|ADJUSTABLE MORTGAGE LOANS(AMLS)
|| Mortgage loans under
which the interest rate is periodically adjusted to more closely coincide with current
rates. The amounts and times of adjustment are agreed to at the inception of the loan.
Also called: Adjustable Rate Loans, Adjustable Rate Mortgages (ARMs), Flexible Rate
Loans, Variable Rate Loans.
||A schedule showing each payment
of a loan to be amortized and breaking down the payment into the amount applied to
principal and the amount applied to interest.
||An opinion of value based upon
a factual analysis. Legally, an estimation of value by two disinterested persons of
||An opinion of the value of a
property at a given time, based on facts regarding the location, improvements, etc., of
the property and surroundings.
||One who is trained and educated
in the methods of determining the value of property through analysis of various factors
which determine said value.
where attorneys examine the chain of title before title insurance is issued, the title
company will approve certain attorneys as those whose opinion it will accept for the
issuance of a title policy.
||A note calling for periodic
payments which are insufficient to fully amortize the face amount of the note prior to
maturity, so that a principal sum known as a "balloon" is due at maturity.
||One who is licensed by the
state to carry on the business of dealing in real estate. A broker may receive a
commission for his or her part in bringing together a buyer and seller, landlord and
tenant, or parties to an exchange.
||A contract setting forth the
terms under which construction is to be undertaken. Price may be set, or based on the
builders cost plus a profit
||A market condition favoring the
buyer. In real estate, when more homes are for sale than there are interested buyers.
||(1) In real estate sales, the
final procedure in which documents are executed and/or recorded, and the sale (or loan) is
completed. (2) A selling term meaning the point at which the client or customer is asked
to agree to the sale or purchase and sign the contract. (3) The final call in a metes and
bounds legal description which "closes" the boundaries of the property.
incidental to a sale of real estate, such as loan fees, title fees, appraisal fees, etc.
||An amount, usually as a
percentage paid to an agent (real estate broker) as compensation for his services. The
amount to a real estate broker is generally a percentage of the sale price or total
||A loan commitment given before
a borrower (buyer) is obtained, and subject to approval of the buyer by the lender.
||A structure of two or more
units, the interior space of which are individually owned; the balance of the property
(both land and building) is owned in common by the owners of the individual units. The
size of each unit is measured from the interior surfaces (exclusive of paint or other
finishes) of the exterior walls, floors, and ceiling. The balance of the property is
called the common area.
||Short term financing of real
estate construction . Generally followed by long term financing called a "take
out" loan, issued upon completion of improvements.
||A general term which
encompasses any method of financing property going beyond traditional real estate lending.
||(1) The financial worthiness of
a borrower. The history of whether this borrower has met financial obligations on time in
the past (2) An accounting term designating money received or receivable, as opposed to
debit which is money paid or payable.
||(1) A legal doctrine based on
fairness, rather than strict interpretation of the letter of the law. (2) The market value
of real property, less the amount of existing liens.
||A loan based upon the equity in
a property. The credit of the borrower is not a major factor.
|FARMER HOME ADMINISTRATION (FmHA)
The federal agency which
makes, participates, and insures loans for rural housing and farms.
|F.H.A. (FEDERAL HOUSING ADMINISTRATION)
A federal agency which
insures first mortgages, enabling lenders to loan a very high percentage of the sale
||Federal Home Loan Mortgage
Corporation. A federal agency purchasing first mortgages, both conventional and federally
insured, from members of the Federal Reserve System, and the Federal Home Loan Bank
||A mortgage having priority over
all other voluntary liens against certain property.
|FIXED RATE MORTGAGE
||A mortgage having a rate of
interest which remains the same for the life of the mortgage.
||A private corporation dealing
in the purchase of first mortgages, at discounts.
||The scheduled (total) income,
either actual or estimated, derived from a business or property.
|HOME OWNERS ASSOCIATION
||(1) An association of people
who own homes in a given area, formed for the purpose of improving or maintaining the
quality of the area. (2) An association formed by the builder of condominiums or planned
developments, and required by statute in some states. The builders participation as
well as the duties of the association are controlled by statute.
||Account held by a lender for
payment of taxes, insurance, or other periodic debts against real property. The mortgagor
or trustor pays a portion of, for example, the yearly taxes, with each monthly payment.
