Vocabulary – Lesson 4
Ever wondered about mortgages, what they meant or all the terminology used, well I hope this helps…
1. Adjustable Rate Mortgage Loan (ARM)
– A residential mortgage that has an interest rate that is subject to change. Adjustment times are agreed upon at the inception of the loan.
2. Assumable Mortgage
– A mortgage which, by its terms, allows a new owner to take over its obligations.
3. Balloon Mortgage
– A mortgage that is amortized over a specific period of years, but requires a lump sum payment in full at an earlier date.
4. Extended Mortgage
– One in which the due date of a mortgage is extended for a longer period, often at a higher interest rate than the original mortgage.
5. Federal Housing Administration (FHA) Guarantee
– An insurance contract in which HUD, through FHA, insures that the named lender will recover specific percentage of the loan amount from the insurer (FHA) in the event that the loan goes bad.
6. Home Equity Conversion Mortgage
– A reverse or reverse annuity mortgage in which HUD, through FHA, guarantees that the borrower will receive monthly payments from the insurer (FHA) in the event the lender is unable to make payments to the borrower.
7. Mortgage Broker
– A person or company that buys and sells mortgages for another on commission or who arranges for and negotiates mortgage contracts.
8. Mortgage Insurance
– Insurance protecting against the nonpayment of, or default on, an individual mortgage or loan involved in a residential mortgage transaction. It protects the mortgage lender against loss incurred by a reason of nonpayment or mortgage default.
– The mortgage lender.
– The mortgage borrower.
11. Origination Fee
– The administrative fee charged by the lender to prepare loan documents, run credit checks, inspect and sometimes appraise a property. Usually computed as a percentage of the face value of the loan.
12. P.M.I. (Private Mortgage Insurance)
– An insurance contract which insures that the named lender will recover a specific percentage of the loan amount from the insurer in the event the loan goes bad. Many lenders require this on higher percentage loans.
– A one-time special fee or extra charge paid to a lender in order to secure a loan. Expressed as a percentage of the face amount of mortgage.
14. Reverse or Reverse Annuity Mortgage
– A mortgage for which the borrower pledges home equity in return for regular (monthly) payments, rather than a lump sum distribution of loan proceeds. Repayment is usually not required until the home is sold or the borrower’s estate is settled, provided the borrower continues to live in the home and keeps current on all taxes and insurance.
15. VA Guarantee
– An insurance contract in which the Veterans Administration (VA) insures that the names lender will recover a specific percentage of the loan amount from the insurer in the event the loan goes bad.
16. Variable Rate Mortgage
– A loan in which the interest rate fluctuates with the cost of funds or some other index.
Look for lesson 5 in the coming weeks!
Call us for any of your title needs or questions 239-415-6574!!
Posted on September 14, 2012, in Title and tagged Adjustable Rate Mortgage Loan, ARM, Assumable Mortgage, Balloon Mortgage, Extended Mortgage, Federal Housing Administration Guarantee, FHA, Fort Myers, Home Equity Conversion Mortgage, HUD, Jennifer Ferri, Lender, Mortgage, Mortgage Broker, Mortgage Insurance, Mortgagee, Origination Fee, P.M.I., Points, Private Mortgage Insurance, Property Guiding, Reverse Annuity Mortgage, Reverse Mortgage, Title Junction, Title Work, VA Guarantee, Variable Rate Mortgage. Bookmark the permalink. Leave a comment.