|
 |
A- G | H - O | P - Z
| |
Hazard Insurance |
| |
A form of insurance in which the insurance company protects the insured from specified losses, such as fire, windstorm and the like. |
| |
Hedging |
| |
The matching of assets to liabilities of a similar nature; the assumption of one risk is calculated to offset another. In mortgage banking, the purchase or sale of mortgage futures contracts to offset market transactions to be made at a later date. |
| |
Hiatus |
| |
A gap or space left between two parcels of land and not included in the legal description of either parcel. Similar terms are Gaps and Gores. |
| |
Home Equity Loan |
| |
A loan that lets you borrow back money against the difference of what you own on your current home loan and the home's estimated sales price. People generally use home equity loans to get cash for large expenses like education, home improvement, or health care. |
| |
Homestead Deed |
| |
A declaration filed in the land records that an individual is asserting his homestead exemption. That exemption allows one to protect some assets (amount varies by state) against the claims of creditors.
|
| |
House Fee |
| |
Many mortgage firms must borrow funds on a short term basis in order to originate loans which are to be sold later in the secondary mortgage market (or to investors). When the prime rate of interest is higher on short term loans than on mortgage loans, the mortgage firm has an economic loss which is offset by charging a warehouse fee. |
| |
Housing Expenses-To-Income Ratio |
| |
The ratio, expressed as a percentage, which results when a borrower's housing expenses are divided by his/her gross monthly income. See debt-to-income ratio.
|
| |
Housing Ratio |
| |
The ratio, expressed as a percentage, which results when a borrower's housing expenses are divided by his/her gross monthly income. See debt-to-income ratio. |
| |
|
|
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. |
|
Income Approach |
|
Forces trustees to release post petition payments being held prior to the chapter 13 confirmation hearing. |
|
Indemnity |
|
A protection against actual loss or damage as a result of the matter mentioned. An indemnity is not an absolute guarantee that something won't happen, it states the terms under which an actual loss will be compensated. |
|
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. |
|
Ingress And Egress |
|
Applied to EASEMENTS, meaning the right to go in and out over a piece of property but not the right to park on it. |
|
Initial Note Rate |
|
With regard to an adjustable rate mortgage, the note rate upon origination. This rate may differ from and is usually less than the fully indexed rate. |
|
Institutional Lender |
|
A financial institution that invests its own funds or funds it is managing in real estate. Mutual savings banks, life insurance companies, commercial banks, pension and trust funds, and savings and loan associations are examples. |
|
Insured Closing Letter |
|
An Indemnity given to a lender from a title insurance company, agreeing to be responsible if the closing agent does not follow the lender's instructions or misappropriates the loan proceeds. Lenders usually require an insured closing letter be on file for each settlement. |
|
Insured Mortgage |
|
A mortgage insured against loss to the mortgagee in the event of default and a failure of the mortgaged property to satisfy the balance owing plus costs of foreclosure. |
|
Internal Rate Of Return |
|
A method of determining investment yield over time assuming a set of income, expense, and property value conditions. It combines the present worth of the right to receive future income streams with the present worth of the right to receive a particular profit when the property is sole. |
|
Intestate |
|
- An estate without a Will. Compare, TESTATE
|
| |
Joint Ownership Agreement |
| |
An agreement between owners defining their rights, ownership, monetary obligations and responsibilities. This could be between and investor and an occupant or the occupants. If an investor is involved, the investor does not take depreciation deductions and none of the occupant's payment is deemed rent for tax purposes. Compare, EQUITY SHARING. |
| |
Joint Tenants |
| |
Two or more persons own a property. Joint tenants with the common law right of survivorship means the survivor inherits the property without reference to the decedent's will. Creditors may sue to have the property divided to settle claims against one of the owners. Compare, TENANTS IN COMMON, TENANTS BY THE ENTIRETY. |
| |
Judgement Lien |
| |
- A judgment is a lien against all real property owned by the judgment debtor in the county where the judgment is docketed (recorded).
|
| |
Jumbo Loan |
| |
- A loan which is larger (more than $214,600 as of 1/1/97) 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.
