Mortgage Glossary

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Abstract (of title)

A written summary of the title history of a particular piece of real estate.

Acceleration Clause

A provision of a mortgage or note which provides that the entire outstanding balance will become due and payable in the event of default.

Accepted Contract

A sales contract signed by both seller and buyer that defines the terms of the sale.

Additional Principal Payment

A payment by a borrower of more than the scheduled principal amount due, in order to reduce the remaining balance of the loan.

Adjustable Rate Mortgage (ARM)

An adjustable rate mortgage, commonly referred to as an ARM, is a loan type that allows the lender to adjust the interest rate during the term of the loan. Generally, these changes are determined by a margin and an index so that the interest rate changes, up or down, are based on market conditions at the time of the change. Most often these interest rate changes are limited by a rate change cap and a lifetime cap. If you apply for an adjustable rate mortgage, the lender is required to provide you with an ARM Program Disclosure which spells out the terms of the loan.

Adjustment Date

The date on which the interest rate changes for an adjustable-rate mortgage (ARM).

Adjustment Period

The period that elapses between the adjustment dates for an adjustable rate mortgage (ARM).

Amortization

Repayment of loan by installment payments. As the payments are made, the debt is reduced so that at the end of fixed period or term, no money will be owed.

Amortization Schedule

A timetable for payment of a mortgage loan. An amortization schedule shows the amount of each payment applied to interest and principals and shows the remaining balance after each payment is made.

Amortization Term

The amount of time required to amortize the mortgage loan. The amortization is expressed as a number of months. For example, for a 30 year fixed rate mortgage, the amortization term is 360 months.

Application Fee

That part of the closing costs pre-paid to the lender at time of application to cover initial expenses.

Appraisal

A report made by a qualified person as to the value of a property as of a given date.

APR (Annual Percentage Rate)

The annual percentage rate refers to the total cost of the loan, expressed as a yearly rate.

Assessed Value

The value placed on a piece of real estate by the taxing authority for the purpose of taxation. Also called an assessment.

Assumption of Mortgage

The purchaser takes over mortgage payments for the balance of the loan, assuming primary liability. Unless specifically released by the lender, the seller remains secondarily liable.

Balloon Mortgage

A mortgage with periodic payments that do not fully amortize the loan. The outstanding balance of the mortgage is due in a lump sum at the end of the term.

Balloon Payment

The final payment that is made at the maturity date of a balloon mortgage and pays the loan in full.

Bridge Loan

A short-term loan secured by the equity in an as-yet-unsold house, with the funds to be used for a down payment and/or closing costs on a new house. There is no payment of principal until the house is sold or the end of the loan term, whichever comes first. Interest payments may or may not be deferred until the house is sold.

Broker

The person who, for a commission or a fee, brings parties together and assists in negotiating contracts between them.

Buydown

Money advanced by an individual (e.g. builder, seller, buyer, lender, developer) to lower monthly mortgage payments for a few years or the whole term.

Call Option

A provision in a home loan that gives the mortgagee the right to call the mortgage due and payable at the end of a specified time period for any reason.

Cap (interest rate)

The maximum interest rate increase allowable on an adjustable rate mortgage. Does not result in negative amortization. See Negative amortization.

Cap (payment rate)

The maximum payment amount increase allowable on an adjustable rate mortgage. May result in negative amortization. See Negative amortization.

Certificate Of Title

A statement that shows ownership of property, stating that the seller has clear legal title.

City/County Tax Stamp

A tax that is required in some municipalities if a property changes hands or a new mortgage is obtained. The amount of this tax can vary with each state, city and county. For our comparison purposes, this fee is considered a tax or other unavoidable fee.

Close of Escrow

A meeting of the parties involved in a real estate transaction to finalize the process. In the case of a purchase, the close of escrow usually involves the seller, the buyer, the real estate broker and the lender. In the case of a refinance, the close of escrow involves the borrower and the lender. Sometimes referred to as the settlement or closing.

Closing

The concluding day of the real estate transaction, when title and deed pass from seller to buyer, the buyer signs the mortgage and pays the purchase price and closing costs.

Closing Costs

Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Also called "settlement costs."

Closing Disclosure

Replaces the HUD-1 Settlement Statement. It is the final disclosure generated by the lender for use in comparing the Loan Estimate against the final costs and fees for the loan scenario. It includes any credits and charges associated with the particular loan transaction.

