Welcome to our Glossary of Terms.   Here you will find descriptions of terms used throughout our web site and terms common in the industry.

To help you locate a term, enter the first character or two of a term and press the 'Refresh' button. Or, just click on the handy alphabetical index to jump to that section of the glossary.

First Item to Display:       
Or, Click on a letter below
A  |  B  |  C  |  D  |  E  |  F  |  G  |  H  |  I  |  J  |  L  |  M  |  N  |  O  |  P  |  Q  |  R  |  S  |  T  |  U  |  V  |  W  |  X  |  Y  |  Z  | 


Help (icon) (htm)
Click
to display the ZMath® Help file.


Help (QS) (htm)
Click
to display online Help for the Quick Solver.


Help Button (htm)
Click
to display the online Help topic for the Fees and Charges Worksheet tabs.


holdback
That portion of a loan commitment not funded until some additional requirement such as rental or completion is attained. (2) In construction or interim lending, a percentage of the contractor's draw which is held back.

home equity conversion mortgage (HECM) or reverse annuity loan
A type of mortgage that enables home owners to convert their equity in their homes into cash, usually in the form of monthly payments. The value of the property is the prime consideration for the lender since the borrower may have reduced income due to retirement etc. The loan is typically repaid after borrower no longer occupies the property or the equity is depleted.

Home Value
The value of the home at closing.

homekeeperSM
Fannie Mae's adjustable-rate conventional reverse mortgage, which allows older homeowners to borrow against the value of their homes and receive the proceeds according to the payment option they select. The amount available is based on the number of borrowers and their ages and the adjusted property value. Anyone 62 years or older who either owns his or her own home free and clear or has very low mortgage debt is eligible.

homeowner's insurance
An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.

housing expense
Principal, interest, real estate taxes and hazard insurance (PITI) and mortgage insurance premiums and/or homeowners association/condo fee, when applicable.

housing ratio
Housing expense/effective gross income. Also called Payment-to-Income Ratio or Front-End Ratio.

HUD
The U. S. Department of Housing and Urban Development, established by the Housing andUrban Development Act of 1965 to supersede the Housing and Home Finance Agency. It is responsible for the implementation and administration of government housing and urban development programs. Housing Ratio

HUD median income
Median family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department of Housing and Urban Development (HUD).

ID Number
Enter the loan identification number. This number will appear on the 1/6 Aggregate Escrow Deposit Statement.

ID Number (htm)
Optional
field that can be used to assign a identifying number to this loan information
for future reference. When saving loan information, you must enter either a
customer name, ID Number, or both.


If declining balance, then average balance (htm)
Select if the declining balance for PMI renewal
calculations should be based on the average balance for the year.


If declining balance, then beginning balance (htm)
Select if the declining balance for PMI renewal
calculations should be based on the beginning balance for the year.


If declining balance, then ending balance (htm)
Select if the declining balance should be based on the
ending balance for the year.


impound
That portion of a mortgagor's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Known as escrows or reserves in some states.

income property
Real estate developed or improved to produce income.

index
A published interest rate not controlled by the lender to which the interest rate on an Adjustable Rate Mortgage (ARM) or GPARM loan is tied. Some commonly used indices include 1YTB One Year Treasury Bill Yield, 3YTB Three Year Treasury Note Yield, 5YTB FiveYear Treasury Note Yield, 10YTB Ten Year Treasury Bond Yield, 30YTB Thirty Year TreasuryBond Yield, 6mTB Six Month Treasury Bill Yield, 6mCD Six Month CD Rate, 6mLIB Six MonthLIBOR, 1LIB One Year LIBOR, Prime Interest Rate. A margin is added to the index to determine the fully indexed rate, or ithat will be charged on the ARM or GPARM for the period.

Index Rate
The value of the interest rate index at the time of origination.

Initial Draw
The amount ($ or %) of any initial draw requested by the borrower. If the number is 1.0 or less, it is treated as a percentage. If there is no initial draw, this variable should equal
0.

initial interest rate
The original interest rate of the mortgage at the time of closing. This rate changes for an adjustable-rate mortgage (ARM). Sometimes known as "start rate" or "teaser. "

Initial Payment Amount
Initial Payment Amount

Initial Payment Periods
The number of periods before the first payment change.

Initial Rate
Initial Rate

Initial rate periods
some stuff

installment
The regular periodic payment that a borrower agrees to make to a lender.

installment debt
Borrowed money that is repaid in several successive payments(installments).

Insurance No (htm)
Select
if there will be no mortgage insurance or credit life/A&H insurance written
on this loan.


Insurance Rate 1, 2 (htm)
Enter
the appropriate renewal rates for mortgage insurance payments when there is an
up-front premium.


Insurance Yes (htm)
Select
if either mortgage insurance or credit life/A&H insurance will be written
on this loan.


insured mortgage
A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (MI). If the borrower defaults on the loan, the insurer must pay the lender the lesser of the loss incurred or the insured amount.

