close within 30 days. However, if you have any secondary financing on the home that won't be paid off, allow some extra time since we'll need to contact that lender to get their permission.

If you think rates might drop while your loan is being processed, take a risk and let your rate "float" instead of locking. After you apply, you can lock in by contacting your Loan Officer by telephone.

 

How much money will I save by choosing a 15-year loan rather than a 30-year loan?

A 15-year fixed rate mortgage gives you the ability to own your home free and clear in 15 years. And, while the monthly payments are somewhat higher than a 30-year loan, the interest rate on the 15-year mortgage is usually a little lower, and more important - you'll pay less than half the total interest cost of the traditional 30-year mortgage.

However, if you can't afford the higher monthly payment of a 15-year mortgage don't feel alone. Many borrowers find the higher payment out of reach and choose a 30-year mortgage. It still makes sense to use a 30-year mortgage for most people.

 

Who Should Consider a 15-Year Mortgage?

The 15-year fixed rate mortgage is most popular among younger homebuyers with sufficient income to meet the higher monthly payments to pay off the house before their children start college. They own more of their home faster with this kind of mortgage, and can then begin to consider the cost of higher education for their children without having a mortgage payment to make as well. Other homebuyers, who are more established in their careers, have higher incomes and whose desire is to own their homes before they retire, may also prefer this mortgage.

Advantages and Disadvantages of a 15-Year Mortgage

The 15-year fixed rate mortgage offers two big advantages for most borrowers:

The possible disadvantages associated with a 15-year fixed rate mortgage are:

Compare Them Yourself  -  Use the calculator at the top of the page to help decide which loan term is best for you.

You own your home in half the time it would take with a traditional 30-year mortgage.

You save more than half the amount of interest of a 30-year mortgage. Lenders usually offer this mortgage at a slightly lower interest rate than with 30-year loans - typically up to .5% lower. It is this lower interest rate added to the shorter loan life that creates real savings for 15-year fixed rate borrowers.

The monthly payments for this type of loan are roughly 10 percent to 15 percent higher per month than the payment for a 30-year.

Because you'll pay less total interest on the 15-year fixed rate mortgage, you won't have the maximum mortgage interest tax deduction possible.

Are there any prepayment penalties charged for these loan programs?

None of the loan programs we offer have penalties for prepayment. You can pay off your mortgage any time with no additional charges.

 

What can you expect when you apply for a home equity loan?

First, you'll complete our online application.

The application will ask you questions about the home and your finances and takes less than 20 minutes to complete.

Your Loan Officer is a mortgage expert and will provide help and guidance along the way.

We'll send you an application package and prepare you loan for closing.

The application package will contain papers for you to sign and a list of items we'll need to verify the information you provided about your finances during the online application.

We'll order the appraisal from a licensed appraiser who is familiar with home values in your area. Depending on your finances and the loan amount requested, different types of appraisals are used. Sometimes they can do their evaluation from the street and won't have to make an appointment with you to view the inside of your home.

Title insurance will be necessary and we will use the title work to confirm legal status of your property and to prepare the closing documents.

We'll contact you to coordinate your closing date.

After we receive the application package back from you and the appraisal and title work, we'll contact you to schedule your loan closing.

That's all there is to it! You're on your way to the most convenient home loan ever!

 

Tell me more about closing fees and how they are determined.

A home loan often involves many fees, such as the appraisal fee, title charges, closing fees, and state or local taxes. These fees vary from state to state and also from lender to lender. Any lender or broker should be able to give you an estimate of their fees, but it is more difficult to tell which lenders have done their homework and are providing a complete and accurate estimate. We take quotes very seriously. We've completed the research necessary to make sure that our fee quotes are accurate to the city level - and that is no easy task!
To assist you in evaluating our fees, we've grouped them as follows:
Third Party Fees

Fees that we consider third party fees include the appraisal fee, the credit report fee, the settlement or closing fee, the survey fee, tax service fees, title insurance fees, flood certification fees, and courier/mailing fees.
Third party fees are fees that we'll collect and pass on to the person who actually performed the service. For example, an appraiser is paid the appraisal fee, a credit bureau is paid the credit report fee, and a title company or an attorney is paid the title insurance fees.
Typically, you'll see some minor variances in third party fees from lender to lender since a lender may have negotiated a special charge from a provider they use often or chooses a provider that offers nationwide coverage at a flat rate. You may also see that some lenders absorb minor third party fees such as the flood certification fee, the tax service fee, or courier/mailing fees.
Taxes and other unavoidables

Fees that we consider to be taxes and other unavoidables include: State/Local Taxes and recording fees. These fees will most likely have to be paid regardless of the lender you choose. If some lenders don't quote you fees that include taxes and other unavoidable fees, don't assume that you won't have to pay it. It probably means that the lender who doesn't tell you about the fee hasn't done the research necessary to provide accurate closing costs.
Lender Fees

Fees such as points, document preparation fees, and loan processing fees are retained by the lender and are used to provide you with the lowest rates possible.
This is the category of fees that you should compare very closely from lender to lender before making a decision.
Required Advances

You may be asked to prepay some items at closing that will actually be due in the future. These fees are sometimes referred to as prepaid items.
One of the more common required advances is called "per diem interest" or "interest due at closing." All of our mortgages have payment due dates of the 1st of the month. If your loan is closed on any day other than the first of the month, you'll pay interest, from the date of closing through the end of the month, at closing. For example, if the loan is closed on June 15, we'll collect interest from June 15 through June 30 at closing. This also means that you won't make your first mortgage payment until August 1. This type of charge should not vary from lender to lender, and does not need to be considered when comparing lenders. All lenders will charge you interest beginning on the day the loan funds are disbursed. It is simply a matter of when it will be collected.
If an escrow or impound account will be established, you will make an initial deposit into the escrow account at closing so that sufficient funds are available to pay the bills when they become due.
If your loan requires mortgage insurance, up to two months of the mortgage insurance will be collected at closing. Whether or not you must purchase mortgage insurance depends on the size of the down payment you make.

 

What is title insurance and why do I need it?

If you've ever purchased a home before, you may already be familiar with the benefits and terms of title insurance. But if this is your first home loan or you are refinancing, you may be wondering why you need another insurance policy.
The answer is simple: The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and especially your mortgage lender, want to make sure the property is indeed yours: That no individual or government entity has any right, lien, claim, or encumbrance on your property.
The function of a title insurance company is to make sure your rights and interests to the property are clear, that transfer of title takes place efficiently and correctly, and that your interests as a homebuyer are fully protected.
Title insurance companies provide services to buyers, sellers, real estate developers, builders, mortgage lenders, and others who have an interest in real estate transfer. Title companies typically issue two types of title policies:

1) Owner's Policy. This policy covers you, the homebuyer.

2) Lender's Policy. This policy covers the lending institution over the life of the loan.

Both types of policies are issued at the time of closing for a one-time premium, if the loan is a purchase. If you are refinancing your home, you probably already have an owner's policy that was issued when you purchased the property, so we'll only require that a lender's policy be issued.
Before issuing a policy, the title company performs an in-depth search of the public records to determine if anyone other than you has an interest in the property. The search may be performed by title company personnel using either public records or, more likely, the information contained in the company's own title plant.
After a thorough examination of the records, any title problems are usually found and can be cleared up prior to your purchase of the property. Once a title policy is issued, if any claim covered under your policy is ever filed against your property, the title company will pay the legal fees involved in the defense of your rights. They are also responsible to cover losses arising from a valid claim. This protection remains in effect as long as you or your heirs own the property.
The fact that title companies try to eliminate risks before they develop makes title insurance significantly different from other types of insurance. Most forms of insurance assume risks by providing financial protection through a pooling of risks for losses arising from an unforeseen future event, say a fire, accident or theft. On the other hand, the purpose of title insurance is to eliminate risks and prevent losses caused by defects in title that may have happened in the past.
This risk elimination has benefits to both the homebuyer and the title company. It minimizes the chances that adverse claims might be raised, thereby reducing the number of claims that have to be defended or satisfied. This keeps costs down for the title company and the premiums low for the homebuyer.

Buying a home is a big step emotionally and financially. With title insurance you are assured that any valid claim against your property will be borne by the title company, and that the odds of a claim being filed are slim indeed.

 

What is mortgage insurance and when is it required?

First of all, let's make sure that we mean the same thing when we discuss "mortgage insurance." Mortgage insurance should not be confused with mortgage life insurance, which is designed to pay off a mortgage in the event of a borrower's death. Mortgage insurance makes it possible for you to buy a home with less than a 20% down payment by protecting the lender against the additional risk associated with low down payment lending. Low down payment mortgages are becoming more and more popular, and by purchasing mortgage insurance, lenders are comfortable with down payments as low as 3 - 5% of the home's value. It also provides you with the ability to buy a more expensive home than might be possible if a 20% down payment were required.

The mortgage insurance premium is based on loan to value ratio, type of loan, and amount of coverage required by the lender. Usually, the premium is included in your monthly payment and one to two months of the premium is collected as a required advance at closing.

It may be possible to cancel private mortgage insurance at some point, such as when your loan balance is reduced to a certain amount - below 75% to 80% of the property value. Recent Federal Legislation requires automatic termination of mortgage insurance for many borrowers when their loan balance has been amortized down to 78% of the original property value. If you have any questions about when your mortgage insurance could be cancelled, please contact your Loan Officer.

What is the maximum percentage of my home's value that I can borrow?

The maximum percentage of your home's value depends on the purpose of your loan, how you use the property, and the loan type you choose, so the best way to determine what loan amount we can offer is to complete our online application!

• Abandonment

  The voluntary surrender of property, owned or leased, without naming a successor as owner or tenant.

• Absentee Owner

  An owner who does not personally manage or reside at property owned.

• Absolute Auction

  An auction in which the subject property is sold to the highest bidder regardless of the amount of the winning bid.

• Absorption Rate

  An estimate of the expected annual sales or new occupancy of a particular type of land use.

• Abstract Exam

  A fee related to the title insurance required by the lender.  A public record search exam is done to insure that both you and the lender are aware of any liens or encumbrances that could affect the property.  For our comparison purposes, an abstract exam fee is considered to be a third party fee and may be included in the title insurance fee by some lenders.

• Acceleration Clause

  A provision in a mortgage that gives the lender the right to demand payment of the entire principal balance if a monthly payment is missed.

• Acceptance

  A party’s consent to enter into a contract and be bound by the terms of the offer.

• Accepted Contract

  A sales contract signed  by both seller and buyer that defines the terms of the sale.

• Additional Principal Payment

  A payment by a borrower of more than the scheduled principal amount due, in order to reduce the remaining balance of the loan.

• Adjustable Rate Mortgage

  An adjustable rate mortgage, commonly referred to as an ARM, is a loan type that allows the lender to adjust the interest rate during the term of the loan.  Generally, these changes are determined by a margin and an index so that the interest rate changes, up or down, are based on market conditions at the time of the change.  Most often these interest rate changes are limited by a rate change cap and a lifetime cap.  If you apply for an adjustable rate mortgage, the lender is required to provide you with an ARM Program Disclosure which spells out the terms of the loan.

• Adjusted Basis

  The original cost of a property, plus the value of any capital expenditures for improvements to the property, minus any depreciation taken.

• Adjustment Date

  The date on which the interest rate changes for an adjustable-rate mortgage (ARM).

• Adjustment Period

  The period that elapses between the adjustment dates for an adjustable rate mortgage (ARM).

• Administrative Fee

  A fee charged by a lender to cover the administrative costs of processing your loan request.  For our comparison purposes, this fee is typically a lender fee.

• Administrator

  A person appointed by a probate court to administer the estate of a person who died intestate.

• Affordability Analysis

  A detailed analysis of your ability to afford the purchase of a home. An affordability analysis takes into consideration your income, liabilities, and available funds, along with the type of mortgage you plan to use, the area where you want to purchase a home and the closing costs that you might expect to pay.

• Amenity

  A feature of real property that enhances its attractiveness and increases the occupant's or user's satisfaction although the feature is not essential to the property's use. Natural amenities include a pleasant or desirable location near water, scenic views of the surrounding area, etc. Man-made amenities include swimming pools, tennis courts, community buildings and other recreational facilities.

