California Mortgage & Home Loan Rates Online
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is a period of time between changes in either the interest rate and/or
the monthly payment. The interest rate on most ARMs may change after one,
three, or five years, although other adjustment intervals may be negotiated
adjustable rate mortgage loan (ARM)
A California mortgage loan that changes interest rate periodically based
upon the changes in a specified index.
The date on which the interest rate changes
for an adjustable-rate California mortgage loan (ARM).
period The period that elapses between the adjustment dates for an
adjustable-rate California mortgage loan (ARM). amortization The repayment
of a California mortgage loan loan by installments with regular payments
to cover the principal and interest.
A feature that enhances a property's 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 desirable location
near water and scenic views of the surrounding area.
A repayment method in which the amount you borrow is repaid gradually
through regular monthly payments of principal and interest for a predetermined
length of time. During the first few years, most of each payment is applied
toward the interest owed. During the final years of the loan, payment
amounts are applied almost exclusively to the remaining principal.
amortization schedule A timetable for payment of a mortgage loan.
An amortization schedule shows the amount of each payment applied to interest
and principal and shows the remaining balance after each payment is made.
amortization term The amount of time required to pay off the mortgage
loan. The amortization term is expressed as a number of months. For example,
for a 30-year fixed-rate mortgage, the amortization term is 360 months.
amortize To repay a mortgage with regular payments of both principal
The limit on the amount an adjustable rate mortgage's interest rate can
change over a 12-month period. An annual cap prevents your payments from
changing too dramatically, even if the factors that determine changes
in an adjustable mortgage's rate rise or fall sharply during that period.
annual percentage rate (APR) The cost of a California mortgage
loan stated as a yearly rate; includes such items as interest, California
mortgage loan insurance, and loan origination fee (points).
application A form, commonly referred to as a 1003 form, used to
apply for a California mortgage loan and to provide information regarding
a prospective mortgagor and the proposed security.
fee Fees that are paid upon application. An application fee may frequently
include charges for property appraisal and a credit report.
appraisal A written analysis of the estimated value of a property
prepared by a qualified appraiser.
value An opinion of a property's fair market value, based on an appraiser's
knowledge, experience, and analysis of the property.
appraiser A person qualified by education, training, and
experience to estimate the value of real property and personal property.
appreciation An increase in the value of a property due to changes
in market conditions or other causes. The opposite of depreciation.
value The valuation placed on property by a public tax assessor for
the purposes of taxation.
The process of placing a value on property for the purpose of taxation.
A public official who establishes the value of a property for taxation
asset Anything of monetary value that is owned by a person. Assets
include real property, personal property, and enforceable claims
against others (including bank accounts, stocks, mutual funds, and so
assignment The transfer of a mortgage loan from one person to another.
assumable mortgage loan A mortgage loan that can be taken
over ("assumed") by the buyer when a home is sold.
assumption The transfer of the seller's existing mortgage loan
to the buyer.
assumption clause A provision in an assumable California mortgage
loan that allows a buyer to assume responsibility for the California mortgage
loan from the seller. The loan does not need to be paid in full
by the original borrower upon sale or transfer of the property.
assumption fee The fee paid to a lender (usually by the purchaser
of real property) resulting from the assumption of an existing California
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balance sheet A financial statement that shows assets, liabilities,
and net worth as of a specific date.
balloon mortgage loan A mortgage loan that has level monthly payments
that will amortize it over a stated term but that provides for a lump
sum payment to be due at the end of an earlier specified term.
balloon payment The final lump sum payment that is made at the
maturity date of a balloon California mortgage loan.
bankrupt A person, firm, or corporation that, through a court proceeding,
is relieved from the payment of all debts after the surrender of
all assets to a court-appointed trustee.
bankruptcy A proceeding in a federal court in which a debtor who
owes more than his or her assets can relieve the debts by transferring
his or her assets to a trustee.
before-tax income Income before taxes are deducted.
beneficiary The person designated to receive the income from
a trust, estate, or a deed of trust.
binder A preliminary agreement, secured by the payment of an earnest
money deposit, under which a buyer offers to purchase real estate.
biweekly payment mortgage loan A mortgage loan that requires payments
to reduce the debt every two weeks (instead of the standard monthly payment
schedule). The 26 (or possibly 27) biweekly payments are each equal to
one-half of the monthly payment that would be required if the loan were
a standard 30-year fixed-rate California mortgage loan, and they are usually
drafted from the borrower's bank account. The result for the borrower
is a substantial savings in interest.
blanket mortgage loan The California mortgage loan that is secured
by a cooperative project, as opposed to the share loans on individual
units within the project.
bond An interest-bearing certificate of debt with a maturity date.
