Mortgage Terms & Definitions

For some, it can be a daunting feeling when it becomes time to start the mortgage process.  There are many terms that can be used that wouldn’t be common to the average person.  Below is a list of these terms that one might encounter when going through the mortgage process.

mortgage term definitions property guiding

Financial Encumbrance:  This is simply a claim against a property by someone who is not the rightful owner of the property.  This is like a mortgage note, or a lien of another type (taxes, mechanics/contractors lien, judgments, etc.).  This claim gives them interest in your property in exchange for repayment of a debt.  Once satisfied, the lien is removed.

Reconvey:  This can be seen when the bank grants (grantor) the title of the property free and clear to the homeowner (grantee) by returning the deed. 

Easement:  This is simply a right-of-way to property, such as utility lines or a sidewalk.

Restrictions:  Can be public or private, and are very common with Homeowners Associations with condos or planned unit developments (PUD’s).

Encroachment:  This could be a fence or tree branches encroaching on to ones property.

Third Party:  Someone who is not directly involved in the interaction or relationship with the buyer or seller.  This can be any of the following: inspector, appraiser, title company (escrow agent) attorney closing agent, etc.

Constructive notice of title:  This is the legal presumption that anything recorded in the public record can be known by anyone who wants to know it.  These recorded financial items include, but are not limited to, mortgage, sale of property, taxes, subordinations of a mortgage, easements, lot description, date built, etc.  This information can be found on your local property appraiser website.

Amortization:  The movement of the loan balance (reduction of) by making monthly payments.  Full amortization means that the loan will mature when the balance is $0.00; while partial amortization means that the loan will mature when the loan balance is greater than $0.00.  This results in a final lump sum balance payment of principal called a balloon paymentNegative amortization means that the loan balance is moving upward (increasing); while regular amortization means that the loan balance is moving downward (decreasing).  Most loans today have a regular amortization schedule that fully amortizes.  These are the least risky loans to the consumer.

Not sure who to call or where to start?  Contact me today for a 100% free no-obligation loan inquiry analysis.

Matt Pell,  Loan Officer
Mortgage Warehouse, LLC
(239) 672-8502 – Direct Line
(239) 344-9223 – Fax
Company NMLS ID – 137154
Individual NMLS ID – 1018529
Better Business Bureau Rating = A+

Posted on June 10, 2013, in Finance and tagged , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 1 Comment.

  1. property credit union loans ireland

    Keane, I emailed earlier just before the HARP changes regarding refinanching
    my rental property. I had not heard back from Wells Fargo until today.
    I lived in the property at onee tiome and now am an “accidental” landlord.
    Wells Fargo cawlled me today and informed me with the new HARP requirements but
    explained I don’t qualify bc the property
    is not owner occupied. I owe $70k on a HELOC
    but Wells Fargo explained that wouldn’t be considered in mmy LTV with the refi.
    I aam current on all my payments but really will nedd to lock in a low curiosity rate bbc I’ve an adjustgable that is
    up in 5 years. What are my options since I do not live within the properry anymore (it can bbe bazcked my Freddie Mac)?
    I am so frustrated bbc I fall from thhe category you wrote about from the Wells Fargo section, Freddie Mac backed, rental property.

    Can I use one more loan provider?

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