• Amortization

  A loan repayment plan, which enables the borrower to reduce his debt gradually through monthly payments of principal and interest.

• Amortization Schedule

  A timetable for payment of a mortgage loan. An amortization schedule shows the amount of each payment applied to interest and principals and shows the remaining balance after each payment is made.

• Amortization Term

  The amount of time required to amortize the mortgage loan. The amortization is expressed as a number of months. For example, for a 30 year fixed rate mortgage, the amortization term is 360 months.

• Amortize

  To repay a mortgage with regular payments that cover both principal and interest.

• Annual Fee

  An annual fee for a line of credit is sometimes required. If an annual fee is shown you will be billed for that amount, annually, until the loan is paid in full.

• Annual Mortgagor Statement

  A report sent to the mortgagor each year. The report shows how much was paid in taxes and interest during the year, as well as the remaining mortgage loan balance at the end of the year.

• Annual Percentage Rate (APR)

  To make it easier for consumers to compare mortgage loan interest rates, the federal government developed a standard format called an "Annual Percentage Rate" or APR to provide an effective interest rate for comparison shopping purposes.  Some of the costs that you pay at closing are factored into the APR for ease of comparison.  Your actual monthly payments are based on the periodic interest rate, not the APR.

• Annuity

  A specified income paid yearly or at other regular intervals, often on a guaranteed dollar basis.

• Application

  The process of applying for a mortgage. The term "application" generally refers to a form that is used to collect financial information from a borrower by a lender.

• Application Deposit

  Funds required by a lender in advance of processing a loan request. Generally a deposit is collected to cover the costs of an appraisal and credit report and may or may not be refundable.

• Appraisal

  An analysis performed by a qualified individual to determine the estimated value of a home.

• Appraisal Fee

  In order to verify that the value of your home supports the loan amount you request, an appraisal will be ordered by the lender. The appraisal is generally performed by a professional who is familiar with home values in the area and may or may not require an interior inspection of the home. The fee for the appraisal is commonly passed on to the borrower by the lender. For our comparison purposes, the appraisal fee is a third party fee.

• Appraised Value

  An opinion of a property’s fair market value, based on an appraiser’s knowledge, experience and analysis of the property.

• Appraiser

  A person qualified by education, training, and experience to estimate the value of real property and personal property.

• Appreciation

  An increase in the value of a property due to changes in market conditions and other causes. The opposite of depreciation.

• APR

  To make it easier for consumers to compare mortgage loan interest rates the federal government developed a standard format, called an "Annual Percentage Rate" or APR, to provide an effective interest rate for comparison shopping purposes.  Some of the costs that you pay at closing are factored into the APR for ease of comparison.  Your actual monthly payments are based on the periodic interest rate, not the APR.

• ARM

  An ARM (adjustable rate mortgage) is a loan type that allows the lender to adjust the interest rate during the term of the loan.  Generally, these changes are determined by a margin and an index so that the interest rate changes, up or down, are based on market conditions at the time of the change.  Most often these interest rate changes are limited by a rate change cap and a lifetime cap.  If you apply for an adjustable rate mortgage, the lender is required to provide you with an ARM Program Disclosure which spells out the terms of the loan.

• Assessed Value

  The valuation placed on property by a public tax assessor for purposes of taxation.

• Assessment

  The process of placing a value on property for the strict purpose of taxation. May also refer to a levy against property for a special purpose, such as a sewer assessment.

• Assessment Rolls

  The public record of taxable property.

• Assessor

  A public official who establishes the value of a property for taxation purposes.

• Asset

  Anything of monetary value that is owned by a person. Assets include real property, personal property, and enforceable claims against others (including bank accounts, stocks, mutual funds and so on).

• Assignment

  The transfer of a mortgage from one person to another.

• Assumable Mortgage

  A loan that does not have to be paid in full if the home is sold.  Instead, the new owner can take over payments on the existing loan and pay the seller the difference between the sales price and the balance on the loan.

• Assumption

  The transfer of the seller’s existing mortgage to the buyer. See assumable mortgage.

• Assumption Clause

  A provision in an assumable mortgage that allows a buyer to assume responsibility for the mortgage from the seller. The loan does not need to be paid in full by the original borrower upon sale or transfer of the property.

• Assumption Fee

  The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of an existing mortgage.

• Attorney Opinion

  Commonly referred to as a "title opinion".  This fee is related to the title insurance required by the lender.  It is a document issued by an attorney listing any liens or encumbrances that could affect the property that are a matter of public record.  For our comparison purposes, the attorney opinion fee is considered to be a third party fee and may be included in the title insurance or closing fee by some lenders.

• Attorney Witness

  Related to the settlement/closing fee.  This fee is standard in some states and is the closing attorney's fee for witnessing the signing of the closing documents.  For our comparison purposes, an attorney witness fee is considered to be a third party fee and may be included in the title insurance or closing fee by some lenders.

• Attorney-in-fact

  One who holds a power of attorney from another to execute documents on behalf of the grantor of the power.

• Backfill

  The replacement of excavated dirt into a hole, crevice or against a structure such as a foundation.

• Backup Contract

  A contract to buy property that becomes effective if a prior contract fails to be agreed upon.

• Balance Due at End of Loan Term

  Some home equity loans may have a balance due at the end of the loan term. This means that if you make the minimum monthly payment during the life of the loan the entire balance will not be paid in full. A "balloon" payment will be due at that time.

• Balance Due at End of Loan Term

  If you make the minimum monthly payment during the term of your loan and for any reason, your loan is not renewed, a balloon payment will be due.

• Balance Sheet

  A financial statement in a table form that shows assets, liabilities and net worth.

• Balloon Mortgage

  A short-term fixed-rate loan which involves smaller payments for a certain period of time and one large payment for the entire balance due at the end of the loan term.

• Balloon Payment

  The final payment that is made at the maturity date of a balloon mortgage and pays the loan in full.

• Bankrupt

  A person, company, or corporation that, through formal court proceeding, is relieved from the payment of all debt after the surrender of some or all assets to a court-appointed trustee.

• Bankruptcy

  A court proceeding in which a debtor, who owes more than his assets, can relieve the debts by transferring his assets to a trustee.

• Before Tax Income

  Income before deducting taxes.

• Beige Book

  A survey of economic conditions, conducted in the Federal Reserve’s 12 regional banks, in preparation for Federal Open Market Committee meetings. Frequency: twice per quarter. Source: Federal Reserve.

• Beneficiary

  The person designated to receive the benefits resulting from certain acts.

• Bequeath

  To transfer personal property through a will or last testament. Compare with devise.

• Betterment

  An improvement that increases property value as opposed to repairs or replacements that simply maintain value.

• Bi-weekly Payment Mortgage

  A mortgage that requires payment to reduce the debt every two weeks instead of monthly. The 26 (sometimes 27) biweekly payments are each equal to one-half of the monthly payment that would be required with a standard 30 year fixed-rate mortgage. The result is a faster loan balance reduction with substantial savings in interest.

• Bill of Sale

  A written instrument that transfers title to personal property.

• Billing Error

  Any mistake in your monthly statement as defined by the Fair Credit Billing Act.

• Binder

  An agreement between a buyer and seller to purchase real estate.  A binder, also known as an offer to purchase or a sales contract, secures the right to purchase real estate upon agreed terms for a limited period of time.  If the buyer changes his mind or is unable to purchase, the earnest money that was paid is forfeited unless the binder expressly provides that it is to be refunded.

• Binder Deposit

  A sum of cash paid to a seller by a buyer prior to the closing to show that the buyer is serious about buying the house.  The binder deposit is deducted from the purchase price at closing and is not an additional cost.  Sometimes referred to as earnest money.

• Blanket Insurance Policy

  A single policy that covers more than one piece of property (or more than one person).

• Blanket Mortgage

  A single mortgage that is secured by more than one parcel of real estate.

• Bona fide

  In good faith without fraud.

• Bond

  An interest-bearing certificate that serves as evidence of a debt with a maturity date. Typically, bonds represent obligations of a government or business corporation. A real estate bond is a written obligation, usually secured by a mortgage or deed of trust.

• Borrower Years of School

  Include the total number of years of education beginning with first grade. Include high school, college, and graduate education if applicable. For example, high school graduation typically occurs with 12 years of school. Completion of an undergraduate degree is typically 16 years. If you took longer or shorter than the "typical" timeframe, provide the actual number of years you spent in school.

• Breach of Contract

  A violation of the terms of any legal obligation or agreement.

• Bridge Loan

  Sometimes called a "swing loan", a bridge loan is generally a loan that is secured by a borrower's current residence to obtain the funds needed to purchase a new home if the current residence will not be sold prior to the purchase of a new home.

• Broker

  A state-licensed agent who, for a commission or a fee, represents property owners in real estate transactions.

• Budget

  A detailed plan of income and expenses estimated over a specified period of time. Budgets provide guidelines for managing costs and profits.

• Budget Category

  A category of income or expense data that you can use in a budget.

• Building Code

  Regulations established by local governments that control design, construction and materials used in construction. Building codes are usually based on standardized health and safety guidelines.

• Business Days

  Check with your lending institution to find out what days it considers as business days under the Truth in Lending and Electronic Fund Transfer Acts. Usually excludes weekends and holidays.

• Buy-down Account

  An account in which money is held so that it can be applied to the monthly mortgage payments, as each payment comes due, during the period that an interest rate buy-down plan is in effect.

• Buydown

  A process that allows a borrower to obtain a lower interest rate on a mortgage by paying points to a lender.  A temporary buydown will reduce the interest rate paid during the first few years of the loan.  A permanent buydown reduces the interest rate over the entire life of the loan.

• California Bungalow

  A small, one-story, compact, early-twentieth-century house.

• California Ranch

  A one-story, post-World War II style, ground-hugging house with a low, pitched roof.

• Call Option

  A provision in a home loan that gives the mortgagee the right to call the mortgage due and payable at the end of a specified time period for any reason.

• Cancellation Clause

  A contract provision that gives the right to terminate obligations upon the occurrence of specified events.

• Cap

  Refers to a provision of an adjustable rate mortgage (ARM) that limits how much the interest rate or payment can increase or decrease.

• Capital

  1) The net worth of a business defined by the amount by which its assets exceed its liabilities. 2) Money used to create income. 3) The money or other assets comprising the wealth at the disposal of a person or business enterprise. 4) The accumulated wealth of a business or individual.

• Capital Expenditures

  The cost of an improvement made to extend the useful life of a property or to add to its value.

• Capital Improvement

  Any component constructed as a permanent improvement to real property that increases its value and adds to its useful life.

• Cash Out Refinance

  A refinance loan that provides the borrower with cash that exceeds the amount required to pay off existing mortgages on the home.  This additional cash can be used by the borrower for any purpose.

• Certificate of Deposit (CD)

  An instrument, issued by a bank or other financial institution, that is evidence of a type of savings deposit. The document includes the institution’s promise to return the deposit, plus earnings at a specified interest rate within a specified period.

• Certificate of Deposit index

  A rarely used index that is used to determine interest rate changes for certain adjustable-rate mortgages (ARM) plans.

• Certificate of Eligibility

  A document issued by the federal government certifying a veteran’s eligibility for a Department of Veterans Affairs (VA) loan.

• Certificate of Reasonable Value (CRV)

  A document issued by the Department of Veterans Affairs (VA) that establishes the maximum value and loan amount for a VA loan.

• Certificate of Title

  A statement of opinion rendered by a title company or attorney, stating that a title to real property is legally held by the current owner.

• Chain of Title

  A history of all documents, including conveyances and encumbrances, that affect title to a parcel of real property, starting with the earliest existing document and ending with the most recent.

• Change Frequency

  Term sometimes used to describe the frequency of payment or interest rate changes in an adjustable-rate-mortgage (ARM).

• Chattel

  Anything tangible and owned, other than real estate. The same as personal property.

• City/County Tax Stamp

  A tax that is required in some municipalities if a property changes hands or a new mortgage is obtained.  The amount of this tax can vary with each state, city and county.  For our comparison purposes, this fee is considered a tax or other unavoidable fee.

