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.
Or, Click on a letter below
Make new default
format? No (htm)
Select to restore the previously selected options as the defaultMake new default
format? Yes (htm)
format for all amortization schedules.
Select to make the selected options the default format for allmargin
For an adjustable-rate mortgage (ARM), the amount that is added to the index to establish the interest rate on each adjustment date, subject to any limitations on the interest rate change. The margin remains the same over the life of the loan while the index moves up and down.Margin
The margin that will be added to the index to achieve the current interest rate.MARGIN Over
the margin over the current indexMargin Over (htm)
the amount, determined by the lender, which is added to the Current Index to
provide the borrower's initial interest rate.
A title that is free and clear of liens, clouds, or other title defects. A title which enables an owner to sell his property freely to others and which others will accept without objection.master association
A homeowners' association in a large condominium or planned unit development (PUD)project that is made up of representatives from associations covering specific areas withinthe project. In effect, it is a "second-level" association that handles matters affecting the entire development, while the "first-level" associations handle matters affecting their particular portions of the project.maturity
The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable.Maturity Date
Enter a new maturity date if it is different from the calculated maturity date, which is determined by the advance date and number of periods. The date you enter can be up to one month longer or shorter than the calculated date.Maturity Date (htm)
EnterMaximize Preview (htm)
a new maturity date if it is different from the calculated maturity date, which
is determined by the advance date and number of periods. The date you enter can
be up to one month longer or shorter than the calculated date.
Selectmaximum interest rate
to maximize the output window automatically when you click the Calculate
button. Deselect to maintain the normal output window size.
This is a system switch you can set to match the maximum interest rate your State, or your institution can or will charge.Maximum Interest Rate
Enter the maximum interest rate for all loans. The default value is 21Maximum Length 1st
Enter the maximum number of days until the first payment. Themaximum length of first payment
default is 365 days.
This is a system switch you can set to match the maximum time from closing to firstpayment, in days. Some jurisdictions have a limit on the number of days in this period (45days for example). You enter the number of days which applies to your organization.maximum loan amount
This is a system switch which reflects the size of the maximum loan your institution may make.Maximum Loan Amount (htm)
Entermaximum loan term
the maximum loan amount for which a borrower can apply. The default is
This is a system switch you can set to match the maximum term, in years, That a loan may have.Maximum Loan Term (htm)
EnterMaximum Rate Change (htm)
the maximum loan term, in number of periods, for all loans. The maximum term is
1,560 periods (weekly payments for 30 years).
EnterMaximum Rate Changes
the maximum amount that this interest rate can increase for the given time
max rate changemerged credit report
A credit report which reports data from two or more of the major credit repositories.Method (htm)
Select theMI (mortgage
insurance) premium calculated on Declining Balance (htm)
way you want to handle odd interest payments for short and long first periods.
Select if the monthlyMI (mortgage
insurance) premium calculated on Level Balance (htm)
insurance premium is based on a declining balance for the life of the loan.
Select if the monthlyMinimum Payment Calculation Method Flag
insurance premium is based on a level balance for the life of the loan.
This flag indicates to the engine whether this optional minimum payment on a Payment Option ARM is calucated as a principal and interest payment or an insteres only payment . 0=Interest Only, 1=Principal and Interest, 3=IndyMac Method of Calculation, 4=Interest Only Difference, 5=Principal and Interest DifferenceMinimum Payment Rate
The interest rate upon which the optional minimum payment is calcuated or the difference between the initial rate and the payment calculation rate.Month Due
Select the month this payment is due.Month Due (htm)
Selectmonthly fixed installment
the month that this payment is due from the drop-down list.
That portion of the total monthly payment that is applied toward principal and interest. When a mortgage negatively amortizes, the monthly fixed installment does not include anyamount for principal reduction.monthly housing expense
Total principal, interest, taxes, and insurance paid by the borrower on a monthly basis. Used with gross income to determine affordability.Months Cushion
Enter the number of months of cushion.Months Prepaid
The number of payments of premium that is prepaid.mortgage
A legal document that pledges a property to the lender as security for payment of a debt. A conveyance of an interest in real property given as security for the payment of an obligation.mortgage banker
A company that originates mortgages exclusively for resale in the secondary mortgage market, usually to Fannie Mae, Freddie Mac, or Ginnie Mae. .Mortgage Insurance (htm)
Selectmortgage insurance (MI)
the mortgage insurance option for all new loans.