An obligation of a government or business corporation. A real estate
bond is a written obligation usually secured by a California mortgage
loan or a deed of trust.
The individual applying for or receiving a loan or line of credit
breach A violation of any legal obligation.
bridge loan A form of second trust that is collateralized
by the borrower's present home (which is usually for sale) in a
manner that allows the proceeds to be used for closing on a new
house before the present home is sold. Also known as "swing
broker A person who, for a commission or a fee, brings parties
together and assists in negotiating contracts between them.
buydown mortgage loan A temporary buydown is a California mortgage
loan on which an initial lump sum payment is made by any party to reduce
a borrower's monthly payments during the first few years of a California
mortgage loan. A permanent buydown reduces the interest rate over the
entire life of a California mortgage loan.
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call option A provision in the California mortgage loan that gives
the California mortgage loane the right to call the California mortgage
loan due and payable at the end of a specified period for whatever reason.
cap A provision of an adjustable-rate California mortgage loan
(ARM) that limits how much the interest rate or California mortgage loan
payments may increase or decrease.
capital improvement Any structure or component erected as
a permanent improvement to real property that adds to its value and useful
cash-out refinance A refinance transaction in which the amount
of money received from the new loan exceeds the total of the money needed
to repay the existing first California mortgage loan, closing costs, points,
and the amount required to satisfy any outstanding subordinate California
mortgage loan liens. In other words, a refinance transaction in
which the borrower receives additional cash that can be used for
certificate of eligibility A document issued by the federal
government certifying a veteran's eligibility for a Department of Veterans
Affairs (VA) California mortgage loan.
certificate of reasonable value (CRV) A document issued by the
Department of Veterans Affairs (VA) that establishes the maximum
value and loan amount for a VA California mortgage loan.
certificate of title A statement provided by an abstract company,
title company, or attorney stating that the title to real estate is legally
held by the current owner.
chain of title The history of all of the documents that transfer
title to a parcel of real property, starting with the earliest existing
document and ending with the most recent.
change frequency The frequency (in months) of payment and/or interest
rate changes in an adjustable-rate California mortgage loan (ARM).
clear title A title that is free of liens or legal questions as
to ownership of the property. closing A meeting at which a sale of
a property is finalized by the buyer signing the California mortgage loan
documents and paying closing costs. Also called "settlement."
A meeting at which the buyer finalizes a sale of a property signing the
mortgage documents and paying closing costs.
closing costs Expenses (over and above the price of the property)
incurred by buyers and sellers in transferring ownership of a property.
Closing costs normally include an origination fee, an attorney's fee,
taxes, an amount placed in escrow, and charges for obtaining title insurance
and a survey. Closing costs percentage will vary according to the area
of the country. Closing statement Also referred to as the HUD1. The final
statement of costs incurred to close on a loan or to purchase a home.
cost item A fee or amount that a home buyer must pay at closing
for a single service, tax, or product. Closing costs are made up
of individual closing cost items such as origination fees and attorney's
fees. Many closing cost items are included as numbered items on the HUD-1
Lenders need to know when you expect or would like to complete the final
procedures your new house, in which documents are executed and the sale
is completed. 45-60 days is most common. You can always discuss changing
this date with your lending institution.
The final statement of costs necessary to close on a loan listing both
buyer and seller fees, if applicable. This is also referred to as the
on title Any conditions revealed by a title search that adversely
affect the title to real estate. Usually clouds on title cannot be removed
except by a quitclaim deed, release, or court action.
collateral An asset (such as a car or a home) that guarantees
the repayment of a loan. The borrower risks losing the asset if the loan
is not repaid according to the terms of the loan contract. Collection
The efforts used to bring a delinquent California mortgage loan current
and to file the necessary notices to proceed with foreclosure when
An individual who enters into an agreement along with the borrower. The
co-borrower is responsible if the borrower should default on the loan.
co-maker A person who signs a promissory note along with the
borrower. A co-maker's signature guarantees that the loan will be repaid,
because the borrower and the co-maker are equally responsible for the
repayment. See endorser.
commission The fee charged by a broker or agent for negotiating
a real estate or loan transaction. A commission is generally a percentage
of the price of the property or loan.
