DeAnna King - Your Realtor in Johnson County - Cleburne, Burleson, Alvarado, Grandview, and Rio Vista

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1 year adjustable (ARM)	A loan with a fixed rate for the first 1 year that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 1 year, the monthly payment may also change.
10 year adjustable (ARM)	A loan with a fixed rate for the first 10 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 10 years, the monthly payment may also change.
2 year adjustable (ARM)	A loan with a fixed rate for the first 2 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 2 years, the monthly payment may also change.
3 year adjustable (ARM)	A loan with a fixed rate for the first 3 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 3 years, the monthly payment may also change.
5 year adjustable (ARM)	A loan with a fixed rate for the first 5 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 5 years, the monthly payment may also change.
7 year adjustable (ARM)	A loan with a fixed rate for the first 7 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 7 years, the monthly payment may also change.
5-Year Balloon Mortgage	The payment is calculated over a stated term and the balance must be repaid or refinanced at the end of the 5th year.
7-Year Balloon Mortgage	The payment is calculated over a stated term and the balance must be repaid or refinanced at the end of the 7th year.
10 year fixed	A loan with the same interest rate and payment over the entire 10 year life of the loan. As one of the shorter loan terms available, 10 year fixed loans offer lower lifetime interest payments than similar loans with longer terms, but you also have a higher monthly payment.
15 year fixed	You generally pay a lower interest rate with a 15 year loan. You will pay less interest and build equity quickly.
20 year fixed	The 20 year fixed loan is a good way to have fixed payments and shorten the term of your loan. You will build equity faster, pay less interest, and own your home sooner. Your monthly payments will be higher since the term is shorter.
25 year fixed	A loan with the same interest rate and payment over the entire 25 year life of the loan. As one of the longer loan terms available, 25 year fixed loans offer lower payments, but you will pay more in interest over the life of this loan than a similar loan with a shorter term.
30 year fixed	The 30 year fixed is one of the most popular loans. Many people like the fixed interest rate and lower monthly payments. But since the term of the loan is long, you will pay more interest over the life of the loan.
40 year fixed	A loan with the same interest rate and payment over the entire 40 year life of the loan. As one of the longer loan terms available, 40 year fixed loans offer lower payments, but you will pay more in interest over the life of this loan than a similar loan with a shorter term.
Abstract (of Title)	A summary of the public records relating to the title to a particular piece of land. If there are any title defects they must be cleared before a buyer can purchase clear, marketable, and insurable title.
Acceleration Clause	Allows the lender to speed up the rate at which your loan comes due or even to demand immediate payment of the entire balance of the loan should you default on you loan.
Accrued Interest	Interest that has accumulated from one payment-due date to the next. Also, the total amount of interest paid on a loan over time
Acquisition Fee	A fee charged by a dealer to begin a lease. Also known as a bank fee if the lessor is a bank, or an initiation fee. Acquisition fees start at about $300 and are seldom negotiable.
Adjustable Rate Mortgage (ARM)	A mortgage in which the interest rate is adjusted periodically based on an index. Also known as the renegotiable rate mortgage, the variable rate mortgage or the Canadian rollover mortgage.
Adjustment Interval	On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, usually one, three or five years.
Affiliate	An entity related to a Seller that is subject to common operating control and that is operated as part of the same system or enterprise. The Seller typically owns less than a majority of the voting stock or the Seller and the entity are subsidiaries of a third party.
Affordable Gold 5	Mortgage with less than or equal to 95 percent LTV, when at least 5 percent of the down payment comes from the borrower's personal cash.
Affordable Gold 97	Mortgage with greater than 95 percent loan-to-value (LTV) ratio but less than or equal to 97 percent LTV, when at least 3 percent of the down payment comes from the borrower's personal cash.
Affordable Product Type	Choice of loan determined under the Affordable Gold program. Indicates whether to submit the loan under the Affordable Gold program and, if so, which type of program.
Affordable Seconds	Subsidized secondary financing or other financial assistance provided under an established, documented secondary financing or financial assistance program that has formal procedures in place to provide applicant qualification, loan processing, and loan program administration on an ongoing basis.
Agreement of Sale	Known by various names, such as contract of purchase, purchase agreement, or sales agreement according to location or jurisdiction. A contract in which a seller agrees to sell and a buyer agrees to buy, under specific terms spelled out in writing and signed by both parties.
Amortization	The gradual reduction of a debt by periodic payments of interest and principal that are large enough to pay off a loan at maturity. The loan is repaid through regular, monthly payments of principal and interest paid for a predetermined amount of time.
Amount Financed	The part of a vehicle's cost that a lender supplies. To determine the amount financed, multiply the purchase price by the interest rate; subtract that amount from the purchase price; add state purchase tax to that remainder; then subtract the down payment. Put differently, AF = purchase price - (purchase price X interest rate) + tax - down payment.
Annual Fee	A credit card issuer may charge you a fee each year for your account.
Annual Percentage Rate (APR)	The annual cost of a loan to a borrower. Like an interest rate, the APR is expressed as a percentage of the loan amount. Unlike an interest rate, however, it includes other charges or fees to reflect the total cost of the loan. The Federal Truth in Lending Act requires that every consumer loan agreement disclose the APR in large, bold print. Since all lenders must follow the same rules to ensure the accuracy of the APR, borrowers can use the APR as a good basis for comparing the cost of loans.
Application	A written statement of personal and financial information that is required to approve a loan. Note that application fees are usually required for home loans but not for auto loans.
Appraisal	A written analysis of the estimated value of a property, as prepared by a qualified appraiser. A fee is typically charged for a real estate appraisal because a home appraisal is time-consuming. An appraisal of an auto is usually not necessary because auto dealers, sellers and buyers all have quick access to the market value of autos.
Appraisal Fee	The charge for estimating the value of property.
Appraiser Network	Group of licensed/certified individuals or entities contracted to perform property value assessments.
Assessment Fees	In condominium living, additional fees charged to unit owners to pay for any maintenance and repair that exceeds the budget of monthly condo fees. These fees are determined by the condominium association and can be levied at any time.
Assessment Report	Report that appraisers use to record property values, marketability analyses and any pertinent comments regarding the subject property. Assessment reports are classified as appraisal reports or inspection reports.
