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*First Multiple Listing
Service (FMLS)
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Service (MLS)
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Metro
Association of
Realtors
Realtors
*Most REO Networks/
Management
Companies
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list)
Service (FMLS)
*Multiple Listing
Service (MLS)
*Northeast Atlanta
Metro
Association of
Realtors
Realtors
*Most REO Networks/
Management
Companies
(call or write for the
list)
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REALTY PROFESSIONALS, INC.
Specialized Realty, Inc.
Specialized Realty, Inc.
Affiliations
Rusty Warner,
Realty Professionals
Specialized Realty
Realty Professionals
Specialized Realty
Adjustable Rate Mortgage
A mortgage in which the interest rate is adjusted according to a
pre-selected index
Amortization
Payment of a debt in regular, periodic installments of principal and
interest as opposed to interest only payments.
Annual Percentage Rate (APR)
A term used in the Truth-in-Lending Act to represent the percentage
relationship of the total finance charge to the amount of the loan.
The APR reflects the cost of your mortgage loan as a yearly rate. It
will be higher than the interest rate stated on the note because it
includes, in addition to the interest rate, loan discount points, fees
and mortgage insurance.
Application
A printed form used by a mortgage lender to record necessary
information concerning a prospective mortgage.
Application Fee
A sum of money paid towards estimated initial mortgage processing
expenses such as appraisal and credit report.
Appraisal
A report made by a qualified person setting forth an opinion or
estimate of property value. The term also refers to the process by
which this estimate is obtained.
As Separate Property
Ownership in real property which is to be specifically excluded from
community property.
Assessed Valuation
The value that a taxing authority places on real or personal property
for the purpose of taxation.
Assessment
A charge against a property for purpose of taxation. This may take
the form of a levy for a special purpose or a tax in which the
property owner pays a share of the cost of community
improvements according to the valuation of his or her property.
Borrower
A person (also known as mortgagor) who receives funds in the form
of a loan with an obligation to repay principal with interest.
Buydown
Money advanced by an individual (builder, seller, etc..) to reduce the
monthly payments for a home mortgage either during the entire
term or for an initial period of years.
Cash to Close
Liquid assets that are readily available to be used to pay the closing
costs involved in a closing of a mortgage transaction.
Closing
The consummation of a real estate transaction. The closing includes
the delivery of a deed, financial adjustments, the signing of notes,
and the disbursement of funds necessary to complete the sale and
loan transaction.
Closing Costs
Money paid by the borrower in connection with the closing of a
mortgage loan. This generally involves an origination fee, discount
points, appraisal, credit report, title insurance, attorney's fees,
survey, and pre-paid items such as tax and insurance escrow
payments.
Closing Statement
A form used at closing that gives an account of the funds received
and paid at the closing, including the escrow deposits for taxes,
hazard insurance, and mortgage insurance.
Co-Borrower
Additional borrower(s) whose income contributes to qualifying for a
loan and whose name(s) appears on documents with equal legal
obligations.
Collateral
Property pledged as security for a debt, such as the real estate
pledged as security for a mortgage.
Commitment (Loan)
A binding pledge made by the lender to the borrower to make a loan,
usually at a stated interest rate within a given period of time for a
given purpose, subject to the compliance of the borrower to stated
conditions.
Commitment Fee (Loan)
Any fee paid by a potential borrower to a lender for the lender's
promise to lend money at a specified rate and within a given time
period.
Commitment Letter
A formal offer by a lender stating the terms under which it agrees to
loan money to a home buyer.
Conforming Loan
Conventional home mortgages eligible for sale and delivery to either
the Federal National Mortgage Association (FNMA) or the Federal
Home Loan Mortgage Corporation (FHLMC). These agencies
generally purchase first mortgages up to loan amounts mandated by
Congressional directive.
Conventional Mortgage
A mortgage not obtained under a government insured program (such
as FHA or VA).
Credit Report
A report detailing an individual's credit history.
Deed of Trust
An instrument used in many states in place of a mortgage. Property
is transferred to a trustee by the borrower (trustor), in favor of the
lender (beneficiary) and reconveyed upon payment in full.
Default
The failure to perform an obligation as agreed in a contract.