commitment letter A formal offer by a lender stating the
terms under which it agrees to lend money to a home buyer. Also known
as a "loan commitment."
common areas Those portions of a building, land, and amenities
owned (or managed) by a planned unit development (PUD) or condominium
project's homeowners' association (or a cooperative project's cooperative
corporation) that are used by all of the unit owners, who share in the
common expenses of their operation and maintenance. Common areas include
swimming pools, tennis courts, and other recreational facilities, as well
as common corridors of buildings, parking areas, means of ingress and
community home improvement mortgage loan An alternative financing
option that allows low- and moderate-income home buyers to obtain
95 percent financing for the purchase and improvement of a home in need
of modest repairs. The repair work can account for as much as 30
percent of the appraised value.
community property In some western and southwestern states,
a form of ownership under which property acquired during a marriage is
presumed to be owned jointly unless acquired as separate property of either
comparables An abbreviation for "comparable properties";
used for comparative purposes in the appraisal process. Comparables
are properties like the property under consideration; they have reasonably
the same size, location , and amenities and have recently been sold.
Comparables help the appraiser determine the approximate fair market
value of the subject property.
interest Interest paid on the original principal balance and on the
accrued and unpaid interest.
A real estate project in which each unit owner has title to a unit
in a building, an undivided interest in the common areas of the project,
and sometimes the exclusive use of certain limited common areas.
condominium conversion Changing the ownership of an existing building
(usually a rental project) to the condominium form of ownership.
loan Generally, a mortgage loan under $240,000. Qualifying ratios
and underwriting methods are standardized to a large degree with this
type of loan.
loan A short-term, interim loan for financing the cost of construction.
The lender makes payments to the builder at periodic intervals as the
consumer reporting agency (or bureau) An organization that prepares
reports that are used by lenders to determine a potential borrower's credit
history. The agency obtains data for these reports from a credit repository
as well as from other sources.
contingency A condition that must be met before a contract is legally
binding. For example, home purchasers often include a contingency
that specifies that the contract is not binding until the purchaser obtains
a satisfactory home inspection report from a qualified home inspector.
contract An oral or written agreement to do or not to do
a certain thing. Conventional California mortgage loan A California mortgage
loan that is not insured or guaranteed by the federal government.
of sale The agreement between the buyer and seller on the purchase
price, terms, and conditions necessary to both parties to convey the title
to the buyer.
mortgage A mortgage that is not insured or guaranteed by the federal
clause A provision in some adjustable-rate California mortgage
loans (ARMs) that allows the borrower to change the ARM to a fixed-rate
California mortgage loan at specified timeframes after loan origination.
convertible ARM An adjustable-rate California mortgage loan (ARM)
that can be converted to a fixed-rate California mortgage loan under
cooperative (co-op) A type of multiple ownership in which
the residents of a multiunit housing complex own shares in the cooperative
corporation that owns the property, giving each resident the right to
occupy a specific apartment or unit.
corporate relocation Arrangements under which an employer moves
an employee to another area as part of the employer's normal course of
business or under which it transfers a substantial part or all of its
operations and employees to another area because it is relocating its
headquarters or expanding its office capacity.
cost of funds index (COFI) An index that is used to determine
interest rate changes for certain adjustable-rate California mortgage
loan (ARM) plans. It represents the weighted-average cost of savings,
borrowings, and advances of the 11th District members of the Federal
Home Loan Bank of San Francisco.
Cost associated with transporting closing documents to the closing agent.
This fee may also include the cost of forwarding and/or obtaining other
documents necessary to complete the preparation of your mortgage documents.
A clause in a California mortgage loan that obligates or restricts the
borrower and that, if violated, can result in foreclosure.
credit An agreement in which a borrower receives something
of value in exchange for a promise to repay the lender at a later date.
credit history A record of an individual's open and fully repaid
debts. A credit history helps a lender to determine whether a potential
borrower has a history of repaying debts in a timely manner.
insurance A type of insurance often bought by the borrower because
it will pay off the mortgage debt if the borrower dies while the policy
is in force.
The maximum amount that you can borrow.
report A report of an individual's credit history prepared by a credit
bureau and used by a lender in determining a loan applicant's creditworthiness.
See merged credit report.
credit repository An organization that gathers, records, updates,
and stores financial and public records information about the payment
records of individuals who are being considered for credit.