Assessment Upgrade	Approved recommendation from an appraiser that you must use a more comprehensive type of assessment. An example of an upgrade recommendation includes any adverse/atypical findings or other atypical property or neighborhood condition observed by the appraiser. You must also upgrade an assessment when its value does not support the loan transaction; the appraiser is unable to view the subject property from the public street; the assessment is "subject to" completion; or repair or property rights are leasehold.
Asset	Anything that has monetary or exchange value that is owned by an individual, business or institution. Assets include real estate property, personal property, vehicles and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on). A lender is very interested in the amount and value of any assets you may have because assets can be used as collateral against a loan. Along with other factors such a borrower's credit rating, assets are also used to help determine the amount of the loan.
Assumable Mortgage	An assumable mortgage is a mortgage that allows you to take over a mortgage on a home you are buying or allows a buyer to take over your mortgage if you are selling your house. The advantage of this is that you assume a mortgage that has a lower interest rate than current rates, and you avoid high closing costs.
Assumption	The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt.
Automated Underwriting	Automated underwriting is used to offer instant decisioning regarding your loan request. Automated underwriting is similar to instant offer service. You are usually required to provide additional information to the lender to close your loan.

Balloon (Payment) Mortgage	Usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a specific time.
Bank Draft	A payment method where your loan payment is automatically deducted from your checking or savings account, so you don't have to mail in your payment each month.
Bankruptcy	A payment method where your loan payment is automatically deducted from your checking or savings account, so you don't have to mail in your payment each month.
Beneficiary	A person, persons, or organization designated to receive the benefits from a life insurance policy, trust, estate, or pension upon the death of the insured, testator, or pensioner.
Billing Error	Any mistake in your monthly statement as defined by the Fair Credit Billing Act.
Binder or "Offer to Purchase"	A preliminary agreement, secured by the payment of earnest money, between a buyer and seller as an offer to purchase real estate. 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 is forfeited unless the binder expressly provides that it is to be refunded.
Borrower	One who receives funds in the form of a loan with the obligation of repaying the loan in full with interest
Broker	An individual in the business of assisting in arranging funding or negotiating contracts for a client but who does not loan the money himself.
Building Line or Setback	Distances from the ends and/or sides of the lot beyond which construction may not extend. The building line may be set by a filed plat of subdivision, by restrictive covenants in deeds or leases, by building codes, or by zoning ordinances.
Business Days	Always contact your institution to find out what days it counts as business days under the Truth in Lending and Electronic Fund Transfer Acts.
Buydown	When the lender and/or the home builder subsidizes the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires.

Caps (Interest)	Consumer safeguards which limit the amount the interest rate on an adjustable rate mortgage may change per year and/or the life of the loan.
Caps (Payment)	Consumer safeguards which limit the amount monthly payments on an adjustable rate mortgage may change.
Cash Flow	A measure that compares your income and your expenses. When more cash comes in than goes out, you have a positive cash flow. Negative cash flow occurs when more cash goes out than comes in. Your ability to qualify or be approved for a loan is determined in part by your cash flow situation.
Cash-out Refinance	Refinancing transaction in which the money the borrower receives from the new loan exceeds the total amount he uses to repay the existing first mortgage, closing costs, points; and satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash he can use for any purpose.
Cash Value	The accumulated savings component of a life insurance policy, which is available to the holder for a loan. The policy holder will receive payment in this amount if the policy is cancelled or lapses before the policy matures or the insured person dies. Also known as the cash surrender value.
CD indexed	These ARMs are indexed to Certificate of Deposits (CDs). Adjustments occur every six months, with a per adjustment cap of 1 percent and a lifetime cap of 6 percent.
Certificate of Title	A certificate issued by a title company or a written opinion by an attorney that the seller has good marketable and insurable title to the property which he is offering for sale. A certificate of title offers no protection against any hidden defects in the title which an examination of the records could not reveal. The issuer of a certificate of title is liable only for damages due to negligence.
Closing	The meeting between the buyer, seller and lender where the property and funds legally change hands. Also called settlement.
Closing Costs	Includes a loan origination fee, points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. The closing costs usually are about 2 percent to 6 percent of the mortgage amount.
Closing Day	The day on which the formalities of a real estate sale are finished. The certificate of title, abstract, and deed are generally prepared for the closing by an attorney and this cost charged to the buyer. The buyer signs the mortgage, and closing costs are paid. The final closing merely reiterates the original agreement reached in the agreement of sale.
Cloud (On Title)	An outstanding claim which negatively affects the marketability of title.
Collateral	Property offered to support a loan that can be seized if you default.
Collateral Insurance	Insurance which covers damage to your vehicle that results from a collision with another vehicle or object. Different than comprehensive insurance.
Commission	The fee charged by or paid to a broker, agent or auto sales rep for negotiating a real estate, car sale or loan transaction. A commission is generally a percentage of the sales price.
commitment	A report prepared by a real estate agent that determines a house's market value. The agent compares the house's attributes to similar properties in the area that have recently sold or are still on the market. The CMA is often used to establish the listing price.
Competitive Market Analysis (CMA)	An agreement, often in writing, between a lender and a borrower to loan money at a future date subject to the stated conditions.
Compounded Interest	Interest is computed on the principal balance of a mortgage plus accrued interest.
Condemnation	A determination by a governmental agency that a particular building is unsafe or unfit for use.
Condominium	Individual ownership of a unit and an individual interest in the common areas and facilities which serve the project.
Condominium Association	An association of unit owners in a condominium building. The association elects a board of directors, which handles the maintenance and repair of common areas, disputes among unit owners, and enforcement of rules and regulations, and condominium fees.
Condominium Fees	Also called maintenance fees, the monthly fees paid by all condominium owners. The condominium fees go toward the maintenance and repair of common areas in the building, as well as salaries for groundskeepers, repairmen and security guards. The condominium fees are set and managed by the condominium association, and are typically determined based on the size of your unit.
Conduit	Secondary market entity that purchases loans from originators. Conduits provide expertise to evaluate, price, purchase, and service nonconforming loans.
Conforming Loan	Any loan that meets the criteria and limits set forth by the largest buyers of loans, Fannie Mae or Freddie Mac.