Closing Statement

A financial disclosure giving an account of all funds received and expected at closing, including the escrow deposit for taxes, hazard insurance and mortgage insurance for the escrow account.

Commission

An agent's or broker's fee for bringing the principals together and helping to negotiate a real estate transaction, often a percentage of the sales price or flat fee.

Commitment

An agreement, frequently in writing, between a lender and a borrower to loan money at a future date, subject to certain conditions.

Comparables

Refers to similar properties used for comparison purposes in the appraisal process. These properties will be reasonably the same size and location, with similar amenities and characteristics, so that the approximate fair market value of the subject property can be determined.

Condominium

Ownership of a single unit in a multiunit building or complex of buildings. Along with this goes a share of ownership of the common areas.

Conforming Loan

A loan that does not exceed the maximum loan amount allowed for the most common mortgage investors. Loans that exceed this amount are referred to as "jumbo mortgages". The cost of obtaining a jumbo mortgage is generally higher than the cost of obtaining a conforming mortgage.

Contingency

A condition that must be met for a contract or a commitment to remain binding.

Conventional Mortgage

Any mortgage loan that is not insured by FHA, guaranteed by VA, of funded by a government authorized bond sale or grant.

Convey

To transfer real estate from one person to another.

Credit Report

The report to a prospective lender on the credit standing of a prospective borrower.

Deed

A legal written document by which title to property is transferred.

Deed of Trust

This document, also known as the mortgage, pledges a property to a lender or trustee as security for the repayment of a debt.

Default

Failure to fulfill the terms as agreed to in the mortgage of note.

Department of Veterans Affairs (VA)

An agency of the federal government that provides services and guarantees residential mortgages made to eligible veterans of the military services.

Deposit

Funds required by a lender in advance of the processing of a loan request. Generally a deposit is collected to cover the costs of an appraisal and credit report and may or may not be refundable.

Disburse

To pay out on the loan.

Disclosures

Information that must be given to consumers about their financial dealings.

Discount Points

Fees that are collected by the lender in exchange for a lower interest rate. Each discount point is 1% of the loan amount. For our comparison purposes, a discount point is considered to be a lender fee. To determine if it is wise to pay discount points to obtain a lower rate, you must compare the up front cost of the points to the monthly savings that result from obtaining the lower rate. Sometimes referred to as "points".

Discount Rate

The interest rate that the Federal Reserve charges member banks for loans, using government securities or eligible paper as collateral. This provides a floor on interest rates, since banks set their loan rates a notch above the discount rate.

Depreciation

A decline in the value of real or personal property. The opposite of appreciation.

Down Payment

The difference between the sale price of a property and the mortgage amount.

Due-On-Sale

A clause in a mortgage which gives the lender the right to require immediate repayment of a mortgage balance if the property changes hands.

Earnest Money

The deposit money given to seller or his agent by the potential buyer at the time of the purchase offer. If the offer is accepted, the money will become part of the down payment.

Easement

A right to the limited use of land owned by another. An electric company, for example, could have an easement to put up electric power lines over someone's property.

Encumbrance

Anything that affects or limits the title to a property, such as outstanding mortgages, easement rights or unpaid property taxes.

Equity

The value in which the owner has in real estate over and above the mortgages against it. When the mortgage and all other debts against the property are paid in full, the owner has 100% equity in his property.

Escrow

Funds and/or deed left in trust to a third party. Generally, a portion of the monthly mortgage payment is held in escrow by the lender to pay for taxes, hazard insurance and yearly mortgage insurance premiums.

First Mortgage

A mortgage that has a primary lien against a property.

Fixed-Rates Mortgage

A mortgage with an interest rate and monthly payments that remain constant over the life of the loan.

Fixture

Property, such as a hot water heater or plumbing fixture, that has become permanently attached to piece of real estate and goes with the property when it is sold.

Flood Certification

An independent agency report required by the lender to determine whether a property is located in a flood hazard zone, which would then require a federally mandated flood insurance policy.

Foreclosure

A legal procedure in which property mortgaged as security for a loan is sold to pay the defaulting borrower's debt.

Graduated Payment Mortgage

A fixed rate loan with monthly payments that start low, increasing by a fixed amount for a specific number of years. After that period, the payments typically remain constant for the duration of the loan.

Grant

A technical term used in deeds of conveyance of property to indicate a transfer.

Grantee

The person to whom an interest in real property is conveyed.

