Terms with Category Mortgages

  • Repossession Definition,
    • The taking back of property after a borrower has stopped making payments.
  • Lender Definition,
    • The bank or mortgage company offering the loan.
  • Reverse Mortgage Definition, Important,
    • A loan that allows an older homeowner to convert built-up equity into cash. The loan comes due when the owner dies, sells the house or moves out.
  • Foreclosure Definition,
    • The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.
  • Hybrid Mortgage Definition,
    • A mortgage split into different components in order to better manage risks and costs.
  • Second Mortgage Definition, Important,
    • A mortgage which ranks after a first mortgage in priority on a registered land title.
  • Qualifying Rate Definition,
    • The mortgage rate that one must qualify for when applying for a variable rate or a term less than 5 years, so that if rates increase, the borrower can continue to make payments.
  • Convertible ARM Definition,
    • An adjustable rate mortgage (ARM) that can be converted to a fixed-rate mortgage under certain conditions.
  • Rate Definition,
    • Percentage a borrower pays for the use of money, usually expressed as an annual percentage.
  • Penalty Definition,
    • In mortgage terms, a penalty is a set rate or length of time the penalty will be charged based on the remaining loan amount. The penalty is usually three months interest or interest rate differential.
  • Non-recourse Debt Definition,
    • A loan secured by collateral where the borrower is not personally liable.
  • Capitalization Definition,
    • An estimate of the value of a rental or commercial property using the rate of return on investment and the property's annual net operating income.
  • Mortgage Banker Definition, Important,
    • An employee of a large bank who finds financing for the general public.
  • Credit Rating (CR) Acronym, Very Important,
    • A judgement of a person's ability to repay debts. The rating is often based on a person's current and projected income and past debt payment history. Also called a credit score.
    A metric to measure the credit worthiness of a debtor.
  • Loan Application Definition,
    • A document in which a prospective borrower details his or her financial situation to qualify for a loan.
  • Acceptance Definition,
    • A property seller's formal, written approval of a buyer's offer.
  • Late Payment Definition,
    • A sum a borrower sends to a lender that is received past the date when it was due.
  • Guaranty Definition,
    • A promise to assume responsibility for a debt if the borrower defaults.
  • Type 'B' Property Definition,
    • Property that may not be centrally heated or may only be seasonally accessible.
  • Exchange Definition,
    • A trade of property for other property or services. Like-kind property exchanges are a popular tax-deferral strategy.
  • Rent Definition,
    • When one party pays another for the use of an asset, service or property.
  • Posted Rate Definition,
    • The mortgage rates initially offered by a bank which a borrower is then expected to negotiate down.
  • Delinquent Mortgage Definition, Important,
    • A mortgage loan where the borrower fails to make payments as specified in the loan agreement.
  • Initial Interest Rate Definition,
    • The introductory interest rate on an adjustable-rate mortgage (ARM), which usually changes at a predetermined time.
  • Origination Date Definition,
    • The date on which a loan is funded.
  • Refinancing Definition,
    • The act of paying off one mortgage with another mortgage to take advantage of lower interest rates. Refinancing is also used to transform equity into cash for vacations, home improvements, or for consolidating debt.
  • Agent (agt) Abbreviation,
    • A person who acts on behalf of another. In real estate, an agent is a person who conducts transactions on behalf of sellers and sometimes buyers.
  • Property Tax Definition,
    • A levy by a city on real estate and personal property whose amount varies depending on the property's value.
  • LPQ Amount Definition,
    • A term used by CanEquity which is short for Loan, Purchase or Qualification amount.
  • Variable Rate Mortgage (VRM) Acronym, Very Important,
    • Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."
    A type of mortgage loan offered by brokers and lenders.
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