Construction Loan	A short term interim loan for financing the cost of construction. The lender advances funds to the builder as the work progresses.
Consumer Reporting Agency	An organization, commonly referred to as a credit bureau, that prepares credit reports which are used by lenders to determine a potential borrower's credit history. The agency obtains data for these reports from a credit repository and from other sources.
Contractor	A person who contracts to erect buildings. There are also contractors for each phase of construction: heating, electrical, plumbing, air conditioning, road building and others.
Conventional Loan	A mortgage not insured by FHA or guarantee by the VA or Farmers Home Administration (FmHA).
Conventional Mortgage	Any mortgage which is not insured or guaranteed by a government agency such as HUD/FHA, VA, or the Farmers Home Administration.
Conversion Option	A conversion option allows you to convert an ARM to a fixed rate mortgage. You will likely pay a higher rate or more points to have this option.
Cooperative Housing	An apartment building or a group of dwellings owned by a corporation, the stockholders of which are the residents of the dwellings. It is operated for their benefit by their elected board of directors. In a cooperative, the corporation or association owns title to the real estate. A resident purchases stock in the corporation which entitles him to occupy a unit in the building or property owned by the cooperative. While the resident does not own his unit, he has an absolute right to occupy his unit for as long as he owns the stock.
Correspondent	An entity that typically sells the Mortgages it originates to other lenders. The Correspondent performs some or all of the loan processing functions such as taking the loan application, ordering credit reports, appraisals, title reports, and verifying the borrower's income and employment. The Correspondent may or may not have delegated underwriting and typically funds the loans at settlement. The Mortgage is closed in the Correspondent's name and the Correspondent may or may not service the Mortgage. The Correspondent could commission a Mortgage Broker to perform some of the processing functions.
Cosigner	Another person who signs your loan and assumes equal responsibility for it.
Cost of Funds	These ARMs are indexed to the actual costs of what banks pay to borrow money. Rates can adjust every month, six months, or every year.
Covenants, Conditions and Restrictions (CC&Rs)	A set of rules and regulations governing a condominium building. The CC&Rs can include restrictions on things such as noise levels, pet ownership and renovations. These rules are enforced by the condominium association.
Credit	The right granted by a creditor to pay in the future in order to buy or borrow in the present; also, a sum of money owed to a person or business.
Credit Bureau	An agency that keeps your credit record.
Credit History	The record of how you've borrowed and repaid debts.
Credit Ratio	The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her net income (FHA/VA loans) or gross monthly income (Conventional loans).
Credit Report	Report of an individual's credit history that a credit reporting company (CRC) or credit repository prepares that you use to determine a borrower's creditworthiness.
Credit Reporting Company	Company that collects information received from more than one credit repository, merges all the information, and reports it in one form; merged credit reports.
Credit Repository	Company that collects information on an individual's credit history and reports it in one form, the in-file credit report.
Credit Scoring System	Statistical system used to rate credit applicants according to various characteristics relevant to creditworthiness.
Credit Warranty	Guarantee or promise by the seller of the loan relating to the creditworthiness of the borrower(s). The seller warrants that the borrower has the willingness to repay and there is evidence of an acceptable credit reputation.
Creditor	A person or business from whom you borrow or to whom you owe money.
Credit-related Insurance	Health, life, or accident insurance designed to pay the outstanding balance of debt.
Creditworthiness	Past and future ability to repay debts.
Current Index Value	Your current index value is the index that is used to figure your interest adjustment on ARMs.

De Minimus Self-employed Borrower	Borrower who earns less than 5 percent of total stable monthly income from self-employed business income.
Death Benefit	The amount of money the beneficiary is paid under an insurance policy when the insured person dies, less any outstanding loans against the policy. Also called the principal sum or survivor benefit.
Debt	An amount of money owed by one person, company, organization or other entity to another.
Deductible	The amount of a claim you pay out-of-pocket before the insurance company assumes the expenses. The deductible is typically a fixed dollar amount (e.g. $250).
Deed	A formal written instrument by which title to real property is transferred from one owner to another. The deed should contain an accurate description of the property being conveyed, should be signed and witnessed according to the laws of the State where the property is located, and should be delivered to the purchaser at closing day. There are two parties to a deed: the grantor and the grantee. (See also deed of trust.
Deed of Trust	In many states, this document is used in place of a mortgage to secure the payment of a note.
Default	Failure to repay a loan or otherwise meet the terms of your credit agreement.
Deferred Interest	Occurs when your monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the unpaid balance of the loan. The danger of deferring your interest is that the buyer ends up owing more than the original amount of the loan. Also called Negative Amortization.
Delinquency	Failure to make payments on time. This can lead to foreclosure.
Department of Veterans Affairs (VA)	An independent agency of the federal government which guarantees long-term, low- or no-down payment mortgages to eligible veterans.
Depreciation (VA)	Decline in value of a house due to wear and tear, adverse changes in the neighborhood, or any other reason.
Disclosures (VA)	Information that must be given to consumers about their financial dealings.
Discount Points (VA)	Additional points you can pay a lender to lower the interest rate on your loan at closing. Each point is equal to 1 percent of the loan amount (e.g. two points on a $100,000 mortgage would cost $2,000). Also referred to as Points.
Documentary Stamps (VA)	A State tax, in the forms of stamps, required on deeds and mortgages when real estate title passes from one owner to another. The amount of stamps required varies with each State.
Documentation (VA)	A list of documents you will be required to provide when submitting a loan application. The required documents range from w2's to a signed sales contract.
Documentation Class (VA)	Category determined by Loan Prospector to indicate the minimum level of documentation you must obtain to underwrite the loan. The three possible classes are: Accept Plus, Accept and Caution.
Down Payment (VA)	The difference between the loan amount and the purchase price, usually paid immediately upon purchase with cash or a trade-in
Down Payment and Fees (VA)	Money paid to make up the difference between the purchase price and mortgage amount plus the closing cost fees to close the loan.
Due-On-Sale Clause (VA)	A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home.
Down Payment (VA)	The difference between the loan amount and the purchase price, usually paid immediately upon purchase with cash or a trade-in
Down Payment and Fees (VA)	Money paid to make up the difference between the purchase price and mortgage amount plus the closing cost fees to close the loan.