A policy which insures the lender against loss caused by a mortgagor's default. . Mortgageinsurance can be issued by a private company in which case it is referred to a PMI, or by agovernment agency such as the Federal Housing Administration (FHA) or VeteransAdministration (VA). The insurance usually covers the amount over a percentage of themortgage loan. MIP/PMI Impound An amount for MIP/PMI required under certain circumstances and collected by the lenderand held in the impound account to insure that adequate funds are available to pay the nextyears premium. Usually equivalent to 2 months of the annual premium. mortgage insurance premium (MIP)The amount paid by a mortgagor for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (PMI)company.mortgage life and disability insurance
Some policies also cover the borrower in the event of disability. In the event that the borrower dies while the policy is in force, the debt is automatically satisfied by insurance proceeds. In the case of disability insurance, the insurance will make the mortgage paymentfor a specified amount of time during the disability. Be careful to read the terms of coverage, however, because often the coverage does not start immediately upon the disability, but after a specified period, sometimes forty-five daysmortgage life insurance
A type of term life insurance often bought by mortgagors. The amount of coverage decreases as the principal balance declines. In the event that the borrower dies while thepolicy is in force, the proceeds of the insurance policy pay the loan in full.mortgagee
The lender in a mortgage agreement. mortgagee clause Language in the homeowners and title insurance policies which identifies the mortgagee and it's successors and/or assigns, and assigns the proceeds of any claim to the mortgagee as its interest appears.mortgagor
The borrower of money. One who gives as security a mortgage or deed of trust on real property.mortgagor
The borrower in a mortgage transaction.Multi (M1) (htm)
TheMulti Payment amount
number of this payment stream.
The payment for this payment stream. multi stream loan
Payment Date (M9) (htm)
The date the first interest payment is due. Multi-1st Principal
Date (M6) (htm)
The date on which the first principal payment is due. Multi-Balloon Amount
The amount which will be due on the balloon payment date. Multi-Balloon Term
The number of payments to be made before the balloon payment is due. Multi-Clear (M15) (htm)
the entries you have made for this payment stream.
Properties that provide separate housing units for more than one family, although they secure only a single mortgage.multifamily mortgage
A residential mortgage on a dwelling that is designed to house more than four families, suchas a high-rise apartment complex.Multi-Interest rate
The interest rate for this payment stream. Multi-Interest Term
The total number of interest payments due in this payment stream. Multi-Interest
Periods per Year (M7) (htm)
The number of interest payments per year. Multi-Maturity Date
The actual maturity date of this stream of payments. Multi-New (M12) (htm)
Basemultiple disbursement (draw note) loan
this payment stream on the outstanding balance at the end of the previous
n/amultiple payment streams
Select to calculate a loan with multiple draws to theMulti-Principal Term
customer. You can calculate the repayment method using plus interest or level
The total number of payments for this stream. Multi-Principal
Periods per year (M4) (htm)
The number of principal payments per year for thisMulti-Streams/Remove
Multi Button (htm)
Click the Multi-Streams button to display the multiple streamName (htm)
fields for this loan. When the multiple stream fields are displayed, this
button displays Remove Multi to clear any multiple stream information.
Enter yournegative amortization
An increase in a mortgage balance due to the fact that the payment amount is not adequate to cover the entire principal and interest due. The amount of the shortfall is added to the outstanding balance creating "negative" amortization. Adjustable rate mortgages allow the interest rate to fluctuate and can cause negative amortization.Negative Amortization
Enter the maximum amount of the total loan value that the borrower can owe,net effective income
if interest rates fluctuate to a point where the borrower's minimum payment
doesn't cover the interest due.
Gross income less federal income tax.Net Proceeds
This is the number used for the calculation of the Total Annual Loan Cost (TALC) table required by Regulation Z. If this variable is equal to 0, the home_value is used. If the number is greater than one it is treated as a dollar amount. If it is 1 or less, it is used as a percentage and multiplied by the home_value to determine the number. Please note that this variable is only used as a short cut when you are trying to calculate a TALC table without reference to a specific example. If you are calculating a specific example, you should send 0 for this value.net worth
The value of all of a person's assets, minus all liabilities.New (htm)
New. New FHA
The only change that has occurred is an internal change that allows the component to correctly calculate FHA MIP when the new cutoff rules go into effect (all case files with a date of June 3, 2013 and later). These rules were described in HUD Mortgagee Letter 2013-04. For further information, please see HUD’s web site.New Loan (icon) (htm)
To correctly utilize the new cutoff rules, please pass a value of 3 in the variable fha and be sure that the variable ltv is populated with the correct loan-to-value ratio for the transaction being run. The component will calculate the correct term of insurance.