Grantor

The person conveying an interest in real property.

Gross Income

Normal income, including overtime, prior to any payroll deductions, that is regular and dependable. This income may come from more than one source.

Hazard Insurance

Insurance protection against damage to a property from fire, windstorms, and other common hazards.

Homeowner's Insurance

An insurance policy that covers the dwelling and its contents in case of fire or wind damage, theft, liability for property damage and personal liability.

HUD-1 Form

See Real Estate Settlement Statement.

Income Property

Real estate that is owned for investment purposes and not used as the owner's residence.

Index

A published interest rate used to establish the interest rate offered on an Adjustable Rate Mortgage (ARM). Some of the most common indices are treasury bills, treasury securities, London Inter-Bank Offering Rates (LIBOR) and the Cost of Funds Index (COFI).

Inflation

An increase in the amount of money or credit available relative to the amount of goods or services available. Inflation causes an increase in the general price level of goods and services. Over prolonged periods, inflation can reduce the purchasing power of a dollar, making it worth less.

Initial Interest Rate

The original, starting interest rate of a loan at the time of closing. This rate changes for an adjustable-rate mortgage (ARM). Sometimes called a teaser rate.

Installment

A regularly scheduled periodic payment that a borrower agrees to make to a lender.

Installment Loan

Borrowed money that is repaid in equal periodic payments. Cars and furniture are often paid for with installment loans.

Insurance Binder

A document stating that insurance is only temporarily in effect. Because the coverage will expire by a certain date, a permanent policy must be obtained prior to the expiration date.

Interest Rate

The cost of borrowing a lender's money. Interest takes into account the risk and cost to the lender for a loan. The interest rate on a fixed rate mortgage depends on the going market rate and how many discount points you pay up-front. An adjustable rate mortgage's interest is a variable rate made up of the index and the lender's margin.

Interest Rate Buy-down Plan

An arrangement where the property seller, borrower or other party deposits money to an account so that it can be released each month to reduce the borrower's interest rate or monthly payments during a specified period of a loan.

Interest Rate Ceiling

The maximum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage loan note.

Interest Rate Floor

The minimum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage loan note.

Interim Financing

See Bridge Loan.

Investment Property

A property held as an investment or rented out.

Joint Tenancy

A form of co-ownership that gives each tenant equal undivided interest and equal rights in the property, including the right of survivorship.

Judgment

A decree made by a court of law. In judgments that require the repayment of a debt, the court may place a lien against the debtor's real property as collateral for the judgment's creditor.

Judgment Lien

A lien on the property of a debtor resulting from a judgment.

Jumbo Mortgage

A loan that exceeds the maximum loan amount allowed by the most common mortgage investors. The cost of obtaining a jumbo mortgage is generally higher than the cost of obtaining a conforming mortgage. Also known as a non-conforming loan.

No terms found for this letter.

Land Contract

When the buyer agrees to make payments directly to the seller at pre-negotiated terms. The seller agrees to deed the property to the buyer upon completion of the agreement. The buyer becomes the owner of equity in this type of sale. (Also see Owner Financing.)

Lessee

A person or company that signs a lease to get temporary use of property.

Lessor

A person or company that provides temporary use of property usually in return for periodic payment.

Liabilities

A person's financial obligations including both long-term and short-term debt, as well as any other amounts that are owed to others.

Lien

A legal claim on a property used as security for a debt.

Loan Commitment

A written offer from a lender to provide financing to a borrower. The commitment letter states the terms under which the lender agrees to provide financing to the borrower. Also called a commitment letter.

Loan Estimate

Disclosure required within 3 days of loan application that lists all of the costs and fees associated with a particular loan scenario. The Loan Estimate replaces the Good Faith Estimate (GFE).

Loan-To-Value Ratio

A ratio used by lenders to calculate the loan amount requested as a percentage of the value of a home. To determine the loan to value ratio, divide the loan amount by the home's value. The LTV ratio is used to determine what loan types the borrower qualifies for as well as the cost and fees associated with obtaining the loan.

London Inter-Bank Offered Rates (LIBOR)

An index used to establish the interest rate of some adjustable rate mortgages (ARM). LIBOR is the London Inter-Bank Offered Rates. This is the interest rate at which the highest rated banks offer to lend to one another in eurodollars. LIBOR offers various maturities, including 1-month, 3-month, 6-month and 1-year, however, the 6-month index is most common for mortgages. LIBOR is quoted daily in the Wall Street Journal's Money Rates.