Due-On-Sale Clause (VA)	A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home.
Duplex (VA)	A dwelling divided into two separate living units, either side-by-side with a common wall or one above the other.
Earnest Money	Money given by a buyer to a seller as part of the purchase price to bind a transaction or assure payment.
Easement Rights	A right-of-way granted to a person or company authorizing access to or over the owner's land. An electric company obtaining a right-of-way across private property is a common example.
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.
Electronic Payment	A variety of systems and technologies for transferring funds electronically rather than by check.
Encroachment	An obstruction, building, or part of a building that intrudes beyond a legal boundary onto neighboring private or public land, or a building extending beyond the building line.
Encumbrance	A legal right or interest in land that affects a good or clear title, and diminishes the land's value. It can take numerous forms, such as zoning ordinances, easement rights, claims, mortgages, liens, charges, a pending legal action, unpaid taxes, or restrictive covenants. An encumbrance does not legally prevent transfer of the property to another. A title search is all that is usually done to reveal the existence of such encumbrances, and it is up to the buyer to determine whether he wants to purchase with the encumbrance, or what can be done to remove it.
Equal Credit Opportunity Act (ECOA)	Is a federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.
Equity	The difference between the fair market value and current indebtedness, also referred to as the owner's interest.
Equity and Fees	The difference between the Fair Market Value and current indebtedness, plus the Closing Cost Fees to close the loan.
Escrow	Refers to a neutral third party who carries out the instructions of both the buyer and seller to handle all the paperwork of settlement or "closing." Escrow may also refer to an account held by the lender into which the homebuyer pays money for tax or insurance payments.
Electronic Payment	A time saving payment method where your loan payment is automatically deducted from your checking or savings account. You may be able to get a lower interest rate and you don't have to mail in your payment each month. You may also be able to choose your payment date.
Fannie Mae	A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA. This institution, which provides funds for one in seven mortgages, makes mortgage money more available and more affordable. Also Referred to as Federal National Mortgage Association.
Farmers Home Administration (FmHA)	Provides financing to farmers and other qualified borrowers who are unable to obtain loans elsewhere.
Federal Home Loan Mortgage Corporation (FHLMC)	Also called Freddie Mac, is a quasi-governmental agency that purchases conventional mortgages from insured depository institutions and HUD-approved mortgage bankers.
Federal Housing Administration (FHA)	A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders. FHA also sets standard for underwriting mortgages.
Federal National Mortgage Association (FNMA)	Also known as Fannie Mae. A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA. This institution, which provides funds for one in seven mortgages, makes mortgage money more available and more affordable.
FHA Loan	A loan insured by the Federal Housing Administration open to all qualified home purchasers. While there are limits to the size of FHA loans, they are generous enough to handle moderate-priced homes almost anywhere in the country.
FHA Mortgage Insurance	Requires a small fee (up to 3 percent of the loan amount) paid at closing or a portion of this fee added to each monthly payment of an FHA loan to insure the loan with FHA. On a 9.5 percent $75,000 30-year fixed-rate FHA loan, this fee would amount t o either $2,250 at closing or an extra $31 a month for the life of the loan. In addition, FHA mortgage insurance requires an annual fee of 0.5 percent of the current loan amount, the more years the fee must be paid.
Finance Charge	The total dollar amount credit will cost.
Finance Contract	A legal document specifying the terms of a loan.
Financing Concessions	Funds originating from an interested party to the transaction used to reduce the mortgage interest rate, subsidize the borrower's monthly payment, contribute to the financing charges (such as discount points, loan fees, commitment and/or origination fees), and pay borrower expenses (such as application fees, homeowner association fees, appraisal fees, transfer taxes, tax stamps, attorney fees, surveys, closing costs, and title insurance).
Fixed Rate Mortgage	A mortgage on which the interest rate is set for the term of the loan.
Fixed Rate Mortgages	Characteristics of a fixed rate mortgage: A rate that does not change during the life of the loan. A consistent payment. Less risk because of payment stability.
Float Period	The float period refers to the time between when you accept a loan and when you lock-in your rate. During this time the interest rate and points on your loan will fluctuate with the market until you lock.
Foreclosure	A legal procedure in which property securing debt is sold by the lender to pay a defaulting borrower's debt.
Freddie Mac	Is a quasi-governmental agency that purchases conventional mortgages from insured depository institutions and HUD-approved mortgage bankers. Also Referred to as Federal Home Loan Mortgage Corporation.
General Warranty Deed	A deed which conveys not only all the grantor's interests in and title to the property to the grantee, but also warrants that if the title is defective or has a "cloud" on it (such as mortgage claims, tax liens, title claims, judgments, or mechanic's liens against it) the grantee may hold the grantor liable.
Ginnie Mae	Provides sources of funds for residential mortgages, insured or guaranteed by FHA or VA.. Also referred to as Government National Mortgage Association.
Government National Mortgage Association (GNMA)	Also known as Ginnie Mae, provides sources of funds for residential mortgages, insured or guaranteed by FHA or VA..
Grace Period	The amount of time after a payment due date when no interest is charged. You will frequently see grace periods of 20 to 30 days offered by certain credit card issuers. Credit card grace periods only apply if a cardholders previous month's balance was paid in full.
Graduated Payment Mortgage (GPM)	A type of flexible-payment mortgage where the payments increase for a specified period of time and then level off. This type of mortgage has negative amortization built into it.
Grantee	That party in the deed who is the buyer or recipient.
Grantor	That party in the deed who is the seller or giver.
Gross Monthly Income	The total amount the borrower earns per month, before any expenses are deducted.
Gross Salary	The total amount of salary earned before taxes and other deductions are made. Different than net pay or take home pay, which is the amount of salary after taxes and other deductions are taken. Lenders look at your gross and net pay to help decide how much money to lend you.
Guarantee	A promise by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract.
Home Equity Line of Credit (HELOC)	Secondary financing that consists of a revolving line of credit secured by a lien junior to a mortgage.