Delinquency
A loan payment that is overdue but within the period allowed before
actual default is declared.
DeMinimus PUD
A PUD in which the common property has less than a 2% influence
upon the value of the premises. The 2% rule of thumb is calculated
by dividing the dollar amount of amenities by the total number of
units. Also see PUD.
Deposit
A sum of money given to bind a sale of real estate. Also known as
earnest money.
Depreciation
A loss of value in real property brought about by age, physical
deterioration, functional or economic obsolescence.
Discount Point
Amount payable to the lender institution by the borrower or seller to
increase the lender's effective yield. One point is equal to one
percent on the loan amount.
Discounted Loan
When the note rate on a loan is less than the market rate, the
lender requires additional points to raise the yield on the loan to the
market rate.
Earnest Money
A portion of the downpayment delivered with a purchase offer by the
purchaser of real estate to the seller or an escrow agency by the
purchaser of real estate with a purchase offer as evidence of good
faith. Also known as a deposit.
Equal Credit Opportunity Act (ECOA)
A Federal law requiring lenders and other creditors to make credit
equally available without discrimination based on race, color,
religion, national origin, sex, age, marital status, receipt of income
from public assistance programs or past exercising of rights under
the Consumer Credit Protection Act.
Equity
The ownership interest; i.e. portion of a property's value over and
above the liens against it.
Escrow
A procedure whereby a disinterested third party handles legal
documents and funds on behalf of a seller and buyer.
Fair Credit Reporting Act (FCRA)
A federal law which requires a lender who is rejecting a loan request
because of adverse credit information to inform the borrower of the
source of such information. This law also requires consumer
reporting agencies to exercise fairness, confidentiality and accuracy
in preparing and disclosing credit information.
Federal Home Loan Mortgage Corporation - FHLMC (FREDDIE
MAC)
A quasi-governmental agency that purchases conventional
mortgages in the secondary mortgage market from insured
depository institutions and HUD-approved mortgage bankers. It
sells participation sales certificates secured by pools of
conventional mortgage loans, their principal, and interest guaranteed
by the federal government through the FHLMC. It also sells
Government National Mortgage Association bonds to raise funds to
finance the purchase of mortgages. Popularly know as Freddie Mac.
Federal National Mortgage Association - FNMA (FANNIE MAE)
A taxpaying corporation created by Congress to support the
secondary mortgage market. It purchases and sells residential
mortgages insured by the Federal Housing Administration (FHA) or
guaranteed by the Veterans Administration (VA) as well as
conventional home mortgages.
First Mortgage
A real estate loan that has priority over any subsequently recorded
mortgages.
Fixed Interest Rate
An interest rate which does not change during the loan term.
Foreclosure
A legal procedure in which property mortgaged as security for a loan
is sold to pay the defaulting borrower's debt.
Gift Letter
A written explanation signed by the individual giving the gift stating,
"This is a bona fide gift and there is no obligation expressed or
implied to repay this sum at any time."
Gross Monthly Income
Total monthly income earned before tax and other deductions.
Hazard Insurance
A contract whereby an insurer, for a premium, undertakes to
compensate the insured for loss on a specific property due to
certain hazards (i.e. fire). Back to top
High-Ratio Loan
Mortgage loans in excess of 80 percent of the loan amount divided
by the lower of the sales price or appraised value.
Homeowners' Association Dues
The fees imposed by a condominium or homeowners' association for
maintenance of common areas.
Insured Loans
A loan insured by HUD-FHA or a private mortgage insurance
company.
Interest
Consideration in the form of money paid for the use of money. Also
a right, share or title in property.
Interest rate
The percentage of an amount of money which is paid for its use for
a specified time.
Investment Property
Real estate owned with the intent of supplementing income and not
intended for owner occupancy.
Lien
A legal claim or attachment against property as security for
payment of an obligation.
Loan-To-Value Ratio
The ratio between the amount of a given mortgage loan and the
lower of sales price of appraised value.
Market Value
The most probable price which a ready, willing and able buyer would
pay and a willing seller will accept, both being fully informed under no
pressure to act. The market value may be different from the price a
property can actually be sold for at a given time (market price).
Maturity
The termination or due date on which final payment on a loan must
be paid in full.