• Civilian Employment

  Economic indicator that reports the number of new civilian jobs created and the percentage of civilians in the job market who are unemployed. One of the most anticipated and closely watched economic indicators. Frequency: monthly. Source: Labor Department.

• Clear Title

  A title that is free of clouds, liens, disputed interests or legal questions as to ownership of the property.

• Close of Escrow

  A meeting of the parties involved in a real estate transaction to finalize the process.  In the case of a purchase, the close of escrow usually involves the seller, the buyer, the real estate broker and the lender.  In the case of a refinance, the close of escrow involves the borrower and the lender.  Sometimes referred to as the settlement or closing.

• Closing

  A meeting of the parties involved in a real estate transaction to finalize the process.  In the case of a purchase, a closing usually involves the seller, the buyer, the real estate broker and the lender.  In the case of a refinance, the closing involves the borrower and the lender.  Sometimes referred to as the settlement or the close of escrow.

• Closing Cost Item

  A single fee that a home buyer must pay at closing. Closing costs are made up of individual closing cost items such as origination fees, escrow fees, underwriting fees and processing fees. Most closing cost items are included as numbered items on the HUD-1 Settlement Statement.

• Closing Costs

  The total of all the items that must be paid at closing related to your new mortgage.

• Closing Statement

  Also referred to as the HUD-1 or the settlement statement, this is the document that provides line by line detail of the financial details related to a specific real estate transaction such as the fees paid by the seller and the buyer for a purchase transaction or the fees paid by the borrower for refinances.

• Cloud on Title

  Any conditions such as encumbrances, liens or claims revealed by a title search that adversely affect the title to real estate. Clouds on a title often cannot be removed, except by a quitclaim deed release, or court action. Compare with clear title.

• Co-Borrower Years of School

  Include the total number of years of education beginning with first grade. Include high school, college, and graduate education if applicable. For example, high school graduation typically occurs with 12 years of school. Completion of an undergraduate degree is typically 16 years. If you took longer or shorter than the "typical" timeframe, provide the actual number of years you spent in school.

• Co-maker

  A person who signs a promissory note along with the primary borrower. A co-maker's signature guarantees that the loan will be repaid, because the borrower and the co-maker are equally responsible for the repayment. Sometimes called a co-signer.

• Coinsurance

  A sharing of hazard insurance risk between the insurer and the insured, or others. A coinsurance clause states to what extent a loss will be covered based on the percentage of value insured.

• Collateral

  Property pledged as security for a debt. The borrower risks losing the collateral if the debt is not repaid according to the terms of the loan contract.

• Collateral Type Definition

  Collateral is property that you own and pledge as security for a loan. If you do not make payments as agreed, the lender becomes the owner of the collateral. For unsecured (also known as personal) loans, there is no collateral pledge and the lender makes the loan decision solely based on your integrity and ability to re-pay.

• Collection

  The process of bringing a delinquent debt current and the filing of the necessary notices to proceed with repossession or foreclosure when necessary.

• Commission

  The fee charged by a broker or agent for negotiating a real estate or loan transaction. A commission is generally a small percentage of the price of the property or amount borrowed. Sometimes called points.

• Commitment Letter

  A written offer from a lender to provide financing to a borrower.  The commitment letter states the terms under which the lender agrees to provide financing to the borrower.  Also called a loan commitment.

• Common Area Assessments

  Charges against individual unit owners in a condominium complex, or planned unit development (PUD), for additional funds to repair, maintain, or improve the common areas of the project.

• Common Areas

  Those areas of a property (usually a planned unit development or condominium project) that are used by all owners or tenants. Common areas may include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings and parking areas.

• Common Law

  The body of law based on general custom in England and used to a certain extent in the United States. Common law sometimes prevails unless superseded by other law.

• Community Home Buyer’s Program

  An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible underwriting guidelines to increase a low or moderate income family’s buying power and to decrease the total amount of cash needed to purchase a home. Borrowers who participate in this model are required to attend pre-purchase home-buyer education sessions.

• Community Land Trust Mortgage Loan

  An alternative financing option that enables low to moderate income homebuyers to purchase housing that has been improved by a nonprofit Community Land Trust and to lease the land on which the property stands.

• Community Property

  In some western and southwestern states, a form of ownership under which property accumulated through joint efforts of husband and wife is presumed to be owned equally by them unless acquired as separate property of either spouse.

• Comparables

  An abbreviated form of comparable properties. Comparables are used for comparative purposes in the appraisal process and are properties that are very similar to the property being appraised. They have been sold recently and have approximately the same size, location and features. Comparables help the appraiser determine the approximate fair market value of the subject property. Often just called “comps”.

• Compound Interest

  Interest paid on the original principal balance, and on the accumulated and unpaid interest.

• Condemnation

  The taking of private property for public purpose by a government under the right of eminent domain. Also, the determination that a building is not fit for use or is dangerous and must be destroyed.

• Condominium

  A form of real estate ownership in which each owner has title to a specific unit in a project and joint ownership in the common areas of the project.

• Condominium Conversion

  Changing the ownership of an existing rental complex building to the condominium form of ownership.

• Condominium Hotel

  A condominium complex that has registration desks, short-term occupancy, room service and daily cleaning services. Such properties are often operated as commercial hotels even though the units may be individually owned.

• Conforming Loan

  A loan that does not exceed the maximum loan amount allowed for the most common mortgage investors. Loans that exceed this amount are referred to as "jumbo mortgages". The cost of obtaining a jumbo mortgage is generally higher than the cost of obtaining a conforming mortgage.

• Construction Cost

  Generally the cost of construction is determined using the construction contract that you have executed with your building professional. However sometimes that contract may not cover all the expenses of building a new home. For example, the contract may not address costs like permit fees or items that are required to improve your lot (i.e. water and sewer connection fees).

• Construction Loan

  A short term loan that is used to finance the construction of a new home.  During the term of the loan the lender makes payments to the builder as the work progresses and the borrower makes interest payments on only the funds that have been disbursed to the builder.  Typically, the construction loan is refinanced into a permanent loan after the home is completed.

• Construction Spending

  Economic indicator that measures the total amount of spending in the U.S. on all types of construction. The residential construction component is useful for predicting future national new home sales and mortgage origination volume. Frequency: monthly. Source: Commerce Department.

• Consumer Confidence

  A monthly survey of 5,000 households designed to measure Americans’ optimism about their current situation and the future. Frequency: monthly. Source: Conference Board.

• Consumer Price Index (CPI)

  Measures the change in the cost of living for most American families. Widely followed as an indicator of inflation of retail purchases. Frequency: monthly. Source: Federal Reserve.

• Consumer Reporting Agency (CRA)

  A company that prepares detailed reports used by lenders to determine a potential borrower’s creditworthiness. These agencies obtain data for these reports from a credit repository as well as from other sources. More Commonly referred to as credit bureaus.

• Consumer Sentiment

  An index designed to measure consumer optimism. Includes a preliminary report at mid-month and final report near month-end. Frequency: semimonthly. Source: University of Michigan.

• Contingency

  A condition that must be met before a contract is legally binding.  For example, a lender's commitment to provide financing to a borrower may be contingent on receipt of an acceptable appraisal.

• Contract

  An oral or written agreement to do or not to do a certain thing for consideration.

• Conventional Mortgage

  A mortgage that is not insured or guaranteed by a government agency.

• Convertibility Clause

  A provision in some adjustable-rate-mortgages (ARM’s) that allows the borrower to change the ARM to a fixed-rate-mortgage at a specified period within the term of the loan.

• Convertible ARM

  An adjustable rate mortgage (ARM) that allows a borrower to convert their mortgage to a fixed rate loan for the remainder of the loan term if certain conditions are met.

• Cooperative Project

  A residential or mixed-use building wherein a corporation holds title to the property, sells shares of stock, representing the value of a single apartment, to individuals who then receive a lease, or similar agreement, as evidence of title.

• Cooperative (Co-op)

  A type of real estate ownership in which residents of a multi-unit property own shares of the corporation that owns the property.  The ownership of these shares gives the owner the right to occupy a unit in the building.

• Cooperative Corporation

  A corporation that holds the title to a cooperative project and grants occupancy rights to shareholders through leases or similar rental agreements.

• Cosigner

  Another person who signs your loan and assumes equal responsibility for it.

• Cost of Funds Index (COFI)

  An index that may be used to determine the interest rate changes of an adjustable rate mortgage (ARM). The Cost of Funds Index, or COFI as it is commonly called, is the weighted average of interest rates that Federal Home Loan banks have paid to their customers recently. Usually, the COFI for the 11th district of Federal Home Loan Banks is used and covers banks in California, Nevada, and Arizona. The index value is announced on the last working day of the month following the month listed.

• Courier/Mailing Fee

  The fee associated with a lender sending documents to other parties involved in the loan, like an attorney or title company.  For our comparison purposes, this fee is considered a third party fee, however some lenders may choose not to pass these costs on to the borrower.

• Covenant

  A promise written into deeds, mortgages and other financial instruments that obligates or restricts the borrower. The violation of some covenants can result in foreclosure.

• Credit

  A lender may reduce the actual amount of the closing costs by a credit in order to offer more competitive fees.

• Credit Bureau

  An agency that gathers and keeps your credit record.

• Credit Grade

  A value given to an individual to reflect their current and past debt repayment patterns.  A grade of "A" is considered to be the best.

• Credit History

  A record of a person’s debt history, including all open and fully repaid obligations. A credit history helps a lender to determine whether a potential borrower has satisfactory history of repaying debts in a timely fashion.

• Credit Life Insurance

  A type of insurance, often bought by borrowers, that will pay off the debt if the borrower dies while the policy is in force.

• Credit Report

  A record of an individual's current and past debt repayment patterns.  A credit history helps a lender to determine whether a borrower has a history of repaying debts in a timely manner.  For our comparison purposes, the credit report fee is considered to be a third party fee.

• Credit Repository

  An institution that collects, maintains, stores and sells financial and publicly recorded information about the payment records of individuals applying for credit.

• Credit Scoring System

  A statistical system used to rate credit applicants according to various characteristics relevant to creditworthiness.

• Credit-Related Insurance

  Health, life or accident insurance designed to pay the outstanding balance of a debt.

• Creditor

  A person or business that is owed money.

• Customer Credit

  Economic indicator that measures the level of outstanding consumer installment debt. Can be used in conjunction with real sales to determine whether cash or credit is fueling growth. Frequency: monthly. Source: Federal Reserve.

• Damages

  The amount recoverable by a person who has been injured in any manner through the act or default of another.

• Debenture

  An unsecured bond or note.

• Debit

  In a closing statement or settlement, an item that is charged to a buyer or seller. Compare with credit.

• Debit Card (EFT)

  A plastic card which looks similar to a credit card, that consumers may use to make purchases, withdrawals, or other types of electronic fund transfers.

• Debt

  An obligation to pay another.

• Deed

  The written instrument that conveys a property from the seller to the buyer.  The deed is recorded at the local courthouse so that the transfer of ownership is part of the public record.

• Deed of Trust

  This document, referred to as a mortgage in some states, pledges a property to a lender or trustee as security for the repayment of a debt.

• Deed Stamp

  A tax that is required in some municipalities if a property changes hands.  The amount of this tax can vary with each state, city and county.  For our comparison purposes, this fee is considered a tax or other unavoidable fee.

• Deed-in-lieu

  A process that allows a borrower to transfer the ownership of a property to the lender in order to avoid loss of the property through foreclosure.

• Default

  A breech of the agreement with a lender such as the failure to make loan payments in a timely manner.

• Delinquency

  The failure to make payments on debts when they are due.

• Delivery Fee

  A fee charged generally by the title company or attorney for the delivery of documents to your lender.  For our comparison purposes, the delivery fee is considered to be a third party fee.

• Department of Veterans Affairs (VA)

  An agency of the federal government that provides services and guarantees residential mortgages made to eligible veterans of the military services

• Deposit

  Funds required by a lender in advance of the processing of a loan request.  Generally a deposit is collected to cover the costs of an appraisal and credit report and may or may not be refundable.