Home Equity Loan	A loan in real estate property that is used to secure or guarantee the amount borrowed. Sometimes referred to as a second mortgage or borrowing against your home. The loan allows you to tap into your home's built-up equity, which is the difference between the amount your home could be sold for, and any claims held against it. People often use a home equity loan for home improvements or to pay for a new car. A home equity loan is a good way to borrow money for two main reasons. First, the interest rate is usually one of the lowest loan rates a borrower can get. Also, the interest you pay on the loan is usually tax-deductible.
Home Value models	Standard used to derive data from millions of transactions; supported by property values for hundreds of counties in all 50 states. When you submit a conventional/conforming transaction, the service automatically searches Home ValueSM models to determine if it can support the value of the transaction, based on the loan's overall risk profile.
Housing Expenses-to-Income Ratio	The ratio, expressed as a percentage, which results when a borrower's housing expenses are divided by his/her net effective income (FHA/VA loans) or gross monthly income (Conventional loans).
HUD	U.S. Department of Housing and Urban Development. Office of Housing/Federal Housing Administration within HUD insures home mortgage loans made by lenders and sets minimum standards for such homes.
Impound	That portion of a borrower's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Also known as reserves.
Index	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.
In-File Credit Report	Information issued by one credit repository that contains an individual credit history for you to review in determining a loan applicant's creditworthiness.
Initial Interest Rate	The initial interest rate is the rate you pay when you first get your loan. On an ARM, this rate may be for 5 years (5/1 ARM) or only a month.
Installment Debt	Liability that typically has a fixed interest rate, fixed term, and equal payments amortized over a set number of months, agreed upon by the lender and the borrower prior to disbursement.
Insurance	A type of legal relationship whereby individuals, companies and other entities concerned about the risk of losses pay premiums to an insurance company for protection against potential losses. Specific types of insurance relevant to vehicles include collision, comprehensive, uninsured motorist, underinsured motorist, rental reimbursement, and vehicle-related accident insurance.
Insurance Premium	The amount you must pay at specified intervals (e.g. monthly or semi-annually) to the insurance company to guarantee coverage from losses. The premium amount is calculated using various risk factors, which vary according to the type of insurance you are seeking.
Interest	A charge paid for borrowing money. Interest is usually expressed as a percentage of the amount borrowed or interest rate.
Interest Cost	Interest cost shows how much you will pay in interest over the life of the loan, assuming you keep the loan for the entire period.
Interest Due	Interest due is the portion of the mortgage payment that goes toward interest. When you close on your home, you will usually owe interest for the time between your closing date and when you make your first payment.
Interest Rate	The annual rate of interest on the loan, expressed as a percentage of 100.
Interest Rate Adjustment Period	The interest rate adjustment period is how often your rate is adjusted on an ARM after the initial rate period is over. For example, a 5/1 ARM means you have an initial rate period of 5 years that is fixed and then after 5 years, your rate changes every year.
Interest Rate Ceiling	The interest rate ceiling is the highest interest rate possible under an ARM. You may hear this called the lifetime cap and it based on the number of percentage points your rate can increase from your initial rate.
Interest Rate Decrease Cap	An interest rate decrease cap is the maximum allowable decrease in your interest rate (on an ARM) each time your rate is adjusted. It is usually 1 or 2 percentage points. If rates go down 4% your rate may only go down 2% due to the cap.
Interest Rate Floor	The rate floor is the lowest interest rate possible under an ARM loan.
Interest Rate Increase Cap	The interest rate increase cap is the maximum allowable increase in your interest rate (on an ARM) each time your rate is adjusted. It is usually 1 or 2 percentage points. For example, if your rate adjusts every year, each year it cannot exceed the stated cap.
Interest Rate Index	The interest rate index is the specific fund/security that your interest rate on an ARM is tied to. Common indexes are Treasury Constant Maturities or Cost of Funds indices. All the indices are published regularly in readily available sources.
Intro Period	The timeframe in which a special intro rate may be in effect. After the intro period ends, the interest rate will usually increase.
Intro Rate	Introductory rates are usually set below normal interest rates and may be offered only for a short period at the beginning of the loan or credit line. Lenders may use this special rate to attract borrowers. After a set timeframe, the interest rate will usually increase.
Investor	Money source for a lender.
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.
Jumbo Loan	A loan which is larger (more than $322,700) than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate.
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Late Payment	A payment made later than agreed upon in a credit contract and on which additional charges may be imposed.
Lender	Company that performs the functions necessary to complete a mortgage transaction. Lenders include approved sellers, mortgage brokers, and third-party originators (TPOs).
Lender Fees	These are items payable in connection with the loan and contribute to the total amount of the loan's closing costs. These are the fees that lenders charge to process, approve and make the mortgage loan. See Closing Costs for more information.
Liability on an Account	Legal responsibility to repay debt.
Lien	A claim upon a piece of property for the payment or satisfaction of a debt or obligation.
Liquid Assets	Cash or assets that can be immediately converted to cash.
Loan Amount	The amount of debt not including interest.
Loan Program	Defines the scope of your mortgage, including the type of interest rate you have and the mortgage term. For example, your loan program may be for 30 years with a fixed rate or may be for 5 years with an adjustable rate.
Loan terms	Different requirements of a loan that determine the borrower's and lender's financial obligations. Common terms are Annual Percentage Rate (APR), principal, and length of loan. Usually, the better the borrower's credit history, the better the loan terms. A good combination of loan terms is simple interest, a low APR and no prepayment penalties.
Loan-To-Value Ratio	The relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage.
Lock-In	A commitment you obtain from a lender assuring you a particular interest rate or feature for a definite time period. Provides protection should interest rates rise between the time you apply for a loan, acquire loan approval and close the loan and receive the funds you have borrowed.
Lock Period	A lock period refers to the amount of time prior to closing that you can secure an interest rate for your loan. Generally, lock periods range from 30 days to over 90 days. Generally, the longer the lock period, the more you pay in points or interest. If your loan is "lockable", your Lender will identify the available lock period.
Lockable	You can "lock in" the current interest rate for a set length of time, usually 30, 45 or 60 days. By "locking in" a rate the interest rate is locked and if interest rates increase, your "locked in" rate will not change. To lock an interest rate, you must enter into a written agreement with your Lender.