Margin

The number of percentage points a lender adds to the index value to calculate the ARM interest rate at each adjustment period.

Market Value

The price at which a property will sell, assuming a knowledgeable buyer and seller, both operating without undue pressure.

Merged Credit Report

A credit report that contains information from at least three credit repositories. Any duplicate entries are combined to provide a concise summary of a your credit.

Mortgage

A contract in which a borrower's property is pledged as security for a loan which is to be repaid on an installment basis.

Mortgage Insurance

Insurance provided by a private company to protect the mortgage lender against losses that might be incurred if a loan defaults. The borrower usually pays the cost of the insurance and is most often required if the loan amount is more than 80% of the home's value. Sometimes referred to as private mortgage insurance.

Mortgage Insurance Premium (MIP)

Amount paid by a borrower for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (PMI) company.

Mortgage Note

A written promise to pay a debt at a stated interest rate during a specified term. The agreement is secured by a mortgage.

Mortgagee

The lender in a mortgage contract.

Mortgagor

The borrower in a mortgage contract.

Negative Amortization

A loan in which the outstanding principal balance goes up instead of down because the monthly payments are not large enough to cover the full amount of interest due. Also called deferred interest.

No Cash Out Refinance

A refinance loan is an amount that pays off the existing mortgage balance on the property and does not provide the borrower with any cash at closing.

Non-Conforming Loan

A mortgage that exceeds the maximum loan amount for the most common mortgage investors. The cost of obtaining a non-conforming mortgage is generally higher than the cost of obtaining a conforming mortgage. Also known as a jumbo loan.

Note

The written agreement signed by the borrower at closing that contains the promise to repay the loan. The note also contains the terms of the loan, such as interest rate, payment, and term.

Note Rate

The interest rate stated on a mortgage note. Also called nominal rate or face interest rate

Notice of Default

Formal written notice to a borrower that a default on a loan has occurred and that legal action may be taken.

Obligee

A person or company whose favor an obligation is entered into.

Obligor

A person or company who has engaged to perform some obligation

Occupancy Rate

Percentage of currently rented units in a building, neighborhood, complex, or city.

Offer to Purchase

An agreement between a buyer and seller to purchase real estate. An offer to purchase, also known as a binder or a sales contract, 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 that was paid is forfeited unless the binder expressly provides that it is to be refunded.

Origination Fee

A fee charged for the work involved in the evaluation preparation and submission of a proposed mortgage loan.

Owner Financing

A purchase in which the seller provides all or part of the financing.

Periodic Payment Cap

On an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase during a single adjustment period.

Periodic Rate Cap

On an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase during a single adjustment period.

P&I

The monthly principal and interest payment required when repaying a mortgage in accordance with its terms.

PITI

(P)rincipal, (I)nterest, (T)axes, and (I)nsurance is a reference to the total monthly payment required to repay a mortgage in accordance with its term as well as monthly escrow payments for taxes and insurance.

Plat

A map of a piece of land showing boundary lines, streets, actual measurements and easements.

Points

Fees that are collected by the lender in exchange for a lower interest rate. Commonly called discount points, each point is equal to 1% of the loan amount. For our comparison purposes, a discount point is considered to be a lender fee. To determine if it is wise to pay discount points to obtain a lower rate, you must compare the up front cost of the points to the monthly savings that result from obtaining the lower rate.

Pre-Approval

A commitment by a lender to extend credit provided that specific conditions are met.

Pre-Qualification

A preliminary assessment of a buyer's ability to secure a loan, based on a specific set of lending guidelines and buyer representations made. This is not a guarantee or commitment by a lender to extend credit.

Prepayment Penalty

A charge paid to the lender by the borrower if a mortgage loan is repaid before its term is over.

Prime Rate

The interest rate charged by banks to their preferred corporate customers, it tends to be an estimator for general trends in short term interest rates.

Principal

The amount borrowed or remaining unpaid; also, that part of the monthly payment that reduces the outstanding balance of a mortgage.

Private Mortgage Insurance (PMI)

Insurance written by a private mortgage insurance company to protect the lender against losses caused by mortgage default. This is commonly required on loan transactions involving less than a 20% down payment or equity position.