• Deposit Paid on Purchase

  If you have already made a deposit, include the amount here. If you are required to make a deposit and have not yet paid the deposit, do not include the deposit in this field.

• Depreciation

  A decline in the value of real or personal property. The opposite of appreciation.

• Devise

  A gift of real property by will or last testament.

• Disburse

  To pay out on the loan.

• Disclosures

  Information that must be given to consumers about their financial dealings.

• Discount Points

  Fees that are collected by the lender in exchange for a lower interest rate.  Each discount point is 1% of the loan amount.  For our comparison purposes, a discount point is considered to be a lender fee.  To determine if it is wise to pay points to obtain a lower rate, you must compare the up front cost of the points to the monthly savings that result from obtaining the lower rate.  Sometimes referred to as "points".

• Discount Rate

  The interest rate that the Federal Reserve charges member banks for loans, using government securities or eligible paper as collateral. This provides a floor on interest rates, since banks set their loan rates a notch above the discount rate.

• Document Preparation

  Lenders will prepare some of the legal documents that you will be signing at the time of closing, such as the mortgage, note, and truth-in-lending statement.  This fee covers the expenses associated with the preparation of these documents.  For our comparison purposes, the document preparation charges are considered to be a lender fee.

• Documentary Stamp

  A tax levied by some local or state governments at the time the deeds and mortgages are entered into public record.  For our comparison purposes, documentary stamps are considered to be a tax and other unavoidable fee.

• Dower

  The rights of a widow in the property of her husband upon his death.

• Down Payment

  The portion of the purchase price of a property that the borrower will be paying in cash rather than included in the mortgage amount.

• Draw Period

  Generally associated with home equity lines of credit, the draw period is the period of time that you can access funds from the line. After the draw period expires, a repayment period generally follows.

• Due-on-sale Clause

  A provision in a mortgage that allows the lender to demand repayment in full, if the borrower sells the property that serves as security for the loan.

• Durable Goods Orders

  Economic indicator that measures new orders placed with domestic manufacturers for immediate and future delivery of factory hard-goods. Monthly percent changes reflect the rate of change of such orders. Levels of, and changes in, Durable Goods Orders are widely followed as an indicator of factory sector momentum. Frequency: Monthly Source: Commerce Department.

• Earnest Money

  A sum of cash paid to a seller by a buyer prior to the closing to show that the buyer is serious about buying the house.  The earnest money is deducted from the purchase price at closing and is not an additional cost.  Sometimes referred to as a binder deposit.

• Easement

  A right of way giving persons, other than the owner, access to or over a property.

• Easement by Prescription

  The continued use of another person’s property for a special purpose that can develop into permanent use if certain conditions are met.

• Economic Base

  The industry within a certain geographic area that provides employment opportunities which are essential to support the community.

• Effective Age

  An appraiser’s opinion of the physical condition of a structure. The actual age of a building may be longer or shorter than its effective age.

• Effective Gross Income

  Normal annual income, which may include overtime and bonuses, that is regular, consistent and guaranteed. A person’s salary is usually the prime source, but other income may qualify if it is significant, documented and stable.

• Elderly Applicant

  As defined in the Equal Credit Opportunity Act, a person 62 or older.

• Electronic Fund Transfer (EFT) Systems

  A variety of systems and technologies for transferring funds electronically rather than by check.

• Eminent Domain

  The right of a government to seize private property for public use upon payment of its fair market value. Eminent domain is the legal basis for condemnation proceedings.

• Employment Report

  Includes the unemployment rate, non-farm payroll, average work week and overtime. The non-farm payroll is probably the most watched number. Increases in these numbers can be an indication of pending “wage inflation”.

• Encroachment

  A property improvement or obstruction that physically intrudes upon the property of another.

• Encumbrance

  Anything that affects the title to a property such as a mortgage, judgement, or easement.

• Endorsements

  Additions to a title insurance policy for special coverage such as surveys, environmental and state particular endorsements that are not included in the standard insurance policy.  For our comparison purposes, the fees for endorsements are considered to be a third party fee.  Some lenders may include this fee in the cost of the title insurance.

• Endorser

  A person who signs ownership interest over to another party.

• Equal Opportunity Act (ECOA)

  The federal regulations that requires lenders to make credit equally available to all without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

• Equity

  An owner's financial position in a property.  Equity is the difference between the property's value and the amount that is owed on mortgages.

• Escrow

  Funds paid by one party to another to hold until a specific date when the funds are released to a designated individual.  Generally, an escrow account refers to the funds a mortgagor pays to the lender along with their principal and interest payments for the payment of real estate taxes and hazard insurance.  This is also referred to as impounds.  The money is held by the lender to make payments when they are due. An escrow can also refer to funds that are held by a third party to ensure the completion of repairs or improvements that must be completed on the property but that cannot be done prior to closing.

• Escrow

  An account in which funds are held in by the lender for the payment of real estate taxes and/or homeowner's insurance.

• Escrow Account

  The account that funds are held in by the lender for the payment of real estate taxes and/or homeowner's insurance.  Can also refer to the account that funds are held in for the completion of repairs or improvements to a property that cannot be completed prior to closing.

• Escrow Analysis

  A periodic review of escrow accounts to determine if current monthly deposits balances will provide sufficient funds to pay property taxes, hazard insurance and other bills when they come due.

• Escrow Payment

  The portion of a borrower’s monthly mortgage payment that is held by the loan servicing company to pay for property taxes, hazard insurance, mortgage insurance and other items as they become due.

• Estate

  The nature and extent of interest that an individual has in real property (degree of ownership). Also, the combined total of all real and personal property owned by an individual at the time of their death.

• Eviction

  The legal expulsion of an occupant from real property. Usually exercised by a lessor against a lessee to recover possession of property.

• Exam Fee

  A fee associated with an inspection by a title company of public records and other documents to determine the chain of ownership of a property.  For our comparison purposes, exam fee is considered to be a third party fee.  Some lenders may include this fee in the cost of the title insurance.

• Examination of Title

  The report on the title of a property from the public records. Not as thorough as a full title search.

• Exclusive Listing

  A written contract that gives a licensed real estate agent the exclusive right to sell property for a specific time, but reserving the owner’s right to sell the property without the payment of a commission.

• Executor

  A person named in a will to administer an estate. Most Courts will appoint an administrator if no executor is named. (The feminine form is executrix)

• Existing Home Sales

  Reports the number of existing homes sold, expressed on an annual basis. Can be combined with New Home Sales to determine the total volume of home sales, a strong indicator of future national mortgage origination volume. Frequency: monthly. Source: National Association of Realtors.

• Expense Type

  Loan
  Select if you pay a fixed monthly amount with a known end date, also known as an installment loan. Examples include a car or student loan.
  
  Lease
  Select if you are leasing. Examples include a car or furniture lease.
  
  Credit Card
  Select for credit card debts that do not require the entire balance to be paid each month, also known as a revolving debt. Examples include a MasterCard or department store card.
  
  Due-in-Full Charge
  Select for charge account debts that require the entire balance to be paid-in-full each month, also known as an open 30 day charge. Examples include most due-in-full American Express charge accounts.
  
  Other
  Select for any debts that do not fall into one of the categories above. Do not include monthly payments for child support, alimony or other court ordered maintenance since these will be entered in a different section.

• Face Interest Rate

  The percentage interest rate that is shown on the actual loan note or document.

• Factory Orders

  Economic indicator that measures the total volume of orders placed with U.S. factories. Also includes inventory and order backlog components, which can offer insight into inflation and growth in the manufacturing sector. Frequency: monthly. Source: Commerce Department.

• Fair Credit Reporting Act

  A federal consumer protection regulation that controls the disclosure of credit information and establishes procedures for correcting mistakes in your credit file.

• Fair Market Rent

  The amount that a property would command if it were currently available to rent or lease.

• Fair Market Value

  The highest price that a willing, but not compelled, buyer would pay, and the lowest price that a willing, but not compelled, seller would accept.

• Fannie Mae

  FNMA (Federal National Mortgage Association) One of the congressionally chartered, publicly owned companies that is the largest source of home mortgage funds.

• Façade

  The front outside wall of a building.

• Federal Funds Rate

  Interest rate charged by banks, with excess reserves at a Federal Reserve district bank, to banks needing overnight loans to meet reserve requirements. The federal funds rate is the most sensitive indicator of the direction of interest rates, since it is set daily by the market, unlike the prime rate and the discount rate, which are periodically changed by banks and by the Federal Reserve Board, respectively.

• Federal Housing Administration (FHA)

  An area of the U.S. Department of Housing and Urban Development (HUD) that insures low downpayment mortgages granted by some lenders.  The loan must meet the established guidelines of FHA in order to qualify for the insurance.

• Federal Open Market Committee (FOMC)

  Policy committee in the Federal Reserve System that sets short-term monetary policy objectives for the Fed. The committee is made up of the seven governors of the Federal Reserve Board, plus five of the 12 presidents of the Federal Reserve Banks.

• Fee Simple

  Absolute ownership of real property; the greatest possible interest a person can have in real estate.

• Fee Simple Estate

  An unconditional, unlimited estate of inheritance that represents the greatest possible interest in land that can be enjoyed.

• FHA Co-insured Mortgage

  A mortgage for which the Federal Housing Administration (FHA) and the originating lender share the risk of loss in the event of the borrower’s default.

• FHA Mortgage

  A mortgage insured by the Federal Housing Administration (FHA). FHA loans are also known as government mortgages.

• Finance Charge

  The total dollar amount credit will cost.

• Finders Fee

  A fee paid to a mortgage broker for finding a mortgage for a potential borrower.

• Firm Commitment

  A lending institution’s agreement to give a loan to a specific borrower on a specific property.

• First Mortgage

  A mortgage that is the first loan recorded in the public record and generally the primary loan against a property.

• Fixed Installment

  The monthly payment due on a mortgage loan which includes both principal and interest.

• Fixed Rate Mortgage

  A mortgage in which the monthly principal and interest payments remain the same throughout the life of the loan.  The most common mortgage terms are 30 and 15 years.  With a 30-year fixed rate mortgage your monthly payments are lower than they would be on a 15 year fixed rate, but the 15 year loan allows you to repay your loan twice as fast and save more than half the total interest costs.

• Fixtures

  Personal property or improvements that become real property when attached to the land or building in a permanent manner.

• Float

  A term that describes the interest rate for a loan that has not yet been guaranteed by a lender.  If the lender has not yet guaranteed or locked the interest rate, it is floating and could change prior to closing.

• Flood Certification

  An inspection to determine if a property is located in an area prone to flooding also known as a flood plain. The federal government determines whether an area is in a flood plain. Lenders generally rely on the flood certification to determine if flood insurance will be required in order to obtain a mortgage. For our comparison purposes, the cost of the flood certification is considered to be a third party fee, though you may find that all lenders do not pass this fee on to the borrower.

• Flood Insurance

  Insurance that protects a homeowner from the cost of damages to a property due to flooding or high water. It is required by law that properties located in areas prone to flooding have flood insurance. The federal government determines whether an area is prone to flooding and considered to be in a flood plain.

• Foreclosure

  The legal process in which a borrower's ownership of a property is dissolved due to default.  Typically, the property is sold at a public auction and the proceeds are used to pay the loan in full.

• Forfeiture

  The loss of money, or anything else of value, due to a breach of legal obligation or contract.

• Freddie Mac

  FHLMC (Federal Home Loan Mortgage Corporation) One of the congressionally chartered, publicly owned companies that is the largest source of home mortgage funds.

• Fully Amortized ARM

  An adjustable-rate mortgage (ARM) with monthly payments that are sufficient to liquidate the remaining principal balance over the amortization term.

• Gain

  An increase in monetary or property value.

• Gap Loan

  Short-term financing, usually to cover a gap in time between a person’s purchase of a home and that person’s later receipt of funds, usually from the sale of their previous home. Sometimes called a bridge loan or swing loan.

• Garden Apartment

  An apartment housing complex where the tenants have free access to a lawn or garden area.

• Gated Community

  A private, fenced-in housing development, sometimes employing security guards.