Margin	The amount a lender adds to the index on an adjustable rate mortgage to establish the adjusted interest rate.
Market Value	The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a given time.
Marketable Title	A title that is free and clear of objectionable liens, clouds, or other title defects. A title which enables an owner to sell his property freely to others and which others will accept without objection.
Material Debt	Liability that is substantial. The debt results from a recent inquiry and could affect the ratios used to make a decision on the loan.
Maximum loan amount	The greatest amount of money that a borrower is qualified to borrow.
Maximum loan amount	The greatest amount of money that a borrower is qualified to borrow.
Merged Credit Reports	Information issued by one credit reporting company that receives credit history information from more than one credit repository and combines all of it into one concise format. May be individual or joint.
Minimum Down Payment	Minimum down payment is the amount of money you are required to put down at closing. If the minimum is 10%, you must make a down payment of at least $10,000 on a $100,000 house.
Monthly Payment	The amount paid each month towards the principal and interest amount of a loan. The monthly payment may or may not include taxes and insurance.
Monthly Payment (P&I)	The monthly payment amount shown includes only principal and interest. When comparing with other offers please take this into consideration.
Mortgage	A lien or claim against real property given by the buyer to the lender as security for money borrowed. Under government-insured or loan-guarantee provisions, the payments may include escrow amounts covering taxes, hazard insurance, water charges, and special assessments. Mortgages generally run from 10 to 30 years, during which the loan is to be paid off.
Mortgage (Open-End)	A mortgage with a provision that permits borrowing additional money in the future without refinancing the loan or paying additional financing charges. Open-end provisions often limit such borrowing to no more than would raise the balance to the original loan figure.
Mortgage Broker	A person or entity that specializes in loan originations, receiving a commission to match borrowers and lenders. The Mortgage Broker performs some or most of the loan processing functions such as taking loan applications, ordering credit reports, appraisals, and title reports. Typically the Mortgage Broker does not underwrite the loan and generally does not use its own funds for closing. The Mortgage is generally closed in the name of the lender who commissioned the broker's services. A Mortgage Broker will not service the Mortgage. An entity or individual engaged to handle or perform, for a Seller or correspondent, part of the mortgage application processing, underwriting, funding or post-closing functions, but not any activities related to obtaining an application for a wholesale origination. This entity is typically paid on a fee basis for services performed, with the payment of fees not being contingent on Mortgage approval or closing.
Mortgage Commitment	A written notice from the bank or other lending institution saying it will advance mortgage funds in a specified amount to enable a buyer to purchase a house.
Mortgage Insurance	Money paid to insure the mortgage when the down payment is less than 20 percent.
Mortgage Insurance Premium	The payment made by a borrower to the lender for transmittal to HUD to help defray the cost of the FHA mortgage insurance program and to provide a reserve fund to protect lenders against loss in insured mortgage transactions. In FHA insured mortgages this represents an annual rate of one-half of one percent paid by the mortgagor on a monthly basis.
Mortgage Note	A written agreement to repay a loan. The agreement is secured by a mortgage, serves as proof of an indebtedness, and states the manner in which it shall be paid. The note states the actual amount of the debt that the mortgage secures and renders the mortgagor personally responsible for repayment.
Mortgagee	The lender.
Mortgagor	The borrower or homeowner.
Multiple Listing Service (MLS)	A computer database that compiles information on houses listed for sale in a particular area by participating real estate agents. It is maintained and accessed by agents who use the listings to match their clients' needs with property descriptions on the database.
Negative Amortization	Occurs when your monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the unpaid balance of the loan. The danger of negative amortization is that the buyer ends up owing more than the original amount of the loan.
Net Effective Income	The borrower's gross income minus federal income tax.
Net Pay	The amount of salary left or clear after taxes and other deductions are taken. Different than gross pay, which is the amount of salary earned before income is taxed and other deductions are taken. Lenders look at your gross and net pay to help decide how much money to lend you.
No-Doc Mortgage	A no-documentation or "no-doc" mortgage is a product that certain lenders offer to borrowers which generally requires a down payment of at least 5% to 30% or more of the home purchase price or who generally have at least 25% equity in their home. Loan programs featuring lower down payments (5-24%) are also available to borrowers with excellent credit. No-doc mortgages are generally a wise choice for self-employed people, those who do not wish to verify their income, and those with a brief or blemished credit history, or no credit. The benefits of a no-doc mortgage include a shorter application process since you are not required to provide income, employment or asset documentation, as well as a streamlined approval process through the lender because there is little subsequent verification. However, no doc mortgages generally will be at slightly higher interest rates and are offered by fewer lenders.
Non-Assumption Clause	A statement in a mortgage contract forbidding the assumption of the mortgage without the prior approval of the lender.
Non-Conforming Loan	A conventional home mortgage that does not meet the criteria of Fannie Mae or Freddie Mac for various reasons including loan amount, loan characteristics or underwriting guidelines. Non-Conforming loans usually incur a higher rate and/or points.
Open-End Credit	A line of credit that may be used over and over again, including credit cards, overdraft credit accounts, and home equity lines.
Origination Fee	A fee commonly charged by a lender for processing a loan application. The origination fee may be presented in the form of points or a dollar amount. Each point is equal to 1 percent of the loan amount (e.g. two points on a $100,000 mortgage would cost $2,000).
Piggyback Loan	An alternative to private mortgage insurance, also known as a second trust loan. The most common type is an 80/10/10 where a first mortgage is taken out for 80% of the homes value, a down payment of 10% is made and another 10% is financed in a second trust at a higher interest rate. In some cases, you may even qualify for a piggyback loan with as little as a 5% down payment.
PITI	Principal, interest, taxes, and insurance. Also called monthly housing expense.
Plat	A map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land, and easements.
Points	Additional points you can pay a lender to lower the interest rate on your loan at closing. Each point is equal to 1 percent of the loan amount (e.g. two points on a $100,000 mortgage would cost $2,000). Also referred to as Discount Points. Points may include discount points and/or origination fee.
Power of Attorney	A legal document authorizing one person to act on behalf of another.