Purchase Agreement

A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

Qualified Veteran

To officially determine if you are a qualified veteran, must request a Certificate of Eligibility (COE) from the VA. This certificate indicates that the VA has determined you are eligible for a VA home loan and shows the amount of available entitlement or guaranty. To obtain a certificate of eligibility, complete the “Request for a Certificate of Eligibility for VA Home Loan Benefits Form” (VA Form 26-1880) and submit it to the VA. This form, as well as additional information about VA home loan eligibility requirements, are available on the VA website (www.benefits.va.gov/HOMELOANS/).

Qualifying Ratios

Calculations performed by lenders to determine your ability to repay a loan. The first qualifying ratio is calculated by dividing the monthly PITI by the gross monthly income. The second ratio is calculated by dividing the monthly PITI and all other monthly debts by the gross monthly income.

Quitclaim Deed

A deed that transfers, without warranty, whatever interest or rights a grantor may have at the time the transfer is made. Often used to remove a possible cloud on the title.

Rate Change Cap

The maximum amount that an interest rate can change, either at an adjustment period or over the entire life of the loan. Commonly associated with an adjustable rate mortgage (ARM).

Real Estate Settlement Procedures Act (RESPA)

A consumer protection law that requires mortgage lenders and brokers to give borrowers advance notice of closing costs in the form of a Good Faith Estimate.

Realtor

A real estate broker or sales associate affiliated with the National Association of Realtors.

Recording Fee

A fee charged by the local government to record mortgage documents into the public record so that any interested party is aware that a lender has an interest in the property. For our comparison purposes, a recording fee is considered to be a tax or other unavoidable fee.

Refinancing

Repaying a debt with the proceeds of a new loan, using the same property as collateral or security.

Rehabilitation Mortgage

A loan granted to cover the costs of repairing or improving an existing property. Sometimes also used to acquire property with the intent to improve it.

Release Fee

The fee charged to release a lien to free real estate from a mortgage.

Right of First Refusal

A contract provision that requires a property owner to give another party the first opportunity to purchase or lease the property before it is offered to others.

Right of Ingress or Regress

The right to enter or leave specific property or premises.

Right of Survivorship

In joint tenancy, the right of surviving joint tenants to acquire the interest of a deceased joint tenant.

Rural Housing Service (RHS)

An agency within the United States Department of Agriculture that provides financing to farmers and other qualified borrowers buying property in rural areas, who are unable to obtain loans elsewhere.

Search and Exam Fee

A fee charged by a title company or attorney in some states to perform a check of the title records that verifies the buyer is purchasing a house from the legal owner and there are no liens, overdue assessments, or other claims filed that would adversely affect the transfer of the title. For our comparison purposes, a search and exam fee is considered to be a third party fee and may be included in the title insurance fee by some lenders.

Second Mortgage

A loan issued on property that is already encumbered by an existing mortgage (ie: the first mortgage). The second mortgage is subordinate to the first.

Secondary Mortgage Market

The market wherein home loans are sold by the lender after closing to Fannie Mae, Freddie Mac or a variety of other institutional investors.

Settlement or Closing Fee

A fee charged by a title company, closing agent or attorney to act as a representative and agent for the lender to perform the closing of a real estate transaction.

Subordinate Financing

Any mortgage or other lien that has a lower priority than that of the first mortgage.

Survey

A map prepared by an engineer or surveyor charting a particular piece of real estate.

Tenancy by the Entirety

Type of joint tenancy that provides the right of survivorship and is available only to a husband and wife. Compare with tenancy in common.

Tenancy in Common

Type of joint tenancy without the right of survivorship. Compare with tenancy by the entirety and with joint tenancy.

Title

Ownership of a property. A clear title is one without any outstanding liens or encumbrances. A cloud on title refers to any outstanding liens or encumbrances which could impair the title.

Title Insurance Policy

An insurance policy that protects the lender (and sometimes the property owner as well) against loss due to disputes over the ownership of a property and defects in the title that were not found in the search of the public record. For our comparison purposes, the title insurance cost is considered to be a third party fee.

Title Search

An examination of the public title records to determine the legal ownership of a property, and to ensure that there are no liens, encumbrances or other claims outstanding.

Third Party Fees

Third party fees are usually fees that the lender will collect and pass on to the person who actually performed the service. For example, an appraiser is paid the appraisal fee, a credit bureau is paid the credit report fee and a title company or an attorney is paid the title insurance fees.