Interest (G) (htm)
Select
to display the interest portion of the payment in the Excel spreadsheet.


Interest Accrue (htm)
Select
to accumulate and amortize the interest over the term of the loan. No interest
payments will be made during the loan.

Interest Only Interest rate
Enter the interest rate which will be charged during the period when only interest payments will be made on this loan. Only the interest is paid during this period.

interest only loan
n/a

Interest Only Loan (htm)
Select
to calculate a loan where only the interest is repaid during term. The entire
principal balance is due in one payment at maturity.


Interest Only Period / Repayment Loan (ARM)
Enter the terms for an interest only period / adjustable rate loan and click Calculate. You must enter the interest rate, periods per year, term, loan amount, prepaids, advance date, and date of first payment along with the ARM terms or error messages display.

Click the Options and Variations button on the toolbar to
enter any variations.

The fields on the screen change as you click different
options. For example, if you click Multi-Streams, the Level Payment Installment
Loan (multiple screens) fields display at the bottom of the screen. Also, if
you select any options and variations, these fields display for data entry.

Interest Only Period / Repayment Loan (Level)
Enter the terms for an interest only / level payment loan (one that has equal
payments for the life of the loan) and click Calculate. You must enter the
interest rate, periods per year, term, loan amount, prepaids, advance date, and
date of first payment or error messages display.

Click the Options and Variations button on the toolbar to
enter any variations.

The fields on the screen change as you click different
options. For example, if you click Multi-Streams, the Level Payment Installment
Loan (multiple screens) fields display at the bottom of the screen. Also, if
you select any options and variations, these fields display for data entry.

Interest Only Periods per Year
Enter the number of periods per year during the interest only repayment period. Interest only is paid during this period with the repayment occuring after the interest only period.

Interest Only Term
Enter the total number of interest only payments during the interest only payment period.

Interest Periods Deferred
The number of interest periods deferred for a deferred payment annuity.

Interest Periods per year (htm)
per year.


Interest Periods Deferred (htm)
The number of interest periods deferred for a deferred payment
annuity.


Interest portion of pmt (F) (htm)
Select to insert a column to display the interest portion of the
payment.


Interest Rate
Enter the interest rate in full percent. For example, 8.375 or 5.5. The program will convert it to decimal form.

Interest Rate
The interest rate you expect to be charged by your lending institution.

Interest Rate (CON) (htm)
Enter the interest rate for the construction loan.

Interest Rate (CS) (htm)
Include a column showing the interest rate for the period.

Interest Rate (htm)
Enter
the interest rate in full percent. For example, 8. 375 or 5. 5. The program will
convert it to decimal form.


Interest Rate (M) (htm)
Enter the interest rate for this payment stream

Interest Rate (QS) (htm)
This
is a required field in Quick Solver. Enter the rate in full percent (for
example, 8. 375).


interest rate buydown plan
An arrangement wherein the property seller (or any other party) deposits money to an account so that it can be released each month to reduce the mortgagor's monthly payments during the early years of a mortgage. During the specified period, the mortgagor's effective interest rate is "bought down" below the actual interest rate.

interest rate cap
A limit on interest rate increases and/or decreases during each interest rate adjustment(adjustment period cap) or over the term (life cap) of the mortgage.

interest rate ceiling
For an adjustable-rate mortgage (ARM), the maximum interest rate, as specified in the mortgage note.

interest rate floor
For an adjustable-rate mortgage (ARM), the minimum interest rate, as specified in the mortgage note.

Interest Rate for Draw Period (htm)
Enter the interest rate for this draw period.


Interest term (htm)
Enter
the total number of interest payments for this payment stream.


Interest term when principal and interest are being amortized differently.
This is the Term of the interest portion of a loan where the principal and interest are being amortized differently. The left panel entry box applies to the principal and this entry box applies to the interest payments.

Interest type (htm)
Displays the appropriate interest types for the selected loan. Simple is the most common interest type. Discount is available with Single Payment Loans only. Add-on is available with Level Payment Loans only.

Interest Bill (htm)
Select to have the borrower pay the interest amounts as they come due.


Interest-only Loan Screen (htm)
Enter the terms for the interest-only loan (where principal is due
at maturity). You must enter the interest rate, number of interest periods per
year, term, loan amount, prepaids, advance date, and date of first payment or
error messages display.

Click the Options and Variations button on the toolbar to
enter any variations.


Investigation fees (htm)
Enter
the amount you charge for investigating the borrower. You don't need to include
the premium in the finance charge if it is optional, or if the creditor is
allowed to purchase it from an insurer of their choice.


investment property
A property that is not occupied by the owner.

Investment Rate
The percentage of your income you save/invest.

