Loan

Oct 27 2016

Mortgage Glossary – Mortgage Industry Terms for Home Buyers #perkins #student #loan

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Use our mortgage glossary to understand the most important lending and mortgage terms. Mortgages can be confusing for the first time home buyer, so let us help explain. Below you’ll find explanations for most of the mortgage industry terms.

Abstract of title

A summary of recorded transactions concerning a particular property.

Acceleration clause

Condition in a mortgage that gives the lender the right to require immediate repayment of the loan balance if regular mortgage payments are not made or for breach of other conditions of the mortgage.

Accrued interest

Interest earned but not yet paid.

Adjustable rate

Adjustable-rate mortgage (ARM)

Agent

One that acts for or represents another.

Agreement of sale

Also known as a “sales contract,” a written document in which a purchaser agrees to buy property under certain given conditions, and the seller agrees to sell under certain given conditions.

Alternative documentation

A method of documenting a loan file that relies on information the borrower is likely to be able to provide, instead of waiting on verification sent to third parties for confirmation of statements made in the application.

Amortization

A monthly repayment schedule in which a loan is repaid in fixed payments of principal and interest.

Annual percentage rate (APR)

The annual cost of a loan, expressed as a yearly rate. APR takes into account interest, discount points, lender fees and mortgage insurance, so it will be slightly higher than the interest rate on the loan.

Application

Often referred to as a 1003, an initial statement of personal and financial information required to approve your loan.

Application fee

A fee charged by a lender to cover initial costs of processing a loan application, often including charges for property appraisal and a credit report.

Appraisal

A written estimate of a property’s current market value, based on recent sales information for similar properties, the current condition of the property and how the neighborhood might affect future property value.

Appraisal fee

A fee charged by a licensed, certified appraiser to render an opinion of market value as of a specific date.

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