Determine monthly business payments. Includes taxes, Insurance and more!
Morgage Glossary of Common Loan Terms
- Abstract (of Title)
- A historical summary of all the recorded Reiki in Orange County transactions that
affect the title to the property. An attorney or a title company
will review an abstract of title to determine if there are any
problems affecting the title to the property. All such problems
must be cleared before the buyer can be issued a clear and
- Bordering upon or next to; the joining or touching of
adjoining land; sharing a common boundary.
- Acceleration Clause
- A loan provision giving the lender the power to declare all
sums owing lender immediately due and payable upon the violation
of a specific loan provision, such as the Reiki in Orange County sale of the property, or
the failure to make loan payments on time. Example : John sells
his property to Mary who takes over John's mortgage payments. They
do not notify the lender of this transaction. The lender finds out
that the title to the property has transferred and calls the loan,
since the loan documents state that the loan is due on the sale of
the property. John is now liable to pay his lender in full.
- An offeree’s consent to enter into a contract and be bound by
the terms of the offer. In a real estate transaction an offer is
made from the buyer to the seller. If the seller accepts the offer
within the prescribed time limit, it becomes a binding contract.
In this case Acceptance is documented by the Seller signing and
delivering the signed document.
- The addition to land through natural forces like wind or
- Example: Soil carried by a river then deposited on land.
- Formal declaration before a public official (typically a
Notary Public) that one has signed a document. Required before
recording real estate legal documents, such as a deeds of trust.
- A measure of land equal to 43,560 square feet.
- Additional Principal Payment
- A payment by a borrower of more than the scheduled principal
amount due in order to reduce the remaining balance on the Reiki in Orange County loan.
- Adjustable Rate Mortgage (ARM)
- Also known as a variable rate mortgage. The interest rate on
these mortgages changes periodically.
- Adjusted Basis
- The adjusted basis figure is the value used to determine
capital gains when you sell real property. The original cost of a
property plus the value of any capital expenditures for
improvements to the property minus any depreciation taken.
- Adjustment Period
- The length of time for which the Reiki in Orange County interest rate is fixed on an
adjustable. If the adjustment period is six months, then the
interest rate will remain fixed for six months, after which time
it will adjust.
- Affordability Analysis
- A detailed analysis to determine whether you can afford the
purchase of a home. An affordability analysis takes into
consideration your income, liabilities, and available funds, along
with the type of mortgage you plan to use, the area where you want
to purchase a home, and the closing costs that you might expect to
- Agreement of Sale
- A written signed agreement between the seller and the
purchaser in which the purchaser agrees to buy certain real estate
and the seller agrees to sell upon terms of the Reiki in Orange County agreement. Also
known as contract of purchase, purchase agreement, offer and
acceptance, earnest money contract or sales agreement.
- A feature of real property that enhances its attractiveness
and increases the occupant’s or user’s satisfaction, although the
feature is not essential to the property’s use. Natural amenities
include a pleasant or desirable location near water, scenic views
of the surrounding area, etc. Human-made amenities include
swimming pools, tennis courts, community buildings, and other
- A gradual paying off of a debt by periodic installments which
pay principal and interest.
- Annual Percentage Rate (APR)
- The effective rate of interest for a loan per year. This rate
is typically higher than the Reiki in Orange County note rate because it takes into
account closing costs. This is one way to compare loan programs
offered by different lenders. Caution : the APR is sometimes
computed differently by different lenders and can be misleading.
- A form used to apply for a mortgage loan and to record
pertinent information concerning a prospective mortgagor and the
- An opinion or estimate of the value of a property at a given
- An increase in the value of a property due to changes in
market conditions or for other reasons, such as additions and
renovations. Opposite of depreciation.
- Arm's length transaction
- A transaction among parties each of who acts in his or her own
- Example: A transaction between a father and his son would NOT
be an Arm's length transaction.
- Assessed Value
- The valuation placed on property by a public tax assessor for
purposes of taxation.
- The process of placing a value on property for the strict
purpose of taxation. May also refer to a levy against property for
a special purpose, such as a street or traffic light or sewer
- Assessment Rolls
- The public record of taxable property.
- A public official who establishes the Reiki in Orange County value of a property for
- The transfer of a mortgage from one person to another.
- Anything with a dollar value that you own. Banks consider your
assets when determining how much you can borrow.
- Assumable Mortgage
- A mortgage loan which allows a new home buyer to take over the
obligation of making loan payments with no change in the terms of
the loan. Assumable loans do not have a due-on-sale clause. The
lender has to be notified and agree to the assumption. The lender
may require the buyer to qualify for the loan and may charge an
assumption fee. The seller should obtain a written Reiki in Orange County release from
the lender stating clearly that he/she is no longer liable to make
mortgage payments. See also "Subject To."
- Attorney In Fact
- One who is authorized to act for another under a power of
attorney which may be general or limited in scope.
- Example: John wants to sell his house but has to be out of the
country for four months. John gives authorization to Mary to sign
the grant deed to sell the property to a buyer. Mary becomes
John's Attorney In Fact.