• Government mortgage

  A mortgage that is guaranteed by the Department of Veterans Affairs (VA) or, is insured by the Federal Housing Administration (FHA). Compare with conventional mortgage.

• Government National Mortgage Association (GNMA)

  A government-owned corporation within the U.S. Department of Housing and Urban Development (HUD). Created in 1968, GNMA assumed responsibility for the special assistance loan program formerly administered by FNMA. Commonly called Ginnie Mae.

• Grant

  A technical term used in deeds of conveyance of property to indicate a transfer.

• Grantee

  The person to whom an interest in real property is conveyed.

• Grantor

  The person conveying an interest in real property.

• Gross Domestic Product (GDP)

  Measures aggregate economic activity available, encompassing every sector of the economy. Quarterly percent changes (at an annualized rate) in GDP reflect the growth rate of total economic output. GDP growth is widely followed as the primary indicator of the strength of economic activity. Frequency: quarterly. Source: Commerce Department.

• Ground Rent

  The amount of money that is paid for the use of land when title to a property is held as a lease hold estate rather than a fee simple estate.

• Group Home

  A residential building designed for unrelated, persons with special needs. These homes provide long-term shelter and support services that are residential in nature.

• Growing Equity Mortgage (GEM)

  A fixed-rate mortgage that involves scheduled payment increases over a specified period of time. The increase amount of the monthly payment is applied directly to the remaining principal balance.

• Guarantee Mortgage

  A home loan that is guaranteed by a third party.

• Habendum Clause

  The “to have and to hold” clause that defines the amount of the estate granted in the deed.

• Half Bath

  A half bathroom in a home that contains a wash sink and a toilet, but no bathtub or shower stall.

• Hangout

  The principal balance of a loan remaining when the term of the loan is beyond the term of a lease.

• Hazard Insurance

  Insurance that protects a homeowner against the cost of damages to property caused by fire, windstorms, and other common hazards.  Also referred to as homeowner's insurance.

• HOA Dues

  Payments made to an association responsible for the maintenance of the common areas in a condominium or subdivision development.

• Home Equity Conversion Mortgage (HECM)

  Home Equity Conversion Mortgage (HECM) - Also referred to as a "reverse mortgage", a Home Equity Conversion Mortgage is a special type of home loan that allows homeowners to convert the equity in their homes into cash that is paid to them in a lump sum or in a stream of payments. With this type of mortgage repayment not required until the borrower no longer uses the home as a principal residence.

• Home Equity Line of Credit (HELOC)

  A loan secured by real property, usually in a subordinate position, that allows the borrower to receive the loan proceeds in the form of multiple advances up to a limit that represents a maximum percentage of the borrower's equity in a property.

• Home Equity Loan

  A loan secured by a subordinate mortgage on one's principal residence, generally to be used for some non-housing expenditure. A traditional home equity loan provides lump-sum proceeds at the time the loan is closed.

• Home Inspection

  A complete and detailed inspection that examines and evaluates the mechanical and structural condition of a property. A complete and satisfactory home inspection is often required by the homebuyer. Compare with appraisal.

• Homeowner's Insurance

  Insurance that protects a homeowner against the cost of damages to property caused by fire, windstorms, and other common hazards. Also referred to as hazard insurance.

• Homeowners Association

  A nonprofit association that manages the common areas of a condominium project or planned unit development (PUD). In a condominium development, the association has no ownership interest in the common elements. In a PUD, it holds title to the common elements of the project.

• Homeowners Association Dues

  Payments made to an association responsible for the maintenance of the common areas in a condominium or subdivision development.

• Homeowner’s Warranty

  A type of insurance policy that covers repairs to certain parts of a home for an agreed upon period of time. It is typically provided by the contractor or seller as a condition of the sale

• Housing Ratio

  A standard calculation performed by mortgage lenders to determine if a borrower qualifies for a specific loan type and amount. It is calculated by dividing the monthly housing expense (Principal, Interest, Taxes and Insurance) by the borrower’s monthly gross income. Also referred to as a front-end ratio or a top ratio.

• Housing Starts

  Economic indicator that measures the number of residential units on which construction is begun each month. Monthly percent changes reflect the rate of change of such activity. The level of housing starts is widely followed as an indicator of residential construction activity. Frequency: monthly. Source: Commerce Department.

• HUD

  HUD, also known as the U.S. Department of Housing and Urban Development, insures home mortgage loans made by lenders meet minimum standards for such homes.

• HUD Median Income

  Median family income for a particular county or metropolitan statistical area, as estimated by the Department of Housing and Urban Development (HUD).

• HUD-1 Statement

  Also referred to as the closing statement or the settlement statement, this is the document that provides line by line detail of the financial details related to a specific real estate transaction such as the fees paid by the seller and the buyer for a purchase transaction or the fees paid by the borrower for refinances.

• Illiquidity

  Having inadequate cash to meet current obligations. Real property is considered an illiquid investment because of the time and effort required to convert it to cash.

• Implied Agency

  Form of agency that occurs when the words and actions of the parties indicate that there is an agency relationship.

• Implied Contract

  A contract created by actions, but not necessarily written or spoken.

• IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT

  To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.

• Impound Account

  A fund set aside for future needs, such as an escrow or reserve account.

• Impounds

  An impound refers to the funds a mortgagor pays to the lender along with their monthly principal and interest payments for the payment of real estates taxes and hazard insurance.  This is also referred to as an escrow account.  The money is held by the lender to make payments when they are due.

• In-file Credit Report

  A computer-generated report containing credit and legal information obtained from one of the main credit bureaus.

• Income Property

  Real estate developed and improved to produce steady income.

• Index

  A published interest rate used to establish the interest rate offered on an Adjustable Rate Mortgage (ARM).  Some of the most common indices are treasury bills, treasury securities, London Inter-Bank Offering Rates (LIBOR) and the Cost of Funds Index (COFI).

• Index of Leading Indicators

  An index of eleven indicators designed to forecast the strength of the economy six to nine months in the future. Frequency: monthly. Source: Commerce Department.

• Individual Retirement Account

  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 in other forms of investment such as stocks, bonds, or mutual funds.

• Industrial Production

  A fixed-weight measure of physical output of the nation's factories, mines and utilities. Monthly percent changes in the index reflect the rate of change in output. Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector. Frequency: monthly. Source: Federal Reserve.

• Inflation

  An increase in the amount of money or credit available relative to the amount of goods or services available. Inflation causes an increase in the general price level of goods and services. Over prolonged periods, inflation can reduce the purchasing power of a dollar, making it worth less.

• Initial Interest Rate

  The original, starting interest rate of a loan at the time of closing. This rate changes for an adjustable-rate mortgage (ARM). Sometimes called a teaser rate

• Installment

  A regularly scheduled periodic payment that a borrower agrees to make to a lender.

• Installment Loan

  Borrowed money that is repaid in equal periodic payments. Cars and furniture are often paid for with installment loans.

• Insurable Title

  A property title that a title insurance company agrees to insure against defects and claims.

• Insurance

  A form of contract that provides compensation for specific losses in exchange for a periodic payment. An individual contract is known as an insurance policy. The periodic payments are known as insurance premiums.

• Insurance Binder

  A document stating that insurance is only temporarily in effect. Because the coverage will expire by a certain date, a permanent policy must be obtained prior to the expiration date.

• Insured Mortgage

  A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (PMI). If the borrower defaults on the loan, the insurer must pay the lender the lesser of the loss incurred or the insured amount.

• Interest

  The cost of the use of money.

• Interest Accrual Rate

  The rate at which interest accrues on a mortgage. Usually, it is also the rate used to calculate the monthly payments.

• Interest Rate

  The cost of borrowing a lender's money.  Interest takes into account the risk and cost to the lender for a loan.  The interest rate on a fixed rate mortgage depends on the going market rate and how many points you pay up-front.  An adjustable rate mortgage's interest is a variable rate made up of the index and the lender's margin.

• Interest Rate Buy-down Plan

  An arrangement where the property seller, borrower or other party deposits money to an account so that it can be released each month to reduce the borrower's interest rate or monthly payments during a specified period of a loan.

• Interest Rate Ceiling

  The maximum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage loan note.

• Interest Rate Floor

  The minimum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage loan note.

• Interest Rate/APR

  The Interest Rate/APR shown can change at any time without notice. A final interest rate offer will be made after you complete our online application and the information you provided is reviewed by us. The interest rate charged will vary with the Prime Rate as quoted by the Wall Street Journal, and is subject to increase.

• Investment Property

  A property that is not occupied by the owner.

• Jeopardy

  An element of risk or danger.

• Joint Account

  A credit account held by two or more people so that all can use the account and all assume legal responsibility to repay.

• Joint and Several Liability

  A situation whereby a creditor can demand full repayment from any and all borrowers. Each borrower is liable for the full debt, not just the prorated share.

• Joint Tenancy

  A form of co-ownership that gives each tenant equal undivided interest and equal rights in the property, including the right of survivorship.

• Joint Venture

  An agreement between two or more parties who invest in a property or business.

• Judgment

  A decree made by a court of law. In judgments that require the repayment of a debt, the court may place a lien against the debtor's real property as collateral for the judgment's creditor.

• Judgment Lien

  A lien on the property of a debtor resulting from a judgment.

• Judgment Search Fee

  A fee charged by a title company to search the public record for judgements filed against a property owner or borrower that could ultimately encumber the title of the property.  For our comparison purposes, a judgement search fee is considered to be a third party fee.  Some lenders will include this fee in the title insurance cost.

• Judicial Foreclosure

  Type of foreclosure proceeding used in some mortgage states that is handled like a civil lawsuit and conducted entirely under the direction of a court.

• Jumbo Mortgage

  A loan that exceeds the maximum loan amount allowed by the most common mortgage investors. The cost of obtaining a jumbo mortgage is generally higher than the cost of obtaining a conforming mortgage. Also known as a non-conforming loan.

• Keogh Plan

  A tax-deferred pension account designated for employees of unincorporated businesses or for persons who are self-employed.

• Kicker

  A payment sometimes required by a mortgage loan in addition to normal principal and interest.

• Kiosk

  An independent stand from which merchandise is sold.

• Laches

  Undue delay or negligence in asserting one's legal rights.

• Land

  Any part of the surface of the earth.

• Land Banking

  The business of buying land that is not currently needed for use.

• Land Contract

  A property installment selling agreement whereby the purchaser may occupy and use the land, but no deed is given by the seller until a specified part of the sales price has been paid.

• Late Charge

  The penalty a borrower must pay when a payment is made after the stated due date.

• Late Payment

  A payment made later than agreed upon in a credit contract and on which additional charges may be imposed.

• Lease

  A written contract between a property owner and a tenant that expresses the conditions under which the tenant may possess the real estate for a specified period of time and rent.

• Lease-purchase Mortgage Loan

  A creative financing option that allows homebuyers to lease a home with an option to buy. Each month's rent payment consists of principal, interest, taxes and insurance, plus an extra amount that is deposited into a savings account created for a down payment.

• Leasehold Estate

  A way of holding title to a property wherein the mortgagor does not actually own the property, but instead has a long-term recorded lease on it.

• Legal Description

  A legal property description that is sufficient to locate and identify the property without verbal testimony.

• Lender

  The bank, mortgage broker, or financial institution providing the loan funds to a borrower.

• Lender Fees

  Fees that are kept by the lender to cover some of their expenses and to meet their profitability goals.  Typically fees such as origination fees, points, processing/administration fees, underwriting fees and document preparation fees are lender fees.  This is the area of fees that you should compare very closely from lender to lender before making a decision.

• Lessee

  A person or company that signs a lease to get temporary use of property.

• Lessor

  A person or company that provides temporary use of property usually in return for periodic payment.

• Liabilities

  A person's financial obligations including both long-term and short-term debt, as well as any other amounts that are owed to others.

• Liability Insurance

  An insurance policy that offers protection against claims that a property owner's negligence resulted in bodily injury or property damage to another party.

• Liability on an Account

  Legal responsibility to repay debt.

• LIBOR

  See London Inter-bank Offered Rate.

