Acceptance
| | A buyer's or seller's agreement to enter into a contract and be bound by the terms of the offer. |
|
|
|
|
Annual Percentage Rate (APR)
| | The cost of a loan or other financing as a yearly rate. The APR includes the interest rate, points, broker fees and certain other credit charges a borrower is required to pay. It is usually higher than the advertised simple rate. The APR more accurately reflects what you will be paying and allows for ease in comparing different mortages based on actual costs. |
|
|
|
|
Application Fee
| | The fee that a mortgage lender or broker charges to apply for a mortgage to cover their processing costs. |
|
|
|
|
Appraisal
| | A professional analysis used to estimate the value of the property. The maximum amount of the mortgage is usually based on the appraisal. |
|
|
|
|
Assessed Value
| | Typically the value placed on property for the purpose of taxation. |
|
|
|
|
Balloon Mortgage
| | A mortgage with monthly payments often based on a 30-year amortization schedule, with the unpaid balance due in a lump sum payment at the end of a specific period of time (usually 5 or 7 years). The mort-gage may contain an option to “reset” the interest rate to the current market rate and to extend the due date if certain conditions are met. |
|
|
|
|
Bridge Loan
| | A short-term loan secured by the borrower’s current home (which is usually for sale) that allows the proceeds to be used for building or closing on a new house before the current home is sold. Also known as a “swing loan.” |
|
|
|
|
Broker
| | An individual or firm that acts as an agent between providers and users of products or services, such as a mortgage broker or real estate broker. |
|
|
|
|
Closing
| | The process of completing a financial transaction. For mortgage loans, the process of signing mortgage documents, disbursing funds, and, if applicable, transferring ownership of the property. In some jurisdictions, clos-ing is referred to as “escrow,” a process by which a buyer and seller deliver legal documents to a third party who completes the transaction in accordance with their instructions. |
|
|
|
|
Closing Agent
| | The person or entity that coordinates the various closing activities, including the preparation and recordation of closing documents and the disbursement of funds. (May be referred to as an escrow agent or settlement agent in some jurisdictions.) Typically, the closing is conducted by title companies, escrow companies or attorneys. |
|
|
|
|
Closing Costs
| | Expenses over and above the price of the property incurred by buyers and sellers in transferring ownership of a property. Generally includes a loan origination fee, title insurance, survey, attorney’s fee, and prepaid items, such as escrow deposits for taxes and insurance. Other fees may also be included. |
|
|
|
|
Closing Date
| | The date on which the sale of a property is to be finalized and a loan transaction completed. Often, a real estate sales professional coordinates the setting of this date with the buyer, the seller, the closing agent, and the lender. |
|
|
|
|
Closing Statement
| | Also referred to as “HUD-1 Settle-ment Statement.” A final listing of the closing costs of the mortgage transaction. It provides the sales price and down payment, as well as the total settlement costs required from the buyer and seller. |
|
|
|
|
Comparables (also known as "comps")
| | An abbreviation for "comparable properties"; used for a comparison in determining the current value of a property that is being appraised. |
|
|
|
|
Conventional Mortgage
| | A mortgage loan that is not insured or guaranteed by the federal government or one of its agencies, such as the Federal Housing Administration (FHA), the U.S. Depart-ment of Veterans Affairs (VA), or the Rural Housing Service (RHS). |
|
|
|
|
Credit Report
| | Information provided by a credit bureau that allows a lender or other business to examine your use of credit. It provides information on money that you’ve borrowed from credit institu-tions and your payment history. |
|
|
|
|
Credit Score
| | A numerical value that ranks a borrower’s credit risk at a given point in time based on a statistical eval-uation of information in the individual’s credit history that has been proven to be predictive of loan performance. |
|
|
|
|
