Mortgage and Real Estate Terms Sorted Alphabetically:
L - lender buy-down mortgage, liability insurance, LIBOR,
loan application…more
LENDER BUY-DOWN MORTGAGE - a convertible mortgage
offering a discounted interest rate at the beginning
of the loan that gradually increases to an agreed-upon
fixed-rate over the first few years of the loan. It
provides lower initial payments and a stable final
monthly rate, but the final rate may be somewhat higher
than on a standard fixed-rate mortgage.
LIABILITY INSURANCE - insurance covering the risks
related to the property, and personal liability claims
of other parties against the insured party.
LIBOR - see London Interbank Offered Rate below.
Many popular adjustable rate mortgage products such
as 5
year adjustable rate mortgages and 3/1
ARMs use this index.
LOAN APPLICATION - typically a combination of standardized
government forms and forms provided by the lender
– a 1003 form being the most common.
LOAN ORIGINATION FEE - the fee charged by a lender/loan
agent (sometimes called "points") to make
the funds available to you, an off-set of its marketing
and overhead expenses.
LOAN PROCEEDS - part of the money you borrow.
LOAN-TO-VALUE RATIO - the relationship between the
amount of the consumer’s residential real estate
mortgage loan and the appraised value of the property
expressed as a percentage. In some cases, we fund
loans at LTV's in excess of 100%. Check out our 100%
mortgage financing section for more information.
LOAN TYPES: Conforming - Conforming loans refer to
a residential real estate loan in amounts that conform
to CONSERVATIVE government lending standards as determined
by Fannie Mae & Freddie Mac (the original government
agencies, set up in the early 1940's, established
to help people finance new homes). Conforming loans
(on single family homes) range in amounts up to $417,000.
Although conforming loans are serviced by these government
agencies, the mortgage industry has adopted the term
to express loan quality standards and amounts in this
range. These generally are "quoted" as the
lowest mortgage
rates you see around (to get your attention).
Normally utilized for purchasing a home with a 5-20%
down payment, full documentation, and decent credit
is often required. The quoted low rates are wonderful
sounding "BAIT", but not everyone is "CONFORMING".
Jumbo - Jumbo loans refer to those loan amounts outside
of the "conforming" range or, above $417,001
(ask an ForTheBestRate.com Loan Advisor for state by state exceptions).
Non-Conforming - Can be an applicant with a 'conforming'
type high quality credit history, but someone looking
for a mortgage loan with more lenient standards, then
the conservative 'conforming' guidelines. Also applies
to customers with credit scores that are below the
'conforming' range. 'Non-conforming' lenders help
over 60% of all loan applicants, however the rates
will be higher.
No Documentation (No Doc) or Low Documentation Loans
- In certain situations it is either difficult or
impossible for potential borrowers to show a lender
their "taxable" income on paper. In these
instances any of the above described programs can
be used, but under circumstances called NIV or No
Income Verification. All of the other program parameters
must be met, however, in the case of income, a borrower
may only be required to show a operating license or
business license and/or limited income information.
With this type of financing, rates & fees offered
tend to be slightly higher. This type of financing
is recommended for self-employed borrowers or borrowers
who have difficulty showing their income on paper,
for one reason or another.
Cash-Out Refinances - Favorable only under low or
dropping interest rate markets. This is a substitute
for home equity (second mortgage) lending; usually
more costly as well. Occasionally, when refinancing
a first trust deed mortgage.
LONDON INTERBANK OFFERED RATE (LIBOR) - the rate
at which banks in the foreign market lend dollars
to one another. LIBOR varies by deposit maturity.
This moving standard, is a common interest rate index,
it's one of the most valid barometers of the international
cost of money. A guide used by many lender funding
sources for ARM loans.
LOSS PAYABLE CLAUSE - an insurance policy provision
for payment of a claim to someone, other than the
insured, who holds an insurable interest in the insured
property.
Mortgage Glossary - Mortgage and Real Estate Terms Sorted Alphabetically:
Mortgage
Glossary
A
- adjustable rate mortgage, adjustment interval, amortization,
annual percentage rate (APR) - more
B
- balloon mortgage, bankruptcy, basis point, beneficiary
- more
C
- caps, cash flow, cash out (second mortgage), cash
out refinance - more
D
- debt consolidation, debt service, debt reduction
plan, debt-to-income ratio - more
E
- earned and unearned income, earnest money, easement,
economic life - more
F
- Fair Credit Reporting Act, fair market value, Fannie
Mae - more
G
- good faith estimate, grace period, gradual payment
mortgage (GPM), grantee - more
H
- home equity, home improvement loan, Home Mortgage
Disclosure Act (HMDA) - more
I
- index, in file credit report, inflation, initial
interest rate, ingress and egress - more
L
- lender buy-down mortgage, liability insurance, LIBOR,
loan application - more
M
- manufactured home, market value, maximum loan amount,
mechanic's liens - more
N
- negative amortized (Neg/AM), Neg AM Loans, negative
cash flow, net worth - more
O
- obsolescence, off-site improvements, on-site improvements,
ordinary income - more
P
- par, partial payment, partnership, party wall, payment
shock - more
Q
- quality control, quit claim deed, quote - more
R
- rate shopper, real property, real estate loans,
reconciliation - more
S
- sales contract, satisfaction or mortgage, seasoned
mortgage, second mortgage - more
T
- tax lien, tenancy in common, tenant, term, title,
title insurance - more
U
- underwriting, unencumbered property, uniform commercial
code (UCC)ï -more
V
- VA (Department of Veterans Affairs) Mortgage, vacancy
rate, VA funding fee - more
