- After a loan is granted, it must be maintained by the lender to ensure the loan terms are met. Servicing a loan involves collecting payments, keeping accounting records, computing interest and principal, etc.
servicing a loan
Related Terms and Acronyms
- Loan — Definition,
- Letting another party use something of value temporarily.
- Loan Processing — Definition,
- The steps taken by a lender to convert a loan application into an approved loan for the potential borrower. These steps include processing the application, conducting a credit investigation, evaluating the loan, etc.
- Mortgage (mtg) — Abbreviation, Important,
- A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
- Owner Financing (OF, OWN, O/F) — Acronym,
- A transaction in which the seller lends all or part of the money to the buyer.
- Umbrella Mortgage — Definition,
- A specific arrangement where one document encompasses one or more already existing mortgages registered on the same property. The mortgagee is responsible for remission of payment(s), to lender(s), while the mortgagor makes one payment to the mortgagee. Also referred to as a wraparound.
- Wraparound Mortgage — Definition,
- A refinanced home loan in which the balances on all mortgages are combined into one loan.