Pre-paid Items	Pre-paid items are amounts that are required by the Lender to be paid in advance of their due date at settlement. You may be required to prepay certain items at the time of settlement, such as accrued interest, mortgage insurance premiums and hazard insurance premiums. Pre-paid items contribute to the total amount of the loan's closing costs. See Closing Costs for more information. Note: You will only see per-diem interest under this category on our site. For some lenders you will see insurance premiums under this category also; we have categorized our insurance premiums under the Escrow Deposits.
Prepaids	Expenses necessary to create an escrow account or to adjust the seller's existing escrow account. Can include taxes, hazard insurance, private mortgage insurance and special assessments.
Prepayment	A privilege in a mortgage permitting the borrower to make payments in advance of their due date.
Prepayment Premium	Money charged for an early repayment of debt. Prepayment premiums are allowed in some form (but not necessarily imposed) in 36 states and the District of Columbia.
Prime Rate	The interest rate charged by lenders to their best, most creditworthy customers. A less credit worthy customer may be offered a loan at the prime rate plus anywhere from 2 to 10 percent. Borrowing at below-prime also occurs, but is less common and usually applies to businesses, not individual consumers. The Federal Reserve determines whether to lower or raise the prime rate based on a variety of economic factors. Many consumer loans, such as auto, home equity, mortgage and credit card loans are based upon the prime rate. Building and maintaining a good credit history are two of the most important qualifications for prime-rate borrowing.
Principal	The amount of debt, not counting interest, left on a loan.
Private Mortgage Insurance (PMI)	In the event that you do not have a 20 percent down payments, lenders will allow a smaller down payment-as low as 5 percent in some cases. With the smaller down payments loans, however, borrowers are usually required to carry private mortgage insurance. Private mortgage insurance will require an initial premium payment of 1.0 percent to 5.0 percent of your mortgage amount and may require an additional monthly fee depending on your loan's structure. On a $75,000 house with a 10 percent down payments, this would mean either an initial premium payment of $2,025 to $3,375, or an initial premium of $675 to $1,130 combined with a monthly payment of $25 to $30.
Processing	Processing are the steps a lender takes with your loan application to gather your information for underwriting. Processing involves building your file of information for your loan. Processing includes getting the credit report, appraisal, verification of employment, assets, etc.
Q-form	A Q-form is series of questions that you complete in order to request a loan. What does the Q stand for? You choose - quality, quick, qualification, questionnaire.
Qualification	Qualification is the initial process to see if you have enough cash and sufficient income to meet the requirements of the lender for a loan you want. Qualification is not an approval because it does not include your credit history. Qualified borrowers can be turned down if they have poor credit history.
Qualification Ratios	Qualification ratios are set by the lender that state your housing expense to income, and housing expense plus other debts to income, cannot exceed a specified number. Many lenders use a 28% housing expense to income and a 36% housing expense plus debts to income. Other ratios may be how much you put down on a home.
Quitclaim Deed	A deed which transfers whatever interest the maker of the deed may have in the particular parcel of land. A quitclaim deed is often given to clear the title when the grantor's interest in a property is questionable. By accepting such a deed the buyer assumes all the risks. Such a deed makes no warranties as to the title, but simply transfers to the buyer whatever interest the grantor has.
Rate	In lending, the amount of interest on the loan expressed as an interest rate or annual percentage rate (APR) of the principal.
Rate Cap Insurance	Rate cap insurance limits how much the interest rate can increase during the float period (usually no more than .5%). For example, if you get the insurance when the rate is 7.5%, you will be guaranteed that the rate will not go above 8%. This protects you from uncertainty in the market and rising rates. With the insurance you will be told that you can lock-in a rate, usually within 60 days of closing. You can also lock if the rate goes lower.
Rate/Point Options	These options are all the combinations of interest rate and points that are offered on a particular loan. Usually you will find that paying more points lowers interest rates.
Real Estate Broker	A middle man or agent who buys and sells real estate for a company, firm, or individual on a commission basis. The broker does not have title to the property, but generally represents the owner.
Real Estate Settlement Procedures Act (RESPA)	RESPA is a federal law that allows consumers to review information on known or estimated settlement costs once after application and once prior to or at settlement. The law requires lenders to furnish information after application only.
REALTOR ender for recording a home sale with the local authorities, thereby making it part of the public records.
Refinancing	The process of the same mortgagor paying off one loan with the proceeds from another loan.
Renegotiable Rate Mortgage (RRM)	A loan in which the interest rate is adjusted periodically. Sometimes referred to as Adjustable Rate Mortgage.
Required Cash	Required cash is the total cash required for you to close the loan. This cash goes towards down payment, points, and other charges paid to the lender. It also goes towards up-front charges for things like mortgage insurance and other settlement charges associated with the transaction such as title insurance, taxes, etc. Your good faith estimate will show how much cash you need for closing.
Reserves	Verified liquid assets remaining after the borrower pays down payment and closing costs.
Residential Mortgage Credit Report (RMCR)	Detailed account of the credit, employment, and residence history, as well as public-record information, concerning an individual.
Restrictive Covenants	Private restrictions limiting the use of real property. Restrictive covenants are created by deed and may "run with the land," binding all subsequent purchasers of the land, or may be "personal" and binding only between the original seller and buyer. The determination whether a covenant runs with the land or is personal is governed by the language of the covenant, the intent of the parties, and the law in the State where the land is situated. Restrictive covenants that run with the land are encumbrances and may affect the value and marketability of title. Restrictive covenants may limit the density of buildings per acre, regulate size, style or price range of buildings to be erected, or prevent particular businesses from operating or minority groups from owning or occupying homes in a given area. (This latter discriminatory covenant is unconstitutional and has been declared unenforceable by the U.S. Supreme Court).
Reverse Annuity Mortgage (RAM)	A form of mortgage in which the lender makes periodic payments to the borrower using the borrower's equity in the home as security.
Risk Grade	Assessment of a loan's relative risk with respect to its probability of default. Risk Grade Evaluation quantifies the risk by assigning a grade from RG1 (highest quality) to RG7 (lowest quality).
Second Home	One-unit property owned by an individual, occupied by the borrower for some portion of the year, and not subject to any timesharing ownership arrangement. The property must be in a location where it can function reasonably as a second home.