• Lien

  A loan secured by real estate. An encumbrance against a property for money due. The lien can be voluntary such as a mortgage or involuntary such as a judgement.

• Lien Certificate

  A certificate to verify there are no claims by one person on the property of another as security for money owed.

• Lifetime Interest Rate Cap

  On an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase or decrease over the term of the loan.

• Lifetime Payment Cap

  On an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase or decrease over the term of the loan.

• Line of Credit

  An agreement by a financial institution to extend credit up to a certain amount for a certain time to a specified borrower.

• Liquid Asset

  An asset that is easily converted into cash.

• Loan

  Borrowed money that is usually repaid with interest.

• Loan Commitment

  A written offer from a lender to provide financing to a borrower.  The commitment letter states the terms under which the lender agrees to provide financing to the borrower.  Also called a commitment letter.

• Loan Estimate

  A universal form, created by the Consumer Financial Protection Bureau (CFPB), that is provided to the borrower within three business days after receipt of the loan application. The form contains important details about the loan, including the estimated interest rate, monthly payment and total closing costs. It will also detail any special loan features such as increases in the interest rate, the mortgage loan balance or prepayment penalties.

• Loan Origination

  The process by which a mortgage lender creates a mortgage secured by real property.

• Loan Term

  The number of months that you will make monthly payments.  If the loan term is the same as the payment calculation term, you will pay the loan in full during the loan term and no balance will be due.  If the payment calculation term is greater than the loan term, a balance or "balloon payment" may be due at the end of the loan term.

• Loan to Value Ratio (LTV)

  A ratio used by lenders to calculate the loan amount requested as a percentage of the value of a home.  To determine the loan to value ratio, divide the loan amount by the home's value.  The LTV ratio is used to determine what loan types the borrower qualifies for as well as the cost and fees associated with obtaining the loan.

• Lock

  Written agreement in which a lender guarantees a specific interest rate if a loan closes within a set period of time. The lock-in may also specify the number of points to be paid at closing.

• Lock Period

  The number of days that the lender will guarantee the interest rate offered for a loan.  In order to hold the guaranteed interest rate for a loan, the loan closing must occur during the lock period.

• Lock-in

  Written agreement in which a lender guarantees a specific interest rate if a loan closes within a set period of time. The lock-in may also specify the number of points to be paid at closing.

• London Inter-Bank Offered Rates (LIBOR)

  An index used to establish the interest rate of some adjustable rate mortgages (ARM). LIBOR is the London Inter-Bank Offered Rates. This is the interest rate at which the highest rated banks offer to lend to one another in eurodollars. LIBOR offers various maturities, including 1-month, 3-month, 6-month and 1-year, however, the 6-month index is most common for mortgages. LIBOR is quoted daily in the Wall Street Journal's Money Rates.

• Lot Drawing

  A fee, usually associated with a survey or title policy to obtain a plat of the property to verify that there are not encroachments or easements that would affect a lender's desire to provide financing.  For our comparison purposes, the lot drawing fee is considered to be a third party fee.

• MACRS

  Modified Accelerated Cost Recovery System.

• Maintenance

  Activities required to compensate for wear and tear on a property.

• Management fee

  The fee charged for professional property management. Usually set at a fixed percentage of total rental income generated by the managed property.

• Mansion Tax

  A tax charged by some state or local governments at the time of transfer of real estate title from one owner to another particularly for high valued properties.  For our comparison purposes, this fee is considered to be a tax or other unavoidable fee.

• Margin

  The number of percentage points a lender adds to the index value to calculate the ARM interest rate at each adjustment period.

• Master Association

  A homeowners' association sometimes formed in a large condominium project or planned unit development (PUD) that is made up of representatives from associations covering specific areas within the project.

• Maturity

  The date on which the principal balance of a financial instrument becomes due and payable.

• Maximum Financing

  Usually, a loan amount that is within 5 percent of the highest loan-to-value (LTV) percentage allowed for a specific product.

• Merged Credit Report

  A credit report that contains information from at least three credit repositories. Any duplicate entries are combined to provide a concise summary of your credit.

• Military Classification

  Military Classification refers to whether the veteran served and qualifies for VA home loan benefits as Active Duty, Reserve Service or National Guard Member.

• Monetary Policy

  Actions by the Federal Reserve System to influence the cost and availability of credit, with the goals of promoting economic growth, full employment, price stability and balanced trade with other countries.

• Money Market Account

  A type of savings account that provides bank depositors with many of the advantages of a money market fund. Certain regulatory restrictions may apply to the withdrawal of funds.

• Money Market Fund

  A mutual fund that allows individuals to participate in managed investments in short-term debt securities, such as certificates of deposit and United States Treasury bills.

• Monthly Payment

  The monthly payment required to pay back your equity loan is calculated in accordance with the program you selected. In the case of the 15 year fixed rate or balloon loan, the monthly payment will not change during the term of the loan. If you choose our equity line of credit, the monthly payment is calculated based on the balance due.

• Monthly Payment

  The minimum monthly payment required during the draw period will be equal to the interest due. We will multiplying your home equity balance by the periodic interest rate and divide the results by 12 months to calculate the interest due. After the draw period ends, you must repay the outstanding balance over a 15 year period. During this repayment period your monthly payments will equal 1/180th of the principal balance that was outstanding at the end of the draw period plus finance charges that accrued on the outstanding balance during the billing cycle.

• Mortgage

  The legal document used by a borrower to pledge their property as security in order to obtain a loan.  In some areas of the country, the mortgage is called a "deed of trust".

• Mortgage Banker

  A company that originates mortgages for resale in the secondary mortgage market.

• Mortgage Insurance

  Insurance provided by a private company to protect the mortgage lender against losses that might be incurred if a loan defaults.  The borrower usually pays the cost of the insurance and is most often required if the loan amount is more than 80% of the home's value.  Sometimes referred to as private mortgage insurance.

• Mortgage Insurance Premium (MIP)

  Amount paid by a borrower for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (PMI) company

• Mortgage Life Insurance

  A type of term life insurance often bought by mortgagors. In the event that the borrower dies while the policy is in force, the debt is automatically repaid by insurance proceeds. Not to be confused with mortgage insurance.

• Mortgage Registration Fee

  A fee or tax charged by some state and local governments when a mortgage is obtained.  For our comparison purposes, the mortgage registration fee is considered to be a tax and other unavoidable fee.

• Mortgage Tax

  A tax charged by some state or local governments that is paid to the state when a mortgage is obtained.  For our comparison purposes, the mortgage tax is considered to be a tax and other unavoidable fee.

• Mortgagee

  The person or company who provides the loan funds to the borrower.

• Mortgagor

  The person who receives funds from a lender in exchange for a security interest in the property.  Commonly known as the borrower.

• Multifamily Mortgage

  A residential mortgage on a dwelling that is designed to house more than four families, such as an apartment complex.

• Name Search

  A fee charged by title companies in some states to cover the cost of searching the public record for court orders against the current owner or proposed purchaser that could affect the title of the property.  For our comparison purposes, the name search fee is considered to be a third party fee.

• National Association of Purchasing Management (NAPM) Survey

  This prices-paid index gives insight into inflation in the manufacturing sector. A reading above 50% generally indicates that the manufacturing sector is expanding, and below 50% signifies contraction. Frequency: monthly. Source: National Association of Purchasing Management.

• National Association of Realtors®

  An organization of Realtors®, devoted to encouraging professionalism in real estate activities

• National tenant

  A lessee with a presence and established reputation in most of the United States. These tenants are typically well-known and usually have better credit than local tenants

• Negative Amortization

  A gradual increase in mortgage debt that occurs when the periodic monthly payment is not sufficient to cover the monthly principal and interest due. The amount of the deficit is added to the remaining principal balance to create negative amortization.

• Net Cash Flow

  The income that remains for an investment property after the monthly operating income is reduced by the monthly housing expense, which includes principal, interest, taxes, and insurance.

• Net Closing Costs

  For our comparison purposes, the net closing costs are the total closing costs quoted by a lender, less any credit or rebate that is offered.

• Net Worth

  The total value of all of a person's or company's assets, minus all liabilities.

• New Home Sales

  Reports the number of new single-family homes sold, expressed on an annual basis. Can be combined with Existing Home Sales to determine the total volume of home sales, a strong predictor of future national mortgage origination volume. Frequency: monthly. Source: Commerce Department.

• No Cash Out Refinance

  A refinance loan is an amount that pays off the existing mortgage balance on the property and does not provide the borrower with any cash at closing.

• Non-Conforming Loan

  A mortgage that exceeds the maximum loan amount for the most common mortgage investors. The cost of obtaining a non-conforming mortgage is generally higher than the cost of obtaining a conforming mortgage. Also known as a jumbo loan.

• Non-liquid Assets

  Any assets that cannot easily be converted into cash

• Notary Fee

  A fee for a licensed notary public to certify your signature on the loan documents.

• Note

  The written agreement signed by the borrower at closing that contains the promise to repay the loan.  The note also contains the terms of the loan, such as interest rate, payment, and term.

• Note Rate

  The interest rate stated on a mortgage note. Also called nominal rate or face interest rate

• Notice of Default

  Formal written notice to a borrower that a default on a loan has occurred and that legal action may be taken.

• Number of Application Questions

  To apply for an online mortgage, an applicant is asked to provide personal and financial data about themselves.  In order to help you compare one site to another, we have estimated the number of questions that must be answered to complete an application at each site.

• NY Tax & Title Search

  A fee charged by New York title companies or attorneys to cover the cost of searching the public record for court orders against the current owner or proposed purchaser that could affect the title of the property.  The tax records are searched as well.  For our comparison purposes, the NY Tax & Title Search fee is considered to be a third party fee.

• Obligee

  A person or company whose favor an obligation is entered into.

• Obligor

  A person or company who has engaged to perform some obligation

• Occupancy Rate

  Percentage of currently rented units in a building, neighborhood, complex, or city.

• Offer

  A buyer's expression of willingness to purchase a property at the seller's specified price.

• Offer to Purchase

  An agreement between a buyer and seller to purchase real estate. An offer to purchase, also known as a binder or a sales contract, secures the right to purchase real estate upon agreed terms for a limited period of time. If the buyer changes his mind or is unable to purchase, the earnest money that was paid is forfeited unless the binder expressly provides that it is to be refunded.

• Online Approval

  An instant approval provided by some online lenders as soon as you complete the online application.  An online approval saves you time.

• Online Rate Locks

  The ability to lock in an interest rate directly from the website of a lender.  The online rate lock capability means you don't have to make telephone contact during business hours when you are ready to lock in your interest rate.

• Online Status

  The ability to obtain status details about the progress of your mortgage request at the website of the lender.  This convenience allows you to learn about the status of your request anytime you'd like.

• Open-end Lease

  A lease which may involve a balloon payment based on the value of the property when it is returned.

• Original Principal Balance

  Total amount of principal owed on a loan before any payments are made.

• Origination Fee

  A fee charged by a lender as a way to cover processing expenses or to increase their profitability for originating a mortgage loan.  Most commonly, the origination fee is expressed as a percent of the loan amount.  For our comparison purposes, the origination fee is considered to be a lender fee.

• Other Fees

  One of our goals is to provide you with apples to apples comparison of all the fees charged by our top lenders to obtain a loan.  Fees listed as other fees cannot easily be compared to any standard fee type and should be evaluated and compared separate from the standard fees.

• Owner Financing

  A real property purchase transaction in which the seller provides the financing.

• P&I

  The monthly principal and interest payment required when repaying a mortgage in accordance with its terms.

• Package Mortgage

  A mortgage agreement in which the principal amount loaned is increased because personal property as well as real property serve as security.

• Pad Site

  A single freestanding retail site, often adjacent to a mall or larger shopping center.

• Paper

  Credit given, evidenced by a written obligation with property as collateral.

• Partial Payment

  A loan payment that is not great enough to cover the scheduled monthly payment on a mortgage.

• Paying Off?

  If you intend to pay off this expense with funds you may be receiving at this closing or with other funds you have available, please select Yes. If we know that you intend to pay off existing expenses, it can be considered as we review your loan request.