If you’re still running the current FHA, nothing has changed. Run it just as you have in previous versions.
ClickNew Savings (htm)
to create a new study, or loan application.
ClickNext Month Button (htm)
to create a new study file, or savings record.
JumpNext Page (htm)
ahead one month.
ClickNext Year Button (htm)
to display the next page of the results.
JumpNon-Borrower Spouse 1 Birthdate
ahead one year.
The birthdate of the first non-borrowing spouse.Non-Borrower Spouse 2 Birthdate
The birthdate of the second non-borrowing spouse.Non-display columns -
Select to hide columns in the Excel spreadsheet that aren'tNon-display columns -
selected. In Excel, you can choose to display these columns.
Select to delete columns in the Excel spreadsheet that aren'tnon-liquid asset
An asset that cannot easily be converted into cash.note
A legal document that obligates a borrower to repay a loan. Included terms are: interestrate, amount, maturity and repayment place and repayment method.note rate
The interest rate on a loan.notice of default
A formal written notice to a borrower that a default has occurred and that legal action may be taken.Number of Compounding Periods
Enter the number of interest periods in the account. For example, if you have monthly compounding and the account is 18 months long, this equals 18.Number of Compounding
Enter the number of interest periods in the account. For example,Number of Decimals for Accruals
if you have monthly compounding and the account is 18 months long, this equals
Enter the number of decimal points that accrual calculations should use when rounding. The minimum value is 5. This value should reflect your current practices.Number of Decimals
for Accruals (htm)
Enter the number of decimal points that accrual calculationsNumber of months of
should use when rounding. The minimum value is 5. This value should reflect
your current practices.
Enter the number of advance months for which you want to collectodd first period Odd interest adj. (htm)
payments for the escrow item.
Displaysodd interest adjustment
the methods for paying off odd interest adjustments. Amortize spreads the interest over the total number of payments.
style='mso-bidi-font-style:normal'>Prepaid adds the interest payment to the
closing costs. Amortize - adj final pmt
adds the interest payment to the final loan payment. Irregular 1st Pmt adds the interest payment to the first payment.
The amount by which the interest in the odd first period is more or less than a regularperiod must be accounted for in the payment schedule. The methods offered by the ZMath®Engine are: Amortize - Spread the interest ratably over all the payments. Prepaid - The borrower pays the lender (long first period) or the lender pays theborrower (short first payment) in one payment at closing. Amortize-adjust first - The entire amount is charged or credited at the time of thefirst regular payment. Amortize-adjust final - The entire amount is charged or credited at the time of thefinal payment.OK Button (htm)
AcceptsOpen Savings (htm)
the selected or edited entries.
ClickOpen Study (icon) (htm)
to open a previously saved study file, or savings record.
Clickoptions and variations
to open a previously saved study, or loan application.
The options and variations allowed with each loan type will be displayed when you click onthe choices icon. The combo boxes at the top or the screen represent calculation Options. The radio buttons in the lower part allow choices appropriate to that type. Some choices aren't available because they don't make sense. For example you can't choose skipped payments with a single payment loan, since there aren't any payments to skip.Options and Variations
Enter the appropriate options and variations for the loan beingOptions and Variations
Screen dd (htm)
calculated. Different loan types display different variations.
You can also enter the interest type, basis, and odd
interest adjustment. The values in these fields default to your User Defaults.
Enter the appropriate options and variations for the type ofOptions and
savings scenario being calculated.
Select ‘Deposits’ or ‘Withdrawals’ to indicate regular
deposits or withdrawals amounts and options.
You can also enter the basis and the number of accrual
decimals. The values in these fields default to your User Defaults.
Displays the options and variations available to the selectedOptions and
Variations dd icon (htm)
loan type, along with the entry screen. If you don't check this box, you may
still see the options and variations by clicking the Options and Variations
icon on the entry screen toolbar.
Click to display the options and variations screen. Use
this screen to select options such as basis and number of decimals for accruals
and to select deposits and withdrawals options.
More glossary items are available....
Please use the index or Click here
to view the next set of items.