Monthly Payment
Usually, the amount of PITI (principal, interest, taxes, and
insurance) paid each month on a mortgage loan.
Mortgage
The conveyance of an interest in real property given as security for
the payment of a loan.
Mortgagee
The lender on a mortgage transaction.
Mortgage Insurance Premium (MIP)
The consideration paid by a mortgagor (borrower) for mortgage
insurance - either to the FHA or to a private mortgage insurer.
Mortgage Note
A written promise to pay a sum of money at a stated interest rate
during a specified term. The note contains a complete description of
the conditions under which the loan is to be repaid and when it is
due. Mortgagor
The borrower in a mortgage transaction who pledges property as
security for a debt.
Non-Conforming Loan
Conventional home mortgages not eligible for sale and delivery to
either FNMA or FHLMC because of various reasons, including loan
amount, loan characteristics or underwriting guidelines.
Occupancy
The use of a property as a full-time residence, either by the title
holder (owner-occupancy) or by another party through a formal
agreement (rental).
Origination Fee
The amount charged for services performed by the company
handling the initial application and processing of the loan.
Percentage Point
One percent of the loan or a measure of the interest rate.
PITI (Principal, Interest, Taxes, and Insurance)
The most common components of a monthly mortgage payment.
Preliminary Title Report
The results of a title search by a title company prior to issuing a title
binder or commitment to insure clear title.
Primary Residence
A residence which the borrower intends to occupy as the principal
residence.
Principal Balance
The remaining balance due on a debt, exclusive of accrued interest.
Private Mortgage Insurance Insurance written by a private company
protecting the mortgage lender against loss resulting from a
mortgage default.
Processing
The preparation of a mortgage loan application and supporting
documentation for consideration by a lender or insurer.
PUD (Planned Unit Development)
A planned combination of diverse land uses, such as housing,
recreation, and shopping in one contained development or
subdivision. A major feature of a PUD includes areas of common
land for use by the housing unit owners; the association of unit
owners generally owns, pays fees, and maintains the common
areas. Also see DiMinimus PUD.
Purchase Contract (Agreement/Offer)
An agreement between a buyer and seller of real property, setting
forth the price and terms of the sale. Also known as a sales
contract.
Rate Lock Option
An agreement guaranteeing an individual a specified interest rate on
a loan provided the loan is closed within a set period of time.
Real Assets
Real estate or real property owned by an individual of business.
Real Estate Settlement Procedures Act (RESPA)
A federal law requiring lenders to provide home mortgage borrowers
with information on known or estimated settlement costs. It also
establishes guidelines for escrow account balances.
Real Property
Land and that which is affixed to it.
Refinancing
The repayment of a debt from the proceeds of a new loan using the
same property as security.
Satisfaction of Mortgage
The recordable instrument issued by the lender verifying full
payment of a mortgage debt.
Second Home (Vacation Home, Weekend Home)
A residence other than the borrower's primary residence which the
borrower intends to occupy for a portion of each year. Must be
suitable for year-round occupancy.
Secondary Mortgage Market
A market where existing mortgages are bought and sold. It contrasts
with the primary mortgage market where mortgages are originated.
Security
In lending, the collateral given, deposited, or pledged to secure the
payment of a debt.
Settlement Services
Services provided by the lender at the closing of a loan.
Survey
The measurement and description of land by a registered surveyor.
Term
The time limit within which a loan must be repaid.
Title
The legal evidence of ownership rights to real property.
Title Insurance Policy
A contract in which an insurer, usually a title insurance company,
agrees to pay the insured party a specific amount for any loss
caused by defects of title on real estate in which the insured has an
interest as purchaser, mortgagee, or otherwise.
Title Search
An examination of public records to disclose the past and current
facts regarding the ownership of a given piece of real estate.
Truth-in-Lending Act
A Federal law requiring full disclosure of credit terms using a
standard format. This is intended to facilitate comparisons between
the lending terms and financial institutions.
Underwriting
Analysis of risk and setting of an appropriate rate and terms for a
mortgage on a given property for given borrowers.
Zero Point Option
An option which allows the borrower to opt to pay a slightly higher
loan interest rate in lieu of paying the loan origination points
generally charged for the particular loan product.
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