• Payment Change Date

  The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM). The payment change date usually occurs in the month immediately after the adjustment date.

• Periodic Payment Cap

  On an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase during a single adjustment period.

• Periodic Rate Cap

  On an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase during a single adjustment period.

• Personal Income

  Economic indicator that measures the total income of all Americans from all sources, and is reported both before and after taxes. Also reports personal spending and personal savings. The level of spending can be used as an indicator of consumer optimism. Frequency: monthly. Source: Commerce Department.

• Personal Property

  Any and all property that is not real property.

• PITI

  (P)rincipal, (I)nterest, (T)axes, and (I)nsurance is a reference to the total monthly payment required to repay a mortgage in accordance with its term as well as monthly escrow payments for taxes and insurance.

• Planned Unit Development (PUD)

  A housing project that includes common property that is owned and maintained by a homeowners' association for the benefit and use of the individual unit owners.

• Plat Drawing & Conservation Fee

  A fee charged by title companies in some states for obtaining a map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land, and easements.  This drawing is required to obtain title insurance.  For our comparison purposes, the plat drawing and conservation fee is considered to be a third party fee.  Some lenders may include this fee in the cost of the title insurance.

• Plat Registration

  A fee charged by title companies in some states to review the registration of a public record containing maps of land, showing the division of the land into streets, blocks, and lots and indicating the measurements of the individual parcels.  For our comparison purposes, the plat registration fee is considered to be a third party fee.  Some lenders may include this fee in the cost of the title insurance.

• Points

  Fees that are collected by the lender in exchange for a lower interest rate.  Commonly called points, each point is equal to 1% of the loan amount.  For our comparison purposes, a discount point is considered to be a lender fee.  To determine if it is wise to pay points to obtain a lower rate, you must compare the up front cost of the points to the monthly savings that result from obtaining the lower rate.

• Power of Attorney

  A written legal instrument that authorizes another person to act on one's behalf. A power of attorney can grant either complete or limited authority.

• Pre-foreclosure Sale

  A process in which the lender allows a borrower to avoid foreclosure by selling the property for less than the amount that may be owed to the lender.

• Pre-qualification

  Procedure to determine how much money a potential homebuyer will be eligible to borrow prior to actually applying for a loan.

• Prepaids

  Expenses of property ownership or expenses incurred while obtaining a mortgage that must be paid in advance.  Prepaids typically include real estate taxes and hazard insurance.

• Prepayment

  Any amount that is paid to reduce the principal balance, not interest, of a loan before the due date.

• Prepayment Penalty

  A monetary penalty charged by a lender if all or part of a loan is paid off before it is due.

• Prime Rate

  The interest rate that banks charge to their best customers for short-term loans. Changes in the prime rate can influence changes in other interest rates.

• Principal

  The actual balance, excluding interest, of a mortgage loan.  Also refers to the amount of the monthly mortgage payment that will be applied to the actual balance.

• Principal & Interest

  The payment required to repay a mortgage in accordance with its terms.  Sometimes referred to as "P&I".

• Principal Balance

  The outstanding balance of principal on a loan. Principal does not include interest or fees.

• Private Mortgage Insurance

  Insurance provided by a private company to protect the mortgage lender against losses that might be incurred if a loan defaults.  The cost of the insurance is usually paid by the borrower and is most often required if the loan amount is more than 80% of the home's value.  Sometimes referred to as mortgage insurance.

• Processing/Administration Fee

  A fee charged by a lender to cover the administrative costs of processing a loan request.  For our comparison purposes, a processing or administration fee is considered to be a lender fee.

• Producer Price Index (PPI)

  Measures the average level of prices of a fixed basket of goods received in primary markets by producers. Monthly percent changes reflect the rate of change in such prices. Changes in the PPI are widely followed as an indicator of commodity inflation. Frequency: monthly. Source: Labor Department.

• Productivity

  An economic indicator that measures the output per hour of work for non-farm business production. Can be used in conjunction with the rate of change in GAP to determine whether economic growth is likely to be inflationary. A separate component measures unit labor costs, an important indicator of future inflation. Frequency: quarterly. Source: Labor Department.

• Promissory Note

  A written promise to pay a specified sum to specified person over a specified period of time.

• Property Taxes

  Taxes based on the assessed value of the home, paid by the homeowner for community services such as schools, public works, and other costs of local government. Sometimes paid as a part of the monthly mortgage payment.

• Public Auction

  A gathering at a pre-announced public location to sell property to satisfy a mortgage that is in default.

• Public Record

  A collection of legal documents that are filed with the local government registry so that the public will know what liens, encumbrances or judgements may affect any piece of real estate.

• Purchase Agreement

  A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

• Purchasing Managers Association of Chicago (PMAC) Survey

  The PMAC Survey is a composite diffusion index of manufacturing conditions in the Chicago area. Readings above 50% indicate an expanding factory sector.

• Quadrangle

  A square-shaped land area, 24 miles on each side. Frequently used in the government rectangular survey method of land description.

• Qualified Veteran

  To officially determine if you are a qualified veteran, you or Triad Bank NA must request a Certificate of Eligibility (COE) from the VA. This certificate indicates that the VA has determined you are eligible for a VA home loan and shows the amount of available entitlement or guaranty. To obtain a certificate of eligibility, complete the “Request for a Certificate of Eligibility for VA Home Loan Benefits Form” (VA Form 26-1880) and submit it to the VA. This form, as well as additional information about VA home loan eligibility requirements, are available on the VA website (www.homeloans.va.gov).

• Qualifying Ratios

  Calculations performed by lenders to determine your ability to repay a loan.  The first qualifying ratio is calculated by dividing the monthly PITI by the gross monthly income.  The second ratio is calculated by dividing the monthly PITI and all other monthly debts by the gross monthly income.

• Qualifying Thrift Lender

  A lender who specializes in home mortgage finance under the rules established by the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).

• Quantity Survey

  A method used by appraisers to estimate how much it would cost to reproduce an improvement.

• Quitclaim Deed

  A deed that transfers, without warranty, whatever interest or rights a grantor may have at the time the transfer is made. Often used to remove a possible cloud on the title.

• Radon

  A naturally appearing radioactive gas found in some buildings, that, in sufficient concentrations, may cause health problems.

• RAM

  Reverse annuity mortgage.

• Ranch House

  Once described a low, one-story house typical of the western United States. The term is now used to describe just about any one-story home.

• Rate

  The annual rate of interest for a loan.  Also called the interest rate.

• Rate Change Cap

  The maximum amount that an interest rate can change, either at an adjustment period or over the entire life of the loan.  Commonly associated with an adjustable rate mortgage (ARM).

• Rate Improvement Mortgage

  A fixed-rate mortgage (FRM) that includes a clause allowing the borrower the option to reduce the interest rate one time (without refinancing) during the first few years of the loan term.

• Rate Lock

  An agreement by a lender to guarantee the interest rate offered for a mortgage provided that the loan closes within the specified period of time.

• Rate of Interest

  Same as interest rate.

• Real Estate Agent

  A person licensed to negotiate the purchase and sale of real estate on behalf of buyers and sellers.

• Real Estate Settlement Procedures Act (RESPA)

  A consumer protection law that requires mortgage lenders and brokers to give borrowers advance notice of closing costs in the form of a Good Faith Estimate.

• Real Property

  Land and anything permanently affixed to the land, including structures, trees, minerals, and the interest, benefits and rights thereof.

• Realtor®

  A real estate broker or associate who is an active member of a local real estate board that is affiliated with the National Association of Realtors.

• Reconveyance Fee

  This fee is charged by title companies or attorneys in some states and covers the cost of removing your current lender's lien from your property title when you refinance.  For our comparison purposes, a reconveyance fee is considered to be a third party fee and may be included in the title insurance fee by some lenders.

• Recordation Exam

  A fee charged by the title company in some states to review documents, to assure they meet the state standards prior to being recorded. For our comparison purposes, a recordation exam is considered to be a third party fee and may be included in the title insurance fee by some lenders.

• Recorder

  The public official who keeps records of transactions that affect real property in a specific geographic area (usually a county). Often known as a County Recorder or County Clerk.

• Recording

  The entering in a book of public record the details of a properly executed legal instrument that affects title to real property, thereby making it a part of the public record.

• Recording Fees

  A fee charged by the local government to record mortgage documents into the public record so that any interested party is aware that a lender has an interest in the property.  For our comparison purposes, a recording fee is considered to be a tax or other unavoidable fee.

• Refinance

  The process of paying off any existing mortgages on a home with a new mortgage loan.

• Rehabilitation Mortgage

  A loan granted to cover the costs of repairing or improving an existing property. Sometimes also used to acquire property with the intent to improve it.

• Release Fee

  The fee charged to release a lien to free real estate from a mortgage.

• Remaining Balance

  The amount of principal owed on a loan that has not yet been fully repaid.

• Remaining Term

  The number of payments left to be made on a loan before it is fully amortized (paid in full).

• Rent Loss Insurance

  An insurance policy that protects a landlord against loss of rent or value due to natural casualties that renders the premises unsuitable for use, and therefore excuses the tenant from paying rent.

• Repayment Plan

  An agreement between a lender and a borrower, made to help the borrower repay delinquent installments.

• Replacement Reserve

  An amount set aside from net operating income for replacement of short-lived common property in cooperative housing projects such as condominiums.

• Rescission

  The cancellation of a contract by the operation of a law or by mutual consent. In some circumstances, borrowers have the right to cancel a transaction within three business days after closing.

• RESPA

  See Real Estate Settlement Procedures Act.

• Retail Sales

  Measures the total receipts of retail stores. Monthly percent changes reflect the rate of changes of such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. Frequency: monthly. Source: Commerce Department.

• Retirement Plan 401(k) & 403(b)

  Employer-sponsored investment plans that allows individuals to set aside tax-deferred income for retirement or emergency purposes. 401(k) plans are provided by private corporations. 403(b) plans are provided by non-profit organizations.

• Retirement Plan 401(k) & 403(b) Loans

  Some administrators of 401(k) and 403(b) plans allow for loans against the funds you have accumulated in these plans.

• Reverse Mortgage

  See Home Equity Conversion Mortgage (HECM).

• Revolving Credit

  A credit agreement (typically a credit card) that allows a customer to borrow against a pre-approved credit line when purchasing goods and services. The borrower is only billed for the amount that is actually borrowed plus any interest due.

• RHS

  See Rural Housing Service.

• Right of First Refusal

  A contract provision that requires a property owner to give another party the first opportunity to purchase or lease the property before it is offered to others.

• Right of Ingress or Regress

  The right to enter or leave specific property or premises.

• Right of Survivorship

  In joint tenancy, the right of surviving joint tenants to acquire the interest of a deceased joint tenant.

• Rural Housing Service (RHS)

  An agency within the United States Department of Agriculture that provides financing to farmers and other qualified borrowers buying property in rural areas, who are unable to obtain loans elsewhere.

• S&L

  Savings and Loan Association.

• Safe Harbor

  A set of rules and regulations that will guarantee compliance with the law, if followed.

• Safe Rate

  An interest rate provided by low-risk investments such as high grade bonds or secured first mortgages.

• Sale-leaseback

  A technique in which a seller deeds property to a buyer, who simultaneously leases the property back to the seller.

• Sales Contract

  An agreement between a buyer and seller to purchase real estate.  A sales contract, also known as an offer to purchase or a binder, secures the right to purchase real estate upon agreed terms for a limited period of time.  If the buyer changes his mind or is unable to purchase, the earnest money that was paid is forfeited unless the binder expressly provides that it is to be refunded.

• Sales Disclosure

  A state specific form that may need to be filed, disclosing everything about the sale of the home.

• Salesperson

  A person who is licensed to make real estate transactions while under the supervision of a broker licensed by the state.

• Search and Exam Fee

  A fee charged by a title company or attorney in some states to perform a check of the title records that verifies the buyer is purchasing a house from the legal owner and there are no liens, overdue assessments, or other claims filed that would adversely affect the transfer of the title.  For our comparison purposes, a search and exam fee is considered to be a third party fee and may be included in the title insurance fee by some lenders.

