Terms with Category Mortgages

  • Bridge Loan Bank,
    • A loan that "bridges" the gap between the purchase of a new home and the sale of the borrower's current home. The borrower's current home is used as collateral and the money is used to close on the new home before the current home is sold. Some are structured so they completely pay off the old home's first mortgage at the bridge loan's closing, while others pile the new debt on top of the old. They usually run for a term of six months.
  • Bridge Mortgage Bank, Important,
    • A short-term loan used to allow a homebuyer to purchase a replacement property while still trying to sell their existing home.
  • Broker (Bkr) Bank,
    • A person or firm who acts on behalf of another.
  • Building and Loan Association Definition,
    • A financial institution designed to help members finance real-estate transactions.
  • Buy-down Definition,
    • When a borrower or a mortgage broker "buys down" a mortgage rate, they make an upfront payment to the lender in order to lower the mortgage rate. A similar effect can be achieved by making a lump sum payment at the beginning of a mortgage term.
  • Buy-down Mortgage Definition, Important,
    • A home loan in which the lender charges below-market interest in exchange for discount points.
  • Call Option Definition,
    • A clause in a mortgage that gives the lender the right to request the balance at any time.
  • Canada Mortgage and Housing Corporation (CMHC) Bank Est. 1946, Canada-wide, Very Important,
    • The Canada Mortgage and Housing Corporation: this is a Federally run institution that provides banks and lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure CMHC assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "G.E. Capital."
    Insures Canadian mortgage lenders.
  • Cap Bank,
    • A limit imposed on an item.
    • The top limit on the amount the interest rate can increase during a single time period of an adjustable-rate mortgage. Every ARM has two caps: a periodic cap, which limits the periodic changes to the interest allowed in the loan agreement, and a lifetime cap, which governs the total increase that can be imposed during the life of the loan.
  • Capitalization Bank,
    • 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.
  • Carrying Costs Bank,
    • The cost of maintaining a property.
  • Cash Back Mortgage Definition, Important,
    • A mortgage that provides the borrower a lump sum cash payment.
  • Cash Flow Bank,
    • The money an investment produces after subtracting cash expenses from income.
  • Cash Flow Forecast Bank,
    • An estimate of when and how much money will be received and paid out of a business. It usually records cash flow on a month-by-month basis for a period of two years.
  • Cash Out Refinance Definition,
    • The taking out of a new mortgage on the same property in which the amount borrowed is greater than the amount of the previous mortgage. The difference is taken out in cash.
  • Central Bank Bank,
    • An institution that manages a nation's monetary policy.
  • Change Frequency Definition,
    • The scheduled period in which an adjustable-rate mortgage adjusts.
  • Chattel Bank,
    • Personal property that can be moved.
  • Chattel Mortgage Bank, Important,
    • A loan backed by movable personal property. Generally mobile or trailer homes.
  • Closed Mortgage Definition, Important,
    • Closed mortgages involve a strict repayment schedule of a specific amount with optional limited lump sum payments and payment increases.
  • Closing Definition,
    • In real estate, the delivery of a deed, the payment of the purchase price, the signing of notes, and the paying of closing costs, which completes a real estate transaction.
  • Closing Costs Bank,
    • The miscellaneous expenses involved in closing a real estate transaction that are over and above the purchase price. Some of the closing costs include title insurance, appraisal fee.
  • Closing Date (cloda) Bank,
    • The date a buyer takes possession of a property title.
  • Co-maker Bank,
    • Any party that co-signs a promissory note. All co-makers assume responsibility for the loan if any of the other co-signers renege.
  • Co-mortgagor Definition,
    • A party or individual who co-signs for a mortgage loan.
  • Co-signer Bank,
    • A person who signs a promissory note that is also signed by one or more other parties. All parties take responsibility for the debt if any of the others renege.
  • Collateral Bank,
    • Any property pledged as security for repayment of a debt.
  • Collection Bank,
    • The efforts used to bring an overdue mortgage, or other debt current, and the filing of necessary notices to proceed with foreclosure when necessary.
  • Collusion Bank,
    • A secret, deceitful agreement by two or more parties to defraud others.
  • Combined Loan-to-Value (CLTV) Bank, Very Important,
    • The connection between the unpaid principal balances of all the mortgages on a property (first and second usually) and the property's appraised value (or sales price, if it is lower).
    A term used by mortgage lenders and mortgage underwriters.
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