A person to whom money is owed.
creditor chargeoffs A term generally used in accounting that indicates
the creditor does not expect to successfully collect the balance owed
on an account
judgements A decision by a court of law relative to an action or suit.
debt An amount owed to another. deed The legal document conveying
title to a property.
The legal document conveying title to a property.
A deed given by a mortgagor to the California mortgage loane
to satisfy a debt and avoid foreclosure.
deed of trust The document used in some states instead of a California
mortgage loan; title is conveyed to a trustee.
default Failure to make California mortgage loan payments on a
timely basis or to comply with other requirements of a California
delinquency Failure to make California mortgage loan payments when
California mortgage loan payments are due.
deposit A sum of money given to bind the sale of real estate,
or a sum of money given to ensure payment or an advance of funds
in the processing of a loan.
depreciation A decline in the value of property; the opposite of
down payment The part of the purchase price of a property
that the buyer pays in cash and does not finance with a California mortgage
due-on-sale provision A provision in a California mortgage loan
that allows the lender to demand repayment in full if the borrower sells
the property that serves as security for the California mortgage
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earnest money deposit A deposit made by the potential home buyer to
show that he or she is serious about buying the house.
easement A right of way giving persons other than the owner
access to or over a property.
effective age An appraiser's estimate of the physical condition
of a building. The actual age of a building may be shorter or longer than
its effective age.
effective gross income Normal annual income including overtime
that is regular or guaranteed. The income may be from more than one source.
Salary is generally the principal source, but other income may qualify
if it is significant and stable.
encumbrance Anything that affects or limits the fee simple
title to a property, such as California mortgage loans, leases,
easements, or restrictions.
endorser A person who signs ownership interest over to another
party. Contrast with co-maker.
Equal Credit Opportunity Act (ECOA) A federal law that requires
lenders and other creditors to make credit equally available without
discrimination based on race, color, religion, national origin, age, sex,
marital status, or receipt of income from public assistance programs.
equity A homeowner's financial interest in a property. Equity is
the difference between the fair market value of the property and the amount
still owed on its California mortgage loan.
escrow An item of value, money, or documents deposited with a third
party to be delivered upon the fulfillment of a condition. For example,
the deposit by a borrower with the lender of funds to pay taxes
and insurance premiums when they become due, or the deposit of funds or
documents with an attorney or escrow agent to be disbursed upon the closing
of a sale of real estate.
escrow account The account in which a California mortgage loan
servicer holds the borrower's escrow payments prior to paying property
escrow analysis The periodic examination of escrow accounts to
determine if current monthly deposits will provide sufficient funds to
pay taxes, insurance, and other bills when due.
escrow collections Funds collected by the servicer and set
aside in an escrow account to pay the borrower's property taxes, California
mortgage loan insurance, and hazard insurance.
escrow disbursements The use of escrow funds to pay real estate
taxes, hazard insurance, California mortgage loan insurance, and other
property expenses as they become due.
escrow payment The portion of a mortgagor's monthly payment
that is held by the servicer to pay for taxes, hazard insurance, California
mortgage loan insurance, lease payments, and other items as they become
due. Known as "impounds" or "reserves" in some states.
estate The ownership interest of an individual in real property.
The sum total of all the real property and personal property owned
by an individual at time of death.
eviction The lawful expulsion of an occupant from real property.
examination of title The report on the title of a property from the public
records or an abstract of the title.
listing A written contract between a property owner and a Real Estate
broker, whereby the owner promises to pay a fee or commission to the broker
if certain real property of the owner is sold during a stated period,
regardless of whether the broker is or is not the cause of the sale.
Fair Credit Reporting Act A consumer protection law that regulates
the disclosure of consumer credit reports by consumer/credit reporting
agencies and establishes procedures for correcting mistakes on one's credit
fair market value The highest price that a buyer, willing but not
compelled to buy, would pay, and the lowest a seller, willing but
not compelled to sell, would accept.
Federal Housing Administration (FHA) An agency of the U.S. Department
of Housing and Urban Development (HUD). Its main activity is the
insuring of residential California mortgage loan loans made by private
lenders. The FHA sets standards for construction and underwriting
but does not lend money or plan or construct housing.
fee simple The greatest possible interest a person can have
in real estate.
FHA mortgage loan A mortgage loan that is insured by the Federal
Housing Administration (FHA). Also known as a government California mortgage
finder's fee A fee or commission paid to a California mortgage
loan broker for finding a California mortgage loan loan for a prospective
first California mortgage loan A California mortgage loan that
is the primary lien against a property.