The lender pays the tax bill from the accumulated funds.
||A real estate agent obtaining a
listing (see which), as opposed to the selling agent
A one time set up fee
charged by the lender.
||The file of all items necessary
for the lender to decide to give or not give a loan. These items would include the
information on the prospective borrower (loan application, credit report, financial
statement, employment letters, etc.), and information on the property (appraisal, survey,
etc.). There may be a charge for packaging the loan.
||(1) To hypothecate as security,
real property for the payment of a debt. The borrower (mortgagor) retains possession and
use of the property. (2) The instrument by which real estate is hypothecated security for
the repayment of a loan.
||Insurance written by an
independent mortgage insurance company (referred to as an 'MIC') protecting the mortgage
lender against loss incurred by a mortgage default, thus enabling the lender to lend a
higher percentage of the sale price. The Federal Government writes this form of instance
through the FHA and the VA.
||A fee made by a lender for
making a real estate loan. Usually a percentage of the amount loaned, such as one percent.
||A maximum amount for a payment
under an Adjustable Mortgage Loan, regardless of the increase in the interest rate. If the
payment is less than the interest alone, negative amortization is created.
||A mortgage on completed
construction for a long period of time, usually over ten years.
||An authority by which one
person (principal) enables another (attorney in fact) to act for him. (1) General power -
Authorizes sale, mortgaging, etc. of all property of the principal Invalid in some
jurisdictions. (2) Special power- Specifies property, buyers, price and terms. How
specific it must be varies in each state.
|PRELIMINARY TITLE REPORT
||A report showing the condition
of title before a sale or loan transaction. After completion of the transaction, a title
insurance policy is issued.
||A penalty under a note,
mortgage, or deed of trust, imposed when the loan is paid before it is due.
||An agreement between a buyer
and seller of real property, setting forth the price and terms of the sale.
|PURCHASE MONEY MORTGAGE
||(1) A mortgage given from buyer
to seller to secure all or a portion of the purchase price. (2) Any mortgage from which
the funds are used to purchase the property.
||A designation given to a real
estate broker who is a member of a board associated with the National Association of Real
||(1) The renewing of an existing
loan with the same borrower and lender. (2) A loan on the same property by either the same
lender or borrower. (3) The selling of loans by the original lender.
||To void or cancel in such a way
as to treat the contract or other object of the recision as if it never existed.
|RESPA (REAL ESTATE
SETTLEMENT PROCEDURES ACT)
A federal statute
effective June 20, 1975, requiring disclosure of certain costs in the sale of residential
(one to four family) improved property which is to be financed by a federally insured
|SECONDARY MORTGAGE MARKET
||The buying And Selling of first
mortgages or trust deeds by banks, insurance companies, government agencies, and other
mortgagees. This enables lenders to keep an adequate supply of money for new loans. The
mortgages may be sold at full value (par) or above, but are usually sold at a discount The
secondary mortgage market should not be confused with second mortgage.
||A mortgage which ranks after a
first mortgage in priority. Properties may have two, three, or more mortgages, deeds of
trust, or land contracts, as liens at the same time. Legal priority would determine
whether they are called a first, second, third, etc. lien.
prepared by broker, escrow, or lender, giving a complete breakdown of costs involved in a
real estate sale. A separate statement is prepared for the seller and buyer.
||A general term originally used
to distinguish a house designed for use by one family from an apartment house. More
recently, used to distinguish a house with no common area from a planned development or
||To make subject or junior to.
||The evidence one has of right
to possession of land.
||A company acting as agent for a
Title Insurance Company. (See: Title Insurance Company).
||Insurance against loss
resulting from defects of title to a specifically described parcel of real property.
Defects may run to the fee (chain of title) or to encumbrances.
|TITLE INSURANCE COMPANY
||A company which issues
insurance regarding title to real property.
||An order for a search of the
title to some parcel of property, eventually leading to the issuance of a policy of title
|VARIABLE INTEREST RATE
||An interest rate which
fluctuates as the prevailing rate moves up or down. In mortgages there are usually
maximums as to the frequency and amount of fluctuation. Also called 'flexible interest
ADMINISTRATION (V.A.) LOANS
||Housing loans to veterans by
banks, savings and loans, or other lenders which are Insured by the Veterans
Administration, enabling veterans to buy a residence with little or no down payment.