Your total monthly payment

The gradual reduction of the mortgage debt through regularly scheduled payments over the term of the loan.

The measure of the cost of credit stated as a yearly rate; includes such items as the stated.

A written estimate or opinion of a property’s value prepared by a qualified appraiser.

The act of becoming responsible for the repayment of a loan not originally in your name.

A mortgage in which the borrower’s monthly payments are amortized over a longer period than the actual term of the mortgage. As a result, at the end of the loan term, the borrower must pay off the remaining balance with a single lump sum payment or refinance the loan.

When a debtor yields his or her assets to the bankruptcy court and thereby is relieved of the duty to repay unsecured debts. After claiming this provision of federal law, the debtor is discharged of existing unsecured debt; the unsecured creditors may not continue collection actions. Although they may not take additional action to collect from the debtor, those creditors holding deeds of trust or judgment liens are secured by the property. Not all debts may be discharged.

A person who coordinates funding or negotiates contracts for a client but does not loan the money him- or herself.

A situation in which the lender subsidizes the mortgage by lowering the interest rate. During the first few years, the loan payments are low, but they will increase when the funding expires.

For an Adjustable-Rate Mortgage (ARM), a limitation on the amount the interest rate or mortgage payments may increase or decrease.

The attorney’s written opinion establishing the status of title for a property as reflected on the public records. The certificate does not address issues not on record and offers no protection unless the writer of the
certificate was negligent.

Also called settlement, a meeting between the buyer, seller and lender and/or their agents during which the property and funds legally transfer.

Expenses that fall above the price of the property that are incurred by buyers and sellers in the process of transferring ownership of a property. Closing costs usually include an origination fee, discount points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. Closing costs will vary according to the area of the country; your Foundation Lenders loan originator is able to provide estimates of closing costs for you.

The closing disclosure combines and replaces the Final TIL, Itemization of Amount Financed, and HUD Settlement Statement. The closing disclosure is designed to provide disclosures that will be helpful to consumers in understanding all of the costs of the transaction.

Property assured to secure a loan.

A pledge by a lender to provide a loan on specific terms or conditions to a borrower.

A report with documentation of the borrowers credit history and current status of credit.

The relationship between a borrowers total monthly debt payments (including proposed housing expenses) and his or her gross monthly income; this calculation is used in determining the mortgage amount that a borrower qualifies for.

The written document conveying real property. The original piece of paper is not needed to convey title in the future once recorded at the county recorders office.

The failure to make a schedule payment or otherwise comply with the terms of a mortgage loan or other contract.
 

The amount of interest that is added to the principal balance of a loan when the contractual terms of that loan allow for a scheduled payment to be made that is less than the interest due.

Failure to make payments in a timely fashion. Foreclosure is a possible result.

An independent agency of the federal government that guarantees long-term, low or no-down payment mortgages to eligible veterans.

A decline in property value.

A fee paid by the borrower at closing to reduce the interest rate. A point equals 1 percent of the loan amount.

Money paid up front to make up the difference between the purchase price and the mortgage amount. Down payments usually are 5% to 20% of the sales price on conventional loans.

Money paid by a buyer to a seller to cement a transaction or ensure payment.  Normally, between 1 to 5% of the purchase price, the amount becomes a part of the down payment if the offer is accepted. The money is returned to the borrower if the offer is rejected. If the borrower cancels the transaction, the entire amount may be forfeited.

The right to use the land of another for a specific limited purpose.

The physical intrusion of a structure or improvement (such as a fence) on the land of another.

The owners interest in a property, calculated as the current fair market value of the property less the amount of existing liens.

An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the deposit by a borrower with the lender of funds to pay taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or escrow agent to be disbursed upon the closing of a sale of real estate.

Also known as Freddie Mac, the Federal Home Loan Mortgage Corporation provides a secondary market for mortgage financing by purchasing conventional loans.
 

A division of the Department of Housing and Urban Development. Its main purpose is the insuring of residential mortgage loans made by private lenders. FHA also sets standards for underwriting mortgages.

Also known as Fannie Mae, this secondary mortgage institution is the largest single holder of home mortgages in the United States. FNMA purchases VA, FHA, and conventional mortgages from primary lenders.

This statement contains the finalized information regarding the annual percentage rate, the finance charge, the amount financed, and the total payments required for the loan.

Throughout the term of the loan, this mortgage interest rate will remain the same for the original borrower loan.

A list that estimates all fees paid before closing, all closing costs, and any escrow costs the borrower will encounter when purchasing a home. This must be supplied by the lender within three days of the borrowers application so that the borrower is able to make sound decisions when shopping for a loan.

The pledge of one party to pay a debt or fulfill a responsibility contracted by another if the original party neglects to pay or perform according to terms of the contract.

When an insurance company covers the insured from loss or damage to the property resulting from issues, such as fire, windstorm and the like.

The U.S. Department of Housing and Urban Development. Established in 1965, HUD develops national policies and programs to address housing needs in the U.S. One of the main missions of HUD is to create a suitable living environment for all Americans by developing and improving the country’s communities and enforcing fair housing laws.

A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments (such as one- three-, and five-year U.S. Treasury security yields, the monthly average interest rate on loans closed by savings and loan institutions, and the monthly average costs-of-funds incurred by savings and loans), which is then used to adjust the interest rate on an adjustable mortgage up or down.

A construction loan made during the completion of a building project. After completion of the project, a permanent loan typically takes the place of this loan.

A claim against property. Property is said to be encumbered by a lien and the lien must be removed to clear title.

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

The loan estimate combines and replaces the current Good Faith Estimate (GFE) and initial Truth in Lending (TIL) disclosures. The loan estimate is designed to provide disclosures that will be helpful to consumers in understanding the key features, costs, and risks of the mortgage loan for which they are applying. It retains most of the information provided in the previous forms, however contains new additional information not previously provided such as a cash to close and a detailed escrow breakdown, among others.

This pays the administrative costs of processing the loan. Usually, it is expressed in points with one point being 1% of the mortgage amount.

The relationship between the loan amount and the value of the property (the lower of appraised value or sales price), expressed as a percentage of the property’s value. For example, a $100,000 home with an $80,000 mortgage has an LTV of 80 percent.

The lender guarantees a specified interest rate if a mortgage goes to closing within a set period of time through this written agreement. This typically specifies the number of points to be paid at closing as well.

The time period during which the borrower is guaranteed an interest rate by the lender.

For an adjustable-rate mortgage (ARM), the amount that is added to the index to determine the interest rate on each adjustment date, as stated in the note.

The lowest price a seller would accept and the highest price that a buyer would pay on a property. The price a property could be sold for at a given time could differ from the market value.