The monthly payment due on a mortgage loan. The fixed installment includes
payment of both principal and interest.
mortgage loan (FRM) A mortgage loan in which the interest rate does
not change during the entire term of the loan.
fee This is a fee to obtain documentation that indicates whether or
not a property is in a federally-designated flood zone, and whether or
not flood insurance is required for that property.
insurance Insurance that compensates for physical property damage
resulting from flooding. It is required for properties located in federally
designated flood areas.
foreclosure The legal process by which a borrower in default under
a California mortgage loan is deprived of his or her interest in
the California mortgage loan property. This usually involves a forced
sale of the property at public auction with the proceeds of the
sale being applied to the California mortgage loan debt.
The loss of money, property, rights, or privileges due to a breach of
A legal requirement that says a person selling a home must inform a potential
buyer of everything they know about the home's physical and economic condition.
amortized ARM An adjustable-rate mortgage loan (ARM) with a monthly
payment that is sufficient to amortize the remaining balance, at the interest
accrual rate, over the amortization term.
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letter The form stating that a relative is giving you money to help
you buy a home, and that they will not ask you to it pay back. The letter
also provides proof, by referring to bank statements and other records,
that the relative does in fact, have enough money to cover the amount
of the gift, and that the money has been transferred to your possession.
faith estimate An estimate of charges which a borrower is likely to
incur in connection with a settlement.
The period of time past the due date for a payment during which time the
payment may be made and not considered delinquent.
The person to whom an interest in real property is conveyed, generally
The person conveying an interest in real property, generally the buyer.
For qualifying purposes, the income of the borrower before taxes
or expenses are deducted.
mortgage A mortgage that is guaranteed by a third party.
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hazard insurance Insurance protecting against loss to real estate
caused by fire, some natural causes, vandalism, etc., depending
upon the terms of the policy.
conversion mortgage A special type of mortgage that enables older
home owners to convert the equity they have in their homes into cash,
using a variety of payment options to address their specific financial
needs. Unlike traditional home equity loans, a borrower does not qualify
based on income, but on the value of his or her home. In addition, the
loan does not have to be repaid until the borrower no longer occupies
home inspection A thorough inspection that evaluates the structural
and mechanical condition of a property. A satisfactory home inspection
is often included as a contingency by the purchaser.
homeowners' association A nonprofit association that manages the
common areas of a planned unit development (PUD) or condominium project.
In a condominium project, it has no ownership interest in the common elements.
In a PUD project, it holds title to the common elements.
homeowner's insurance An insurance policy that combines personal
liability insurance and hazard insurance coverage for a dwelling and its
homeowner's warranty A type of insurance that covers repairs to
specified parts of a house for a specific period. It is provided by the
builder or property seller as a condition of the sale.
housing expense ratio The percentage of gross monthly income that
goes toward paying housing expenses.
HUD The U.S. Department of Housing and Urban Development.
HUD-1 A standard form, which itemizes the closing costs, associated
with the purchase or the refinance of a one-to-four family residential
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A number, usually a percentage, upon which future interest rates for adjustable
rate mortgages are based. Some commonly used indexes include the 1-Year
Treasury Bill, 6 Month LIBOR, and the 11th District Cost of Funds (COFI).
report An objective account, normally computer-generated, of credit
and legal information obtained from a credit repository.
An increase in the amount of money or credit available in relation to
the amount of goods or services available, which causes an increase in
the general price level of goods and services. Over time, inflation reduces
the purchasing power of a dollar, making it worth less.
rate The original interest rate of the mortgage at the time of closing.
This rate changes for an adjustable-rate mortgage (ARM).
The regular periodic payment that a borrower agrees to make to a lender.
loan Borrowed money that is repaid in equal payments, known as installments.
An auto loan is often paid for as an installment loan.
A contract that provides compensation for specific losses in exchange
for a periodic payment. An individual contract is known as an insurance
policy, and the periodic payment is known as an insurance premium.
The amount of money a lender charges you to borrow money. The interest
you pay is a percentage of your total loan, and is paid over time.
accrual rate The percentage rate at which interest accrues on the
mortgage. In most cases, it is also the rate used to calculate the monthly
payments, although it is not used for an adjustable-rate mortgage (ARM)
with payment change limitations.
adjustment or prepaid interest An estimated amount of interest due
at closing, usually from the date of closing to the end of the month.
rate The periodic charge, expressed as a percentage, for use of credit.
rate ceiling For an adjustable-rate mortgage (ARM), the maximum interest
rate, as specified in the mortgage note.
rate floor For an adjustable-rate mortgage (ARM), the minimum interest
rate, as specified in the mortgage note.
property A property that is not occupied by the owner.
