Amortization Schedule: A timetable of payments from the first through the last payment of a loan showing the amounts that are applied to interest and principal for each payment.
Appraisal: A professional opinion of a home’s market value in comparison to other homes that have sold within a defined time and distance to the home being evaluated.
Annual Percentage Rate (APR): APR is a broader measure of the cost of borrowing money. The APR reflects not only the interest rate but also the points, origination fees and other charges paid to obtain the loan. For that reason, your APR is usually higher than your interest rate.
Closing: An event where a buyer and seller come together and sign loan documents, pass keys and funds. The end result is the transferred ownership from seller to buyer.
Credit Union: A member owned financial cooperative, democratically controlled by its members, and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members.
Debt to Income ratio (DTI): A debt to income ratio is one way lenders measure an individual's ability to manage monthly payments and repay debts. DTI is calculated by dividing total recurring monthly debt by gross monthly income, and it is expressed as a percentage.
Depreciation: A decrease in the value of a property due to changes in market conditions, wear and tear or other factors.
Equity: The value of ownership built up in a home or property that represents the current market value of the home, less any remaining existing home loan balance(s).
Escrow Account: A special account set up by the lender for a borrower to collect and hold tax and insurance amounts monthly to pay annual property taxes and homeowner’s insurance when due. This is also known as an impound account.
Finance Charges: The dollar amount charged to obtain credit also referred to as the cost of credit which includes any interest and or costs.
For Sale By Owner (FSBO): A home that is offered for sale by the owner without the use of a real estate agent.
Installment Loan: A loan that is repaid over time with a set number of scheduled payments.
Interest: The cost of borrowing money.
Cash-Out Refinance: A loan refinancing transaction in which the new loan amount is greater than the existing loan amount, plus loan settlement costs. The purpose of a cash-out refinance is to extract equity from the borrower's home.
Housing Ratio: A ratio used to compare the maximum percentage of a borrower’s gross income that can be used to make the monthly mortgage payments, land or lot rent and taxes and home owners insurance.
HUD: An acronym for The Department of Housing and Urban Development, a governmental housing regulator. Manufactured housing is the only type of housing built to a national standard. A building code standard which was created by HUD for all manufactured homes constructed. Homes built after June of 1976 are given a HUD number to certify it meets those standards.
Loan Term: The length of time which a loan agreement is in force, and before or at the end of which the loan should be repaid or renegotiated.
Loan to Value (LTV): The ratio of the amount of your loan compared to value of the home.
Multi-Residential: A term used for the individuals who have ownership in more than one home or dwelling.
Mobile Home: A factory built home constructed before June 15, 1976 also commonly known as a pre-HUD home.
Multi-Section Home: A HUD code manufactured home that is comprised of multiple sections with a minimum of 20 feet or more in width and 90 feet or less in length.
Manufactured Home: A home built in a factory, on a permanent chassis, to the construction and safety standards known as the HUD code established June 15, 1976.
NADA: A guide to determine the valuation of automobiles and manufactured homes that is published annually by the National Automobile Dealers Association.
Origination Fee: A fee charged by lenders and mortgage brokers for submitting, processing and evaluating a purposed loan.
Rate and Term: The refinancing of an existing home loan to change the rate and or term without borrowing additional funds.
Regulation B: An amendment to the Equal Credit Opportunity Act (ECOA) which requires lenders to provide applicants free copies of all appraisals and other evaluations connected to an application for a loan secured by a first lien on a dwelling.
Revolving Account: A credit agreement that allows a borrower to pay off all or part of the outstanding balance on an account. As credit is paid off, it becomes available again for anther purchase or cash advance.
Second Home: Is a residence that an applicant intends to occupy in addition to a primary residence for part of the year. Typically, a second home is used as a vacation home, though it could also be a property that you visit on a regular basis, in a city where you frequently conduct business and is not rented out or occupied by other parties.
Servicing: The collection of payments and management of operational procedures related to a loan.
Signing: An event where the buyer and seller sign documents in the presence of a notary public and mail documents, as well as other required items, back to the lender. Possession and ownership remain unchanged until a later date.
Single-Section Home: A HUD code manufactured home that is 18 feet or less in width and 90 feet or less in length.
Title: A legal document establishing the right of ownership in a property.
Title Changes: The act of removing or adding an individual (s) to the title to the home. This is accomplished with a rate and term refinance.
Truth in Lending Statement: A document that discloses the terms and cost of a mortgage loan, including APR.
Underwriting: The process of evaluating a borrower’s finances and payment history in order to approve or deny a loan.