|
| |
Junior Mortgage |
| |
Mortgage of lesser priority than the prior recorded mortgage. |
| |
Kicker |
| |
A term describing any benefit to a lender above ordinary fixed interest payments. It may be an equity position in a property or a percentage participation in the income stream. |
| |
Land Contract |
| |
Drawn between a buyer and a seller for the sale of property, in which ownership of the property is not transferred until all the payments have been made. |
| |
Late Charge |
| |
An additional charge a borrower is required to pay as penalty for failure to pay a regular installment when due. |
| |
Lease Hold Estate |
| |
Tenants right of possession for a specific period of time under a lease agreement. (Common in Hawaii.) |
| |
Lender |
| |
A financial institution, like a bank, that loans you money to buy a home, and expects you to pay the money back to them in a stated period of time, usually with interest. |
| |
Letter Of Credit |
| |
A letter authorizing a person or company to draw on a bank or stating that the bank will honor their credit up to the stated amount. |
| |
Lien |
| |
A claim upon a piece of property for the payment or satisfaction of a debt or obligation. Property is said to be encumbered by a lien and the lien must be removed to clear title. |
| |
Life Cap |
| |
With regard to an adjustable rate mortgage, a ceiling the note rate cannot exceed over the life of the loan. |
| |
Life Estate |
| |
The right to use, occupy, and own for the life of an individual. |
| |
Loan-To-Value Ratio (LTV) |
| |
The relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage. |
| |
Lock-In Period |
| |
That portion of the term of a mortgage loan during which the loan cannot be prepaid. |
| |
Kicker |
| |
A term describing any benefit to a lender above ordinary fixed interest payments. It may be an equity position in a property or a percentage participation in the income stream. |
| |
Land Contract |
| |
Drawn between a buyer and a seller for the sale of property, in which ownership of the property is not transferred until all the payments have been made. |
| |
Late Charge |
| |
An additional charge a borrower is required to pay as penalty for failure to pay a regular installment when due. |
| |
Lease Hold Estate |
| |
Tenants right of possession for a specific period of time under a lease agreement. (Common in Hawaii.) |
| |
Lender |
| |
A financial institution, like a bank, that loans you money to buy a home, and expects you to pay the money back to them in a stated period of time, usually with interest. |
| |
Letter Of Credit |
| |
A letter authorizing a person or company to draw on a bank or stating that the bank will honor their credit up to the stated amount. |
| |
Lien |
| |
A claim upon a piece of property for the payment or satisfaction of a debt or obligation. Property is said to be encumbered by a lien and the lien must be removed to clear title. |
| |
Life Cap |
| |
With regard to an adjustable rate mortgage, a ceiling the note rate cannot exceed over the life of the loan. |
| |
Life Estate |
| |
The right to use, occupy, and own for the life of an individual. |
| |
Loan-To-Value Ratio (LTV) |
| |
The relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage. |
| |
Lock-In Period |
| |
That portion of the term of a mortgage loan during which the loan cannot be prepaid. |
|
Majority |
|
The age at which a person may handle his or her own affairs.
|
|
Margin Call |
|
A call for the deposit of additional funds or collateral to offset trading losses on an outstanding position that is subject to margin. |
|
Margin |
|
The amount a lender adds to the index on an adjustable rate mortgage to establish the adjusted interest rate. |
|
Market Approach To Value |
|
In appraising, the market value estimate is predicated upon actual prices paid in market transactions. It is a process of correlation and analysis of similar recently sold properties. |
|
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 |
|
- Title without defects or claims so as to be readily accepted without fair or reasonable doubt. Compare, INSURABLE TITLE.
|
|
Maturity Date |
|
The scheduled date for your final payment on a loan. After making the payment on a loan's maturity date, you assume complete ownership of your home from the lender. |
|
MIP (Mortgage Insurance Premium) |
|
An insurance from FHA to the lender against incurring a loss on account of the borrower's default. |
|
Mortgage-Backed Securities |
|
- Bond-type investment securities representing an undivided interest in a pool of mortgages or trust deeds. Income from the underlying mortgages is used to pay of the securities.
|
|
- Mortgage
|
|
A voluntary lien filed against property to secure a debt, usually a loan. It states that if you don't make your payments on the loan in a timely fashion, you may lose your rights to ownership of the home. To foreclose, the lender must often institute a court action and the borrower may have the right to reclaim the property after foreclosure. Compare, DEED OF TRUST. |
|
Mortgagor |
|
The borrower or homeowner |
| |
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 homebuyer ends up owing more than the original amount of the loan. |
| |
Negotiable Instrument |
| |
- Under the Uniform Commercial Code, an instrument that meets certain legal requirements and can be transferred by endorsement or delivery.
|
| |
Net Effective Income |
| |
The borrower's gross income minus federal income tax. |
| |
Net Worth |
| |
The difference between total assets and total liabilities. |
| |
Non Assumption Clause |
| |
A statement in a mortgage contract forbidding the assumption of the mortgage without the prior approval of the lender. Note: The signed obligation to pay a debt, as a mortgage note.. |
| |
Notary Public |
| |
One authorized by law to acknowledge and certify documents and signatures. |
| |
Note |
| |
Obligations |
| |
The things you have to pay for consistently each month, excluding housing costs. Obligations include things like car loans, credit card bills, student loans, and alimony or child support. |
| |
Offer |
| |
A proposal; after acceptance it becomes a contract. |
| |
Open-End Mortgage |
| |
A mortgage with a provision that the outstanding loan amount may be increased upon mutual agreement of the lender and the borrower. |
| |
Option |
| |
- A right given for a consideration to keep an offer to purchase or lease open for specific time.
|
| |
Origination Fee |
| |
The fee charged by a lender to prepare loan documents, make credit checks, inspect and sometimes appraise a property; usually computed as a percentage of the face value of the loan. |
| |
Originator |
| |
- A person who solicits builders, brokers, and others to obtain applications for mortgage loans. Origination is the process by which a mortgage banker or direct lender brings into being a mortgage secured by real property.
|
| |
Owner Of Record |
| |
The actual owner of a property, according to public records. |
|