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tenancy A form of co-ownership that gives each tenant equal interest
and equal rights in the property, including the right of survivorship.
Also called a nonconforming loan. Terms and underwriting requirements
may vary from conforming loans.
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payment fee A fee charged for failing to submit the minimum monthly
payment by its due date.
A financial institution, like a bank, that loans you money, and expects
you to pay the money back to them in a stated period, usually with interest.
An encumbrance against property for money due, either voluntary
lifetime cap A provision of an ARM that limits the highest rate
that can occur over the life of the loan.
The formal document you fill out when you approach a lender to borrow
money. It includes your name and personal information, the amount of money
and other terms of the loan you need, as well as a detailed description
of the purpose of the loan.
The total amount of time you are given by a lender to pay off your
loan. Loan terms vary, but are generally set at 15 or 30 years.
to value ratio (LTV) The ratio of the amount of your loan to
the appraised value of the home. The LTV will affect programs available
to the borrower and generally, the lower the LTV the more favorable the
terms of the programs offered by lenders.
lock-in A written agreement guaranteeing the home buyer a specified
interest rate provided the loan is closed within a set period of time.
The lock-in also usually specifies the number of points to be paid at
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margin The number of percentage points a lender adds to the index
value to calculate the ARM interest rate at each adjustment period. A
representative margin would be 2.75%.
The date on which the principal balance of a loan, bond, or other financial
instrument becomes due and payable.
date The scheduled date for your final payment on a loan. After making
the payment on a loan's maturity date, you assume complete ownership of
your home from the lender.
A mortgage amount that is within 5 percent of the highest loan-to-value
(LTV) percentage allowed for a specific product. Thus, maximum financing
on a fixed-rate mortgage would be 90 percent or higher, because 95 percent
is the maximum allowable LTV percentage for that product.
The minimum amount that you must pay (usually monthly) on your account.
In some plans, the minimum payment may be 'interest only'. In other plans,
the minimum payment may include principal and interest.
allowance The percentage of a person's income they can comfortably
use each month to pay for where they live-with enough left over to spend
on food, clothing, and other luxuries. This percentage is usually 28%
of your total income.
rate The most common interest rate factor used to calculate the interest
charges on a monthly basis. The factor is computed by dividing the yearly
rate by 12.
The legal document outlining your responsibilities as a borrower, including
the amount of the loan you have taken and the details and schedule of
your re-payment. It states that if you do not make payments on your loan
in a timely fashion, you may lose your right to ownership of the home.
banker A company that originates mortgages. They loan you their funds
and close the loan in their name, then resell the loan in the secondary
broker An individual or company that brings borrowers and lenders
together for the purpose of loan origination. Mortgage brokers typically
require a fee or a commission for their services. As do mortgage bankers,
they take a loan application and process the necessary paperwork. Unlike
a mortgage banker, brokers do not fund the loan with their own money,
but work on behalf of several investors, such as mortgage bankers, S and
L's, banks, or investment bankers.
premium The amount paid by a borrower for mortgage insurance, either
to a government agency such as the Federal Housing Administration (FHA)
or to a private mortgage insurance (MI) company.
life insurance A type of term life insurance often bought by borrowers.
The amount of coverage decreases as the principal balance declines. In
the event that the borrower dies while the policy is in force, the debt
is automatically satisfied by insurance proceeds.
loan A legal document that pledges a property to the lender
as security for payment of a debt.
mortgage loan disability insurance A disability insurance
policy which will pay the monthly California mortgage loan payment in
the event of a covered disability of an insured borrower for a specified
period of time.
mortgage loan insurance (MI) Insurance written by an independent
California mortgage loan insurance company protecting the California mortgage
loan lender against loss incurred by a California mortgage loan default.
Usually required for loans with an LTV of 80.01% or higher.
mortgage loan The person or company who receives the California
mortgage loan as a pledge for repayment of the loan. The California
mortgage loan lender.
mortgagor The California mortgage loan borrower who gives
the California mortgage loan as a pledge to repay.