Fees that we consider third party fees include the appraisal fee, the credit report fee, the settlement or closing fee, the survey fee, tax service fees, title insurance fees, flood certification fees, and courier/mailing fees.

Typically, you’ll see some minor variances in third party fees from lender to lender since a lender may have negotiated a special charge from a provider they use often or chooses a provider that offers nationwide coverage at a flat rate. You may also see that some lenders absorb minor third party fees such as the flood certification fee, the tax service fee or courier/mailing fees.

Total Debt Ratio

A standard calculation performed by mortgage lenders to determine if a borrower qualifies for a specific loan type. It is calculated by dividing the monthly housing expense (Principal, Interest, Taxes and Insurance plus all other monthly debt obligation) by the borrower's monthly gross income. Also referred to as a back end ratio or a bottom ratio.

Transfer Tax

In some areas city, county or state taxes imposed when property passes from one person to another.

Truth-In-Lending

Federal law that requires lenders to disclose the terms and conditions of a mortgage, including the APR, based on certain charges incurred by the borrower. If the charges were $0, the APR would be equal to that actual interest rate on the loan.

Underlying Mortgage

Generally refers to the first mortgage when there is a wraparound mortgage.

Underwriting

The process of evaluating a loan application to determine the risk involved for the lender.

Unsecured Loan

A loan that is not backed by collateral.

Underwriting Fee

A fee charged by some lenders to cover the cost of the lender's analysis of the risk associated with a loan. For our comparison purposes, an underwriting fee is considered to be a lender fee.

Undivided Interest

An ownership right to use and occupy property that is shared among more than one owner. No single co-owner may have exclusive rights or possession to any part of the property.

Uniform Commerical Code (UCC)

Group of laws that are applicable to commercial transactions. Only a few of the laws have relevance to real estate transactions.

Upfront Mortgage Insurance Premium

FHA charges the borrower an Upfront Mortgage Insurance Premium (Upfront MIP) for most transactions to financially support the FHA program. This fee is a percentage of the principal loan amount and is due at closing. The full amount can be financed as part of the loan amount or paid in cash.

VA Funding Fee

The Department of Veteran’s Affairs (VA) charges a Funding Fee to most veterans who obtain a VA mortgage loan to help sustain the VA home loan program. Only veterans receiving VA disability are exempt from paying this fee. The VA Funding Fee is a percentage of the principal loan amount and is due at closing. The amount of the VA Funding Fee varies depending on specifics of the transaction. The full amount can usually be financed as part of the loan amount or paid in cash.

VA Loan

A mortgage for veterans and service persons. The loan is guaranteed by the Department of Veterans Affairs (VA) and requires low or no down payment.

Vacancy Rate

The percentage of all units or space that is not leased, not rented or is unoccupied.

Vacant Land

Land that is not currently being used.

Vacation home

A property the borrower will occupy as a second home (vacation home) while maintaining a principle residence elsewhere. Must be a reasonable distance from the borrower’s principle residence (generally 50 miles or more) and cannot be rented out.

Valid

A document or contract that has legally binding force.

Vested

Having the right or privilege to use a portion of a fund, such as an individual retirement account (IRA).

Waiver

The voluntary abandonment or surrender of some claim, right, or privilege.

Warehousing

The packaging together of many mortgages for the purpose of selling them in the secondary market, usually by a mortgage banker who has originated the loans.

Warranty

A promise contained in a contract.

Water Table

Usually defined as the upper-most level at which underground water is normally encountered in a particular area.

Wire Transfer Fee

A fee charged by some lenders to cover the cost of wiring the mortgage funds to the appropriate parties, such as the title company or attorney, so that they are available for closing. For our comparison purposes, a wire transfer fee is considered to be a third party fee. However, some lenders may not charge for this service.

Wraparound Loan

A loan that includes the remaining balance on an underlying first loan. Instead of having separate first and second mortgages, a wraparound loan has both.

No terms found for this letter.

Yield

A measurement of the rate of earnings from an investment, usually expressed as a percentage.

Yield To Maturity (YTM)

The internal rate of return on an investment. Typically takes into account all investment returns and their timing.

Zone

A geographic area reserved and defined by local ordinance for specific limited use. Zones are almost always subject to certain restrictions or conditions.

Zoning

The local government's specifications for the use of property in certain areas.

Zoning map

A map of the local geographic area that defines current zoning designations and land use.

Zoning Ordinances

The acts of an authorized local government establishing building codes, and setting regulations for property usage.