• Search and Survey

  A fee charged by a title company in some states to perform a check of the public record to verify that the buyer is purchasing a home from the legal owner and there are no liens, overdue assessment, or other claims that would adversely affect the transfer of title.  In addition, a search is performed to insure that there are no issues that a survey would show that could affect the property.  For our comparison purposes, a search and survey fee is considered to be a third party fee and may be included in the title insurance fee by some lenders.

• Search Fee

  A fee charged by a title company or attorney in some states to cover the cost of searching the public record to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue assessments, or other claims filed that would adversely affect the transfer of the title.  For our comparison purposes, a search fee is considered to be a third party fee and may be included in the title insurance fee by some lenders.

• Second Mortgage

  A loan that has a lien position subordinate to the first mortgage.

• Secondary Mortgage Market

  The buying and selling of existing mortgages, primarily residential first mortgages.

• Secured Loan

  A loan that is backed by collateral.

• Security

  The collateral offered to a lender in exchange for a loan.  When a lender provides a mortgage, you provide your home as the security.  This means that if payments are in default, the lender has the right to take title to the property.

• Security Code

  The Security code for VISA, Mastercard and Discover is the 3 digit code on the back of the card. For AMEX it is the 4 digit code on the front of the card

• Security Interest

  The lender's right to take property that has been offered as security.

• Self-employment

  A borrower who owns 25% or more of a business is considered self-employed.

• Seller take-Back

  An arrangement in which the owner of a property provides financing.

• Servicer

  A company that collects principal and interest payments from borrowers and manages borrowers' escrow accounts. The servicer may or may not be the original lender.

• Settlement

  A meeting of parties involved in a real estate transaction to finalize the process. In the case of a purchase, the settlement usually involves the seller, the buyer, the real estate broker and the lender. In the case of a refinance, the settlement involves the borrower and the lender. Sometimes referred to as the closing or the close of escrow.

• Settlement or Closing Fee

  A fee charged by a title company, closing agent or attorney to act as a representative and agent for the lender to perform the closing of a real estate transaction.

• Settlement Statement

  Also referred to as the HUD-1 or the closing statement, this is the document that provides line by line detail of the financial details related to a specific real estate transaction such as the fees paid by the seller and the buyer for a purchase transaction or the fees paid by the borrower for refinances.

• Standard Payment Calculation

  The process used to determine the monthly payment required to repay the remaining principal balance of a loan in fairly equal installments, over the remaining term of the loan at the current interest rate.

• State Tax Stamps

  A tax charged by some state or local governments at the time of transfer of real estate title from one owner to another.  For our comparison purposes, these fees are considered to be a tax or other unavoidable fee.

• State/Local Tax Fees

  A tax charged by some state or local governments at the time of transfer of real estate title from one owner to another.  For our comparison purposes, these fees are considered to be a tax or other unavoidable fee.

• Step Mortgage

  A type of adjustable-rate mortgage (ARM) that allows for the interest rate to increase according to a specified schedule. At the end of the specified period, the rate and payments will remain constant for the remainder of the loan. Sometimes called a step-rate mortgage.

• Subdivision

  A housing development that is created by dividing a large parcel of land into many individual lots for sale.

• Subordinate Financing

  Any mortgage or other lien that has a lower priority than that of the first mortgage.

• Survey

  A fee associated with obtaining a precise measurement of a piece of property by a licensed surveyor.  The survey is typically a written map of the property showing locations of buildings and boundaries.  In some states a survey is required by a title company to issue a title insurance policy.  For our comparison purposes, a survey fee is considered to be a third party fee and may be included in the title insurance fee by some lenders.

• Survey Affidavit

  A fee charged by a title company to issue an insurance policy without requiring that a full survey be completed.  For our comparison purposes, a survey affidavit fee is considered to be a third party fee and may be included in the title insurance fee by some lenders.

• Sweat Equity

  Contribution to the construction of a property in the form of labor or services, instead of cash.

• Swing Loan

  Sometimes called a bridge loan, a swing loan is generally a loan that is secured by a borrower's current residence to obtain the funds needed to purchase a new home if the current residence will not be sold prior to the purchase of a new home.

• Tacking

  Adding on to a certain period of time.

• Takeout Financing

  A firm commitment to provide permanent long-term financing after a construction project is completed.

• Taking

  The acquisition of a piece of land, usually through condemnation.

• Tangible Property

  Real estate and other property of value which can be seen and touched.

• Tax Base

  The total value of property, income, or other taxable assets subject to taxation.

• Tax Certificate

  A tax charged by some state or local governments at the time of transfer of real estate title from one owner to another. For our comparison purposes, these fees are considered to be a tax or other unavoidable fee.

• Tax Service Fee

  A fee charged to a borrower by a lender so that another company will assume responsibility for verifying the amount of real estate taxes due and that taxes have been paid over the life of the loan.  For our comparison purposes, a tax service fee is considered to be a third party fee, however, some lenders may not charge for this service.

• Taxes and Other Unavoidable Fees

  Fees that we consider to be taxes and other unavoidable fees include State/Local Taxes and recording fees.  These fees will most likely have to be paid regardless of the lender you choose.  If you see a tax or recording fee in the fee comparison table that is listed by some of the sites and not others, don't assume that you won't have to pay it.  It probably means that the lender who doesn't list the fee hasn't done the research necessary to provide accurate closing cost information nationwide.  Contact one of the sites directly for more information or talk to your real estate agent or attorney for guidance.

• Tenancy by the Entirety

  Type of joint tenancy that provides the right of survivorship and is available only to a husband and wife. Compare with tenancy in common.

• Tenancy in Common

  Type of joint tenancy without the right of survivorship. Compare with tenancy by the entirety and with joint tenancy.

• Term

  The loan term is the number of months that you will make monthly payments. If the loan term is the same as the payment calculation term, you will pay the loan in full during the loan term and no balance will be due. If the payment calculation term is greater than the loan term, a balance or "balloon payment" may be due at the end of the loan term.

• Term

  The period during which you can obtain advances of credit, also known as the "draw period". Generally after the draw period ends, a repayment period begins. You cannot obtain advances during the repayment period. A monthly payment will be established for the repayment period that will allow you to pay the loan in full at the time the repayment period ends.

• Third Party Fees

  Third party fees are usually fees that the lender will collect and pass on to the person who actually performed the service.  For example, an appraiser is paid the appraisal fee, a credit bureau is paid the credit report fee and a title company or an attorney is paid the title insurance fees. Fees that we consider third party fees include the appraisal fee, the credit report fee, the settlement or closing fee, the survey fee, tax service fees, title insurance fees, flood certification fees, and courier/mailing fees. Typically, you’ll see some minor variances in third party fees from lender to lender since a lender may have negotiated a special charge from a provider they use often or chooses a provider that offers nationwide coverage at a flat rate.  You may also see that some lenders absorb minor third party fees such as the flood certification fee, the tax service fee or courier/mailing fees.

• Title

  A legal written instrument evidencing a person's lawful possession of a property.

• Title Company

  A company that specializes in examining titles to real estate and issuing title insurance.

• Title Examination

  A fee charged by a title company or attorney in some states to cover the cost of searching the public record to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue assessments, or other claims filed that would adversely affect the transfer of the title.  For our comparison purposes, a title examination fee is considered to be a third party fee and may be included in the title insurance fee by some lenders.

• Title Insurance

  An insurance policy that protects the lender (and sometimes the property owner as well) against loss due to disputes over the ownership of a property and defects in the title that were not found in the search of the public record.  For our comparison purposes, the title insurance cost is considered to be a third party fee.

• Title Opinion

  A statement issued by an attorney as to the quality of title after examining an abstract of title.  Also, referred to as an Attorney Opinion.  For our comparison purposes, a title opinion fee is considered to be a third party fee and may be included in the title insurance fee by some lenders.

• Title Search

  An examination of the public title records to determine the legal ownership of a property, and to ensure that there are no liens, encumbrances or other claims outstanding.

• Total Closing Costs

  This is the total of all the items that must be paid at closing related to your new mortgage. Since the exact charges for some of these items cannot be obtained until the time of closing, the figure may only be an estimate.

• Total Debt Ratio

  A standard calculation performed by mortgage lenders to determine if a borrower qualifies for a specific loan type.  It is calculated by dividing the monthly housing expense (Principal, Interest, Taxes and Insurance plus all other monthly debt obligation) by the borrower's monthly gross income.  Also referred to as a back end ratio or a bottom ratio.

• Trade Equity

  Equity that results from a buyer giving an existing property as trade for all, or part of, the down payment on the subject property.

• Transfer of Ownership

  Any legal method by which the ownership of property changes hands.

• Transfer Tax

  A tax charged by some state or local governments at the time of transfer of real estate title from one owner to another. For our comparison purposes, these fees are considered to be a tax or other unavoidable fee. May also be referred to as an Intangible Tax.

• Treasury Bills

  An index used to establish interest rates for adjustable rate mortgages. It is based on the interest rate paid to private investors by the US Government to obtain funding for the national debt and other expenses. Sometimes called T-bills, they are available in denominations of 3-months, 6-months and 1-year. The 3-month and 6-month Treasury bills are auctioned every Monday, and the 1-year Treasury bills are auctioned on Tuesday. The resulting figures are released to the public the next day. This index can have either a weekly or a monthly value.

• Treasury Bond

  Negotiable, long-term U.S. Government debt obligation with a maturity of ten years or longer, issued in minimum denominations of $1,000.

• Treasury Index

  An index that is used to determine interest rate changes for some adjustable-rate mortgage (ARM) programs. It is often based on the U.S. Treasury's daily yield curve.

• Treasury Note

  An intermediate U.S. Government security with a maturity of 1 to 10 years. Denominations range from $1,000 to $1 million or more. The notes are sold by cash subscription, in exchange for outstanding or maturing government issues, or at auction.

• Treasury Securities

  An index used to establish interest rates for adjustable rate mortgages. It is based on the yields of actively traded 1-year, 3-year, or 5-year Treasury Securities adjusted to constant maturities. The Treasury Security indices are calculated by the U.S. Treasury and reported by the Federal Reserve Board. These indices have either a weekly or a monthly value. The weekly indices are released on Monday afternoon for the previous week. Monthly values for these indices are generally available on the first Monday of the following month.

• Trustee

  A fiduciary who holds property in trust for another to secure performance of an obligation or act

• Two-step Mortgage

  A type of adjustable-rate mortgage (ARM) that has one interest rate for the first few years (typically 5 or 7), and a different rate for the remainder of the amortization term.

• UCC

  Uniform Commercial Code.

• Underlying Mortgage

  Generally refers to the first mortgage when there is a wraparound mortgage.

• Underwriting

  Detailed process of evaluating a borrower's loan application to determine the risk involved for the lender. Underwriting usually involves an in-depth analysis of the borrower's credit history, as well as an examination of the value and quality of the subject property.

• Underwriting Fee

  A fee charged by some lenders to cover the cost of the lender's analysis of the risk associated with a loan. For our comparison purposes, an underwriting fee is considered to be a lender fee.

• Undivided Interest

  An ownership right to use and occupy property that is shared among more than one owner. No single co-owner may have exclusive rights or possession to any part of the property.

• Uniform Commercial Code (UCC)

  Group of laws that are applicable to commercial transactions. Only a few of the laws have relevance to real estate transactions.

• Unsecured Loan

  A loan that is not backed by collateral.

• Upfront Mortgage Insurance Premium

  FHA charges the borrower an Upfront Mortgage Insurance Premium (Upfront MIP) for most transactions to financially support the FHA program. This fee is a percentage of the principal loan amount and is due at closing. The full amount can be financed as part of the loan amount or paid in cash.

• USDA Annual Fee

  The annual fee is charged over the life of the loan in lieu of traditional mortgage insurance. The fee is based on the average unpaid balance of the loan and will vary from year to year.

• USDA Guarantee Fee

  USDA charges the borrower a Guarantee Fee on all transactions to financially support the Rural Housing program. This fee is a percentage of the principal loan amount and is due at closing. The full amount can be financed as part of the loan amount or paid in cash.