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amortization A gradual increase in mortgage debt that occurs when
the monthly payment is not large enough to cover the entire principal
and interest due. The portion of the payment, which should be paid, is
added to the remaining balance owed. The balance owed is added to the
remaining balance to create "negative" amortization.
new loan escrow
A fee charged by the escrow company to carry out the additional procedures
necessary when a new loan is created by a lender in connection with a
no cash-out refinance A refinance transaction in which the new
mortgage amount is limited to the sum of the remaining balance of the
existing first mortgage, closing costs (including prepaid items), points,
the amount required to satisfy any mortgage liens that are more than one
year old (if the borrower chooses to satisfy them), and other funds for
the borrower's use (as long as the amount does not exceed 1 percent of
the principal amount of the new mortgage).
no doc loan
A loan requiring no documentation of income. This type of loan is
ideal for self-employed individuals with good credit.
loan Also called a jumbo loan. Non-conforming loans usually incur
a rate and origination fee premium.
note A written agreement containing a promise of the signer to
pay to a named person, or order, or bearer, a definite sum of money at
a specified date or on demand.
default A formal written notice to a borrower that default has occurred
and that legal action may be taken.
The things you have to pay for consistently each month, excluding
housing costs. Obligations include things like car loans, credit card
bills, student loans, and alimony or child support.
original principal balance The total amount of principal owed on
a mortgage before any payments are made.
A loan processing fee charged by the lender for originating a new loan
(usually 1% of the loan amount, or one "point").
fee A fee imposed by a lender to cover certain processing expenses
in connection with making a real estate loan. Usually a percentage of
the amount loaned, such as one percent.
owner financing A property purchase transaction in which
the property seller provides all or part of the financing.
The actual owner of a property, according to public records.
An insurance premium charged by the title company to insure the buyer
that the title is free from defects up to the date the conveying instrument
is recorded. The seller frequently pays this premium.
A piece of land or property under one ownership. Parcels are created
when a single large property is sub-divided into many smaller pieces of
date The date when a new monthly payment amount takes effect on an
adjustable-rate mortgage (ARM) or a graduated-payment adjustable-rate
mortgage (GPARM). Generally, the payment change date occurs in the month
immediately after the adjustment date.
penalty (same as prepayment penalty) A charge imposed by a
California mortgage loan lender on a borrower who wants to pay off part
or all of a California mortgage loan loan in advance of schedule.
A charge imposed by a California mortgage loan lender on a borrower who
wants to pay off part or all of a California mortgage loan loan in advance
property Any property that is not real property.
Unit Developments (PUD) A subdivision of five or more individually
owned lots with one or more other parcels owned in common or with
reciprocal rights in one or more other parcels.
PITI Principal, interest, taxes and insurance--the components
of a monthly California mortgage loan payment.
points Charges levied by the California mortgage loan lender
and usually payable at closing. One point represents 1% of the face value
of the California mortgage loan loan.
attorney A legal document that authorizes another person to act on
one's behalf. A power of attorney can grant complete authority or can
be limited to certain acts and/or certain periods.
A way you can establish your ability to get a home loan worth a certain
amount of money, even before you have found the home you want to buy.
The amount of interest to cover the period from close of escrow until
the beginning of the first payment.
Those expenses of property which are paid in advance of their due
date and will usually be prorated upon sale, such as taxes, insurance,
prepayment penalty A charge imposed by a California mortgage loan
lender on a borrower who wants to pay off part or all of a California
mortgage loan loan in advance of schedule.
The process of determining how much money a prospective home buyer will
be eligible to borrow before he or she applies for a loan.
prime interest rate The interest rate that banks charge to their preferred
customers. Changes in the prime rate influence changes in other rates,
including mortgage interest rates.
Amount of debt, not including interest. The face value of a note or California
private California mortgage loan insurance (PMI) Insurance provided
by nongovernment insurers that protects lenders against loss if a borrower
fee A fee incurred for the preparation of a mortgage loan application
and for the preparation of supporting documents for underwriting.
A written inventory of things that need to be done to a home in order
to meet the requirements of a sales contract.
qualifying ratios The ratio of your fixed monthly expenses to
your gross monthly income, used to determine how much you can afford
to borrow. The fixed monthly expenses would include PITI along with other
obligations such as student loans, car loans, or credit card payments.