Second Trust Loan	An alternative to private mortgage insurance, also known as a piggyback loan. The most common type is an 80/10/10 where a first mortgage is taken out for 80% of the homes value, a down payment of 10% is made and another 10% is financed in a second trust at a higher interest rate. In some cases, you may even qualify for a second trust loan with as little as a 5% down payment.
Secured Debt	Money borrowed that is guaranteed (or secured) by the borrower's funds and held by the lender in an interest-bearing account. Typically required when a borrower is without credit or has poor credit. The lender usually returns the secured money plus a nominal rate of earned interest to the borrower with a certain period of time if a good credit history is established. Distinguished from unsecured debt.
Security	Property pledged to the creditor in case of a default on a loan; also referred to as collateral.
Security Interest	The creditor's right to take property or a portion of property offered as security.
Self-Employed Borrower	Applicant who owns 25 percent or more interest in a business.
Service Charge	A component of some finance charges, such as the fee for triggering an overdraft checking account into use.
Servicing	All the steps and operations a lender perform to keep a loan in good standing, such as collection of payments, payment of taxes, insurance, property inspections and the like.
Settlement	The meeting between the buyer, seller and lender where the property and funds legally change hands. Also referred to as Closing.
Settlement Costs	Includes a loan origination fee, points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. The closing costs usually are about 2 percent to 6 percent of the mortgage amount.
Shared Appreciation Mortgage (SAM)	A mortgage in which a borrower receives a below-market interest rate in return for which a lender (or another investor such as a family member or other partner) receives a portion of the future appreciation in the value of the property. May also apply to mortgages where the borrower shares the monthly principal and interest payments with another party in exchange for a part of the appreciation.
Simple Interest	Interest that is paid on the principal amount borrowed. Considered the best interest term for a borrower because it is not compounded.
Special Assessments	A special tax imposed on property, individual lots or all property in the immediate area, for road construction, sidewalks, sewers, streetlights, etc.
Special Lien	A lien that binds a specified piece of property, unlike a general lien, which is levied against all one's assets. It creates a right to retain something of value belonging to another person as compensation for labor, material, or money expended in that person's behalf. In some localities it is called "particular" lien or "specific" lien. Also see lien.
Special Warranty Deed	A deed in which the grantor conveys title to the grantee and agrees to protect the grantee against title defects or claims asserted by the grantor and those persons whose right to assert a claim against the title arose during the period the grantor held title to the property. In a special warranty deed the grantor guarantees to the grantee that he has done nothing during the time he held title to the property which has, or which might in the future, impair the grantee's title.
Survey	A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to known points, its dimensions, and the location and dimensions of any building.
Tax	As applied to real estate, an enforced charge imposed on persons, property or income, to be used to support the State. The governing body in turn utilizes the funds in the best interest of the general public.
Tax Assessed Value	The Tax Assessed Value (TAV) is the dollar amount assigned to your property for the purposes of taxation. The TAV is not necessarily the market value of your home, but the TAV will take into consideration your home's market value, as well other factors, including your property's tax class, maintenance costs, home improvements, etc. The TAV is established by the county's tax assessor who utilizes features such as sales prices from surrounding properties, location, condition and age of the property to determine the TAV.
Term	The period of time between the beginning loan date on the legal documents and the date the entire balance of the loan is due.
Term Mortgage	Usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a specific time. Also known as Balloon Payment Mortgage.
Third Party Fees	These are fees charged by vendors to perform services related to your loan, such as title search, mortgage recording and settlement. Third party fees contribute to the total amount of the loan's closing costs. See Closing Costs for more information.
Title	A document that gives evidence of an individual's ownership of property.
Title Insurance	A policy, usually issued by a Title Insurance company, which insures a homebuyer against errors in the title search. The cost of the policy is usually a function of the value of the property, and is often borne by the purchaser and/or seller.
Title Search	An examination of municipal records to determine the legal ownership of property. Usually is performed by a title company.
Treasury Index	These ARMs are indexed to treasury bills or securities. Depending on the ARM, the rate will adjust every 6 months, every year, or every 3 years.
Trustee	A party who is given legal responsibility to hold property in the best interest of or "for the benefit of" another. The trustee is one placed in a position of responsibility for another, a responsibility enforceable in a court of law.
Truth-in-Lending	A federal law requiring disclosure of the Annual Percentage Rate to homebuyers shortly after they apply for the loan.
Two-Step Mortgage	A mortgage in which the borrower receives a below-market interest rate for a specified number of years (most often seven or 10 years), and then receives a new interest rate adjusted (within certain limits) to market conditions at that time. The lender sometimes has the option to call the loan, due within 30 days notice at the end of seven or 10 years. Also called "Super Seven" or "Premier" mortgage.
Underwriting	The analysis of the risk involved in making a mortgage loan to determine whether the risk is acceptable to the lender. Underwriting involves the evaluation of the property as outlined in the appraisal report, and of the borrower's ability and willingness to repay the loan.
VA Loan	Mortgage loan made by an approved lender and guaranteed by the Department of Veterans Affairs. VA loans are made eligible to veterans and those currently serving in the military, and can have lower down payment than other types of loans.
VA Mortgage Funding Fee	A premium of up to 2 percent (depending on the size of the down payment) paid on a VA-backed loan. On a $75,000 30-year fixed-rate mortgage with no down payment, this would amount to $1,406 either paid at closing or added to the amount financed.
Variable Rate Mortgage (VRM)	See Adjustable Rate Mortgage.
Verification of Deposit (VOD)	A document signed by the borrower's financial institution verifying the status and balance of his/her financial accounts.
Verification of Employment	A document signed by the borrower's employer verifying his/her position and salary.
Waiver	Relaxing a requirement pertaining to the eligibility of a loan. Waivers may include permitting less documentation than would otherwise be required.
Wholesaler	A wholesaler is a lender that provides loans to borrowers through mortgage brokers or correspondents. The mortgage broker or correspondent works with you and gets your application.
Wraparound	Results when an existing assumable loan is combined with a new loan, resulting in an interest rate somewhere between the old rate and the current market rate. The payments are made to a second lender or the previous homeowner, who then forwards the payments to the first lender after taking the additional amount off the top.
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Zoning Ordinances	The acts of an authorized local government establishing building codes, and setting forth regulations for property land usage.

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