G L O S S A R Y O F M O R T G A G E T E R M S |
| High-Ratio Loan: Mortgage loans in excess of 80 percent of the loan amount divided by the lower of the sales price or appraised value. |
| Homeowners' Association Dues: The fees imposed by a condominium or home owners' association for maintenance of common areas. |
| Insured Loans: A loan insured by HUD-FHA or a private mortgage insurance company. |
| Interest: Consideration in the form of money paid for the use of money. Also a right, share or title in property. |
| Interest Rate: The percentage of an amount of money which is paid for its use for a specified time. |
| Investment Property: Real estate owned with the intent of supplementing income and not intended for owner occupancy. |
| Lien: A legal claim or attachment against property as security for payment of an obligation. |
| Loan-To-Value Ratio: The ratio between the amount of a given mortgage loan and the lower of sales price of appraised value. |
Market Value: The most probable price which a ready, willing and able buyer would pay and a willing seller will accept, both being fully informed under no pressure to act. The market value may be different from the price a property can actually be sold for at a given time (market price). |
| Maturity: The termination or due date on which final payment on a loan must be paid in full. |
| Monthly Payment: Usually, the amount of PITI (principal, interest, taxes, and insurance) paid each month on a mortgage loan. |
| Mortgage: The conveyance of an interest in real property given as security for the payment of a loan. |
| Mortgagee: The lender on a mortgage transaction. |
| Mortgage Insurance Premium (MIP): The consideration paid by a mortgagor (borrower) for mortgage insurance - either to the FHA or to a private mortgage insurer. |
| Mortgage Note: A written promise to pay a sum of money at a stated interest rate during a specified term. The note contains a complete description of the conditions under which the loan is to be repaid and when it is due. |
| Mortgagor: The borrower in a mortgage transaction who pledges property as security for a debt. |
| Non-Conforming Loan: Conventional home mortgages not eligible for sale and delivery to either FNMA or FHLMC because of various reasons, including loan amount, loan characteristics or underwriting guidelines. |
| Occupancy: The use of a property as a full-time residence, either by the title holder (owner-occupancy) or by another party through a formal agreement (rental). |
| Origination Fee: The amount charged for services performed by the company handling the initial application and processing of the loan. |
| Percentage Point: One percent of the loan or a measure of the interest rate. |
| PITI (Principal, Interest, Taxes, and Insurance): The most common components of a monthly mortgage payment. |
| Preliminary Title Report: The results of a title search by a title company prior to issuing a title binder or commitment to insure clear title. |
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