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rate cap A limit on how much the interest rate can change, either
at each adjustment period or over the life of the loan.
mortgage A fixed-rate mortgage that includes a provision that gives
the borrower a one-time option to reduce the interest rate (without refinancing)
during the early years of the mortgage term.
lock-in A written agreement in which the lender guarantees the borrower
a specified interest rate, provided the loan closes within a set period
rebate Compensation received from a wholesale lender which
can be used to cover closing costs or as a refund to the borrower. Loans
with rebates often carry higher interest rates than loans with "points"
agent A person licensed to negotiate and transact the sale of real
estate on behalf of the property owner.
real property Land and property, including anything of a permanent
nature such as structures, trees, minerals.
fees Fees charged by the County Recorder's Office for recordation
of Deed, Mortgage or Deed of Trust, and, at times, additional documents
requiring public notice.
The process of paying off one loan with the proceeds from a new loan using
the same property as security.
balance The amount of principal that has not yet been repaid.
remaining term The original amortization term minus the number
of payments that have been applied.
residential mortgage loan credit report (RMCR) A report requested
by your lender that utilizes information from at least two of the three
national credit bureaus and information provided on your loan application.
first refusal A provision in an agreement that requires the owner
of a property to give another party the first opportunity to purchase
or lease the property before he or she offers it for sale or lease to
mortgage A mortgage that has a position subordinate to the first mortgage.
secured loan A loan that is backed by collateral.
security The property that will be pledged as collateral for a
interest An interest that a lender takes in the borrower's property
to assure repayment of a debt.
carry back An agreement in which the owner of a property provides
financing, often in combination with an assumed California mortgage loan.
subdivision A housing development that is created by dividing a tract
of land into individual lots for sale or lease.
survey A print showing the measurements of the boundaries of a
parcel of land, together with the location of all improvements on
the land and sometimes its area and topography.
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A lien against real estate for unpaid taxes.
A part of a title search which determines if there are any unpaid taxes
or assessments which may be a lien against the property being searched
An undivided interest in property taken by two or more persons. The interest
need not be equal. Upon death of one or more persons, there is no
right of survivorship.
The period of time between the beginning date of the legal documents and
the date the entire balance of the loan is due.
The evidence one has of right to possession of land.
A company that specializes in examining and insuring titles to real estate.
title insurance Insurance against loss resulting from defects
of title to a specifically described parcel of real property.
title search An investigation into the history of ownership of
a property to check for liens, unpaid claims, restrictions or problems,
to prove that the seller can transfer free and clear ownership.
Ratio Monthly debt and housing payments divided by gross monthly income.
Equity that results from a purchaser giving his or her existing property
(or an asset other than real estate) as trade as all or part of the down
payment for the property that is being purchased.
Fee A fee charged each time you draw on your credit line.
of Ownership Any means by which the ownership of a property changes
hands. Lenders consider all of the following situations to be a transfer
of ownership: the purchase of a property "subject to" the mortgage,
the assumption of the mortgage debt by the property purchaser, and any
exchange of possession of the property under a land sales contract or
any other land trust device.
Act A federal law requiring a disclosure of credit terms using
a standard format. This is intended to facilitate comparisons between
the lending terms of different financial institutions.
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The process of evaluating a loan application to determine the risk
involved for the lender. Underwriting involves an analysis of the borrower's
creditworthiness and the quality of the property itself.
fee The cost to cover the evaluation of a loan application to determine
the risk involved for the lender.
loan A loan that is not backed by collateral.
costs The total amount of cash you need to pay when you buy a home,
minus the amount of your loan. Up front costs include your down payment,
any closing fees you must pay-like broker's commissions or insurance charges-and
the discount points you can use to lower your overall interest rate.
rate An interest rate that changes periodically in relation to a specific
financial index. Payments may increase or decrease accordingly due to
changes in the index. Adjustments are usually made on a quarterly basis.
Veterans Administration (VA) A government agency guaranteeing California
mortgage loan loans with no down payment to qualified veterans.
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garnishments A notice to an employer that a portion of an employee's
wages must be applied to a debt owed by said employee.
A fee charged by the lender to cover the expense incurred between funding
and the sale of the loan to the ultimate investor.
wraparound mortgage A mortgage that includes the remaining balance
on an existing first mortgage plus an additional amount requested by the
borrower. Full payments on both mortgages are made to the wraparound mortgagee,
who then forwards the payments on the first mortgage to the first mortgagee.
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X - Y
The way cities and towns define how areas within their borders are to
be used as real property. Zoning determines which areas of a city or town
can contain stores and other businesses, which should be used as residential
areas, and which can mix both types of property.
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