A mortgage loan in which the interest rate varies at specified intervals with changes in a specified index, and may result in a variable monthly payments. Interest rate on these loans are generally two to two and one half percent lower than the interest rates on a comparable fixed rate loan.
The act of estimating the monetary value of real property, personal property, or intangible property, usually performed as a service by someone recognized as an expert or certified by an organization or government agency.
The closing date is set during the negotiation phase, and is usually several weeks after the offer is formally accepted. On the closing date, the parties consummate the purchase contract, and ownership of the property is transferred to the buyer.
It is common for a variety of costs associated with the transaction (above and beyond the price of the property itself) to be incurred by either the buyer or the seller. These costs are typically paid at the closing, and are known as closing costs.
(ECOA) is a United States law that states that creditors must evaluate candidates based on credit worthiness only, not on factors that have nothing to do with their ability to repay the debt. The law applies to any creditor who regularly extends credit to consumers, including banks, retailers, bankcard companies, finance companies, and credit unions.
Legal arrangement in which an asset (often money) is delivered to a third party to be held in trust pending a contingency or the fulfillment of a condition or conditions in a contract such as payment of a purchase price.
The legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property due to the owner's failure to comply with an agreement between the lender and borrower called a "mortgage" or "deed of trust".
Federal Home Loan Mortgage Corporation ("FHLMC")
The FHLMC was created in 1970 to expand the secondary market for mortgages in the United States. Freddie Mac buys mortgages on the secondary market, pools them and sells them as mortgage-backed securities to investors on the open market.
This must be provided by a mortgage lender in the United States to a customer, as required by the Real Estate Settlement Procedures Act - or RESPA The estimate is of the fees due at closing and must be provided within three business days of applying for a loan.
It requires financial institutions to maintain and annually disclose data about home purchases, home purchase pre-approvals, home improvement, and refinance applications involving 1 to 4 unit and multifamily dwellings.
A mathematical calculation which expresses the amount of a first mortgage lien as a percentage of the total appraised value of real property. For instance, if a borrower wants $130,000 to purchase a house worth $150,000, the LTV ratio is $130,000/$150,000 or 87%.
A method of using property (real or personal) as security for the payment of a debt. The term mortgage refers to the legal device used in securing the property, but it is also commonly used to refer to the debt secured by the mortgage, the mortgage loan.
(PMI) is insurance payable to a lender that may be required when taking out a mortgage loan. It is insurance in the case that the mortgagor is not able to repay the loan, and the lender is not able to recover its costs after foreclosing the loan and selling the mortgaged property.
A promissory note, also referred to as a note payable in accounting, is a contract detailing the terms of a promise by one party to pay a sum of money to the other. The obligation may arise from the repayment of a loan or from another form of debt.
A legal document by which a person releases or "quits" any claim that they may have had to property. Of the different types of deeds, the quit-claim has the least assurance that the person receiving it will actually get any rights.
The Act prohibits kickbacks between lenders and third-party settlement service agents in the real estate settlement process (Section 8 of RESPA), requires lenders to provide a good faith estimate for all the approximate costs of a particular loan and finally a HUD-1 at the closing of the real estate loan. The final HUD-1 allows the borrower to know specifically the costs of the loan and to whom the fees are being allotted.
(To rescind or set aside a contract) refers to the cancellation of the contract between the parties. This is done to gives a three business day period after closing to cancel and receive a refund of all fees in a refinancing of a loan.
Insurance against loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. It is available in many countries but it is principally a product developed and sold in the United States. It is meant to protect an owner's or lender's financial interest in real property against loss due to title defects, liens or other matters.