IRA (individual retirement account)
A retirement account that allows individuals to make tax-deferred contributions to a personal retirement fund. Individuals can place IRA funds in bank accounts or in other forms of investment such as stocks, bonds, or mutual funds.

irregular first period
J

joint tenancy
A form of co-ownership where each party has equal ownership in the property, including the right of survivorship.

judgment lien
A lien on the property of a debtor resulting from the decree of a court.

judicial foreclosure
A type of foreclosure proceeding used in some states that is handled as a civil lawsuit and conducted entirely under the auspices of a court. A type of foreclosure proceeding used in some states that is handled as a civil lawsuit and conducted entirely under the auspices of a court. Other states use non-judicial foreclosure

jumbo loan
A loan that exceeds Fannie Mae's legislated mortgage amount limits. Also called a nonconforming loan. A loan that exceeds Fannie Mae's and Freddie Mac's loan limits, currently at $227,150. Also called a nonconforming loan. Freddie Mac and Fannie Mae loans are referred to as conforming loans. Jumbo LoanA loan above the limits are set by the Federal National Mortgage Association and the FederalHome Loan Mortgage Corporation. They are also referred to as nonconforming loans.

Landscape (htm)
Select
to set the print orientation as landscape, typically interpreted as
"wide. "


Last Page (htm)
Click
to display the last page of the results.


late charge
The penalty a borrower must pay when a payment is made a stated number of days after its due date.

leap year
Calculate leap years under a Gregorian calendar as follows: If a year is evenly divisible by 4,it is a leap year unless it is also evenly divisible by 100. If a year is evenly divisible by 100,it is not a leap year unless it is also evenly divisible by 400.

lease option
An alternative financing option that allows home buyers to lease a home with an option to buy. Each month's rent payment may consist of not only the rent, but an additional amount which can be applied toward the down payment on an already specified price

leasehold estate
A way of holding title to a property wherein the mortgagor does not actually own the property but rather has a recorded long-term lease on it.

Left Margin (htm)
Enter
the left margin in tenths of an inch, or accept the default.


legal description
A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.

Lender Fees
The total of the lender fees.

lender paid mortgage insurance
Mortgage insurance program which allows the lender to collect a higher interest rate fromthe borrower and forward the excess interest to the mortgage insurance company to pay for the mortgage insurance.

lenders margin
This is simply the profit the lender expects to receive from the loan. You can ask your lender what the margin is on an adjustable rate mortgage. Typically, lenders use a discount rate initially as a teaser rate. You must be sure to get the normal margin after the discount period is over. Level payment loan LiabilitiesA person's financial obligations. Liabilities include long-term and short-term debt, as wel las any other amounts that are owed to others. liability insurance Insurance coverage that offers protection against claims alleging that a property owner's negligence or inappropriate action resulted in bodily injury or property damage to another party. It is usually part of a homeowner's insurance policy

Lending Limit
The lending limit for the area where the loan is originated. This number should be acquired from the governing (i.e. HUD or FNMA) agency.

Level Payment Loan (htm)
Select
when there will be equal payments, including principal and interest, for the
life of the loan. Level payment loans can result in a balloon payment at term
or they can be fully paid off (fully amortized).


Level Payment Loan Screen (htm)
Enter the terms for a level payment loan (one that has equal
payments for the life of the loan) and click Calculate. You must enter the
interest rate, periods per year, term, loan amount, prepaids, advance date, and
date of first payment or error messages display.

Click the Options and Variations button on the toolbar to
enter any variations.

The fields on the screen change as you click different
options. For example, if you click Multi-Streams, the Level Payment Installment
Loan (multiple screens) fields display at the bottom of the screen. Also, if
you select any options and variations, these fields display for data entry.


LIBOR / COFI Type Loan
TBD

lien
A legal claim against a property that must be paid off when the property is sold.

Life Expectancy
The life expectancy of the youngest borrower (in years).

life of loan cap
The maximum interest rate that can be charged during the life of the loan. Also called Lifetime Cap. This value is often expressed as an increment above the initial loan rate. For example, an adjustable rate loan with an initial rate of 7. 25% and a 6% lifetime cap willnever adjust above a rate of 13. 25% (7. 25+6. 0).

lifetime payment cap
For an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase or decrease over the life of the mortgage. See cap.

Lifetime Rate Cap
teslklk

lifetime rate cap
On an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase or decrease over the life of the loan. See cap.

Lifetime Rate Cap (htm)
Enter
the maximum percentage that the initial interest rate can increase for the life
of the loan.


line of credit
An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a certain time to a specified borrower. See home equity line of credit.

Line of Credit Calculation Flag
This flag tells the engine whether it should be calculating the amount of a line of credit.

1 = Calculate Line of Credit. 0 = Do NOT calculate Line of Credit.

Linear (htm)
This
indicates if the deposits or withdrawals that are subject to a linear growth
rate.


liquid asset
A cash asset or an asset that is easily converted into cash.

Loan Amount
The amount of money you intend to borrow. The purchase price less your down payment

loan amount
The base amount the borrower has requested before the addition of any finance charges.

Loan Amount (CON) (htm)
The
amount of the construction loan.



More glossary items are available....
Please use the index or Click here to view the next set of items.

 

^Top