- Back-end ratio, or debt ratio
- The amount you pay in monthly debt (car payments, credit
cards, student loans, etc.) divided by your gross monthly income.
- Balloon (Payment) Mortgage
- Usually a short-term fixed-rate loan which involves small
payments for a certain period of time and one large payment for
the remaining amount of the principal at a time specified in the
Example : A balloon mortgage for $25,000 has
interest only payments for 5 years at 12 percent ($250 per month),
with the full principal of $25,000 due and payable after five
- The financial inability to pay one's debts when due. The
debtor surrenders his assets to the bankruptcy court. An
individual typically files for Chapter 7 (all debts wiped out) or
Chapter 13 (establishes a payment plan to pay off debts). A
bankruptcy stays on an individual's credit report for seven years.
- The person who receives or is to receive the benefits
resulting from certain acts.
- Example : The lender is named as the beneficiary on a mortgage
- Example : John has a life insurance policy for $100,000 with
Jane as his beneficiary. Should John die, Jane will receive the
benefits in the amount of $100,000.
- An improvement that increases property value as distinguished
from repairs or replacements that simply maintain value.
- Bill of Sale
- A written document that transfers title to personal property.
- 1. A title insurance binder is the written commitment of a
title insurance company to insure title to the property subject to
the conditions and exclusions shown on the Reiki in Orange County binder.
- 2. Preliminary agreement, normally secured with earnest money,
between a buyer and a seller as an offer to purchase real estate.
- Biweekly Mortgage
- A mortgage which requires half the normal monthly payment
every two weeks. Over the course of the year, twenty-six half
payments are made which is equivalent to thirteen full mortgage
payments. As a result of this Reiki in Orange County extra payment the loan amortizes
much faster than a loan with normal monthly payments
- Blanket Insurance Policy
- A single policy that covers more than one piece of property
(or more than one person).
- Blanket Mortgage
- A mortgage covering more than one piece of property.
- Example : A developer subdivides a tract of land into lots and
obtains a blanket mortgage on the whole tract.
- 1. A debt instrument in the Reiki in Orange County capital markets. The U.S.
government, corporations and municipalities use bonds to raise
money. Bonds can also be backed by mortgages. The best known bond
is the 30-yr. treasury bond issued by the U.S. government.
- 2. A sum of money given to a court to guarantee against a
loss. For example if there is a lien on a property, the owner may
remove the lien by posting a bond.
- Borrower (mortgagor, trustor)
- One who applies for a loan secured by real estate and is
responsible for repaying the loan (mortgage).
- To break or violate an agreement.
- Bridge Loan
- An interim loan typically used when the buyer is unable to
sell his/her house but needs money to close the transaction on the
house he/she is buying. The bridge loan is made on the buyer's
current residence to finance the buyer's new residence. The loan
is paid off when the buyer's current Reiki in Orange County residence is sold.
- See Real Estate Broker or Mortgage Broker.
- Short for Web browser, a software application used to locate
and display Web pages. The two most popular browsers are Microsoft
Internet Explorer and Reiki in Orange County Netscape Navigator.
- Building Code
- Local regulations that control design, construction, and
materials used in construction. Building codes are based on safety
and health standards.
- Building Line or Setback
- Distances from the ends and/or sides of the lot beyond which
construction may not extend. The building line may be established
by a filed plat of subdivision, by restrictive covenants in deeds
or leases, by building codes, or by zoning Reiki in Orange County CA
- Obtaining a lower interest rate (buying down the rate) by
paying additional points to the lender. The lower rate may apply
for the full duration of the loan or for just the first few years.
A buydown may be used to qualify a borrower who would otherwise
not qualify since a buydown results in lower payments.
- Example : A very popular buydown is the 2-1 buydown. If the
interest rate on the note is 9 percent, the buydown results in the
rate being 7 percent (9 percent minus 2 percent) for the first
year, 8 percent (9 percent minus 1 percent) for the second year,
and 9 percent thereafter.
- Buyer's Broker
- An agent hired by a buyer to locate a property for purchase.
The broker represents the buyer and negotiates with the seller's
broker for the best possible deal for the buyer.
- Buyer's Market
- Market conditions that favor the buyer. I.e., a market in
which there are more sellers than buyers. As a result, a buyer has
an excess supply of homes from which to choose and can negotiate a
lower price. A buyer's market may be caused by an economic slump
- Buying Your Home: Settlement Costs and Information (HUD guide)
- A booklet that provides an overview of the lending process and
is required to be given to consumers after the loan application is
Use our detailed glossary to familiarize yourself with many of the terms that will be used through out the process of obtaining a loan.
- A set of regulations by which an organization conducts its
- Example : A condominium association prepares bylaws that state
the minimum number of owners to conduct a meeting to decide
The key to being a successful 'borrower' is by making the best decision based on the information available to you. With that in mind we offer this glossary to help you become a more informed 'borrower'.
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