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.

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Additional Principal Limit Usage
Additional Principal Limit Usage

additional principal payment
Unscheduled principal payments made to reduce the remaining balance of a loan.

add-on interest
When interest is added to the amount borrowed. For example, a $5,000. 00 loan at a 10% nominal rate for one year would have the $500. 00 interest added to the loan amount. The base loan amount would be $5,500. 00, but the borrower would actually receive $5,000. 00 at closing.

adjustable-rate mortgage (ARM)
also called AMLs(Adjustable Mortgage Loans) or VRMs (Variable rate mortgage). A Mortgage where the interest rate may change over the life of the loan in accordance with movements in an index rate. The terms, adjustment schedule and index that the loan is based upon vary by loan program. To protect the borrower, "caps" often limit the amount of payment adjustment. ARMs are also referred to as

Adjusted Payment Number (htm)
Enter the payment number when adjustments should occur for
reimbursement information.


adjustment date
The date on which the interest rate changes for an adjustable-rate mortgage (ARM).

adjustment interval
For an adjustable rate mortgage, the time between changes in the interest rate charged. The most common adjustment intervals are one, three or five years.

adjustment period
With most ARMs, the interest rate and monthly payment change every year, every three years, or every five years. However, some ARMs have more frequent interest and payment changes. The period between one rate change and the next is called the adjustment period. So, a loan with an adjustment period of one year is called a one-year ARM, and the interest rate can change once every year.

Advance (Note) date (htm)
Enter
the closing date for the loan, when the customer will receive the requested
funds.


Advance (note) date (QAPR) (htm)
The date on which the funds were advanced (disbursed).


affordability analysis
A detailed analysis of your ability to afford the purchase of a home. An affordability analysis takes into consideration your income, liabilities, and available funds, along with the type of mortgage you plan to use, the area where you want to purchase a home, and the closing costs that you might expect to pay.

All (htm)
Select to
print all pages.


Allow Different Basis (htm)
Select if you want to use a different accrual method in the odd first
period than you do for the rest of the loan.


amortization
Literally to kill (root: mort) the outstanding balance of a loan by making equal payments on a regular schedule (usually monthly). The payments are structured so that the borrower pays both interest and principal with each equal payment.

amortization schedule or table
An amortization schedule shows the amount of each payment applied to interest and principal and shows the remaining balance after each payment is made. It may also show amount due for mortgage insurance or other items

Amortization Schedule Screen (htm)
This screen displays the amortization report for the loan
application. Information includes base terms, dates, Truth In Lending
information, the selected calculation options, and the amortization schedule.
You can modify the amortization schedule results by clicking the Customize
button.

You can scroll through the pages, zoom in and out, and print
the report by using the icons on the toolbar.


amortization term
The amount of time required to amortize the mortgage loan. The amortization term is expressed as a number of periods (months, quarters ,years etc. ) to maturity. For example, a 30-year monthly payment mortgage would have an amortization term of 360 months.

Amortization Term (htm)
The
total number of payments on which the payment is based.


amortize
To repay a mortgage with regular payments that cover both principal and interest.

Amount (htm)
Enter the
dollar amount of the payment due for this payment period.


Amount Advanced (htm)
Select
to charge interest on only the amounts actually drawn.


Amount Financed
This is the amount of money being loaned to the borrower. The total includes: the principal loan amount, amounts financed by the creditor which are not part of the finance charge, less any prepaid finance charges.

Amount of Payments (htm)
The
amount of each payment in this payment stream.


Annual Mortgage Insurance Accounting
Check this box if the mortgage insurance premium is payable to the agency on an annual basis.

annual mortgagor statement
A report sent to the mortgagor each year. The report shows how much was paid in taxes and interest during the year, as well as the remaining mortgage loan balance at the end of the year.

annual percentage rate (APR)
The total cost of credit on a yearly basis expressed as a percentage. It takes into account the total cost of the loan including finance charges (origination fee, points, prepaid interest, etc. This calculation is disclosed as part of the disclosure statement which is required by the Federal Truth-in-Lending Act. The statement is required on all consumer loans and is required to be disclosed within three working days of application for residential owner-occupied mortgage loans pursuant to the Real Estate Settlement Procedures Act (RESPA).

annuity
An amount paid at regular intervals from principal and interest provided by a fund set up for the purpose. (the present value).

annuity due
Where the first payment in a stream of payments is made at the beginning of the period and at the beginning of each subsequent period. Leases are often structured this way.

Another Button (htm)
Click
to add another escrow item under 1/6 aggregate escrow, or another rate to a random
rate loan or draw note, or another buydown under buydown terms.


Another buydown period
Enters the input area for another buydown period.

Another Stream Button (htm)
Click to add another payment stream.


application
A form used to apply for a loan and to record pertinent information about a prospective borrower and the proposed security.

application fee
The fee charged by the lender to the borrower for accepting a loan application. If you charge this fee to all applicants, whether or not their application is successful, you don't have to include it in the finance charge. However, if you only charge it to some applicants, you must include it. Application fees can be entered as an exclusion for real estate loans.

Application Fee
The fee charged by the lender to the borrower for accepting a loan application.

Application Fee (1) (htm)
Enter
the application fee for accepting this loan application. If you charge this fee
to all applicants, whether or not their application is successful, you don't
have to enter it here. However, if you only charge it to some applicants, you
must enter it here. Application fees can be entered as an exclusion for real
estate loans.


application Fee (1) Finance charge worksheet (some versions)
Enter the application fee for

appraisal
A written analysis of the estimated value of a property prepared by a qualified appraiser as of a particular date.

appraisal fees
Enter the amount charged to determine the value of the collateral. This figure will be included in the finance charge, except in the case of real estate loans where it may be excluded by specific exemption under RegZ.

Appraisal fees (htm)
Enter
the amount charged to determine the value of the collateral. This figure can be
included in the finance charge, except in the case of real estate loans where
specifically excluded.


appraised value
An opinion of a property's fair market value, based on an appraiser's knowledge, experience, and analysis of the property.

Appraised value
For loan-to-value purposes you will enter the lesser of the appraised value or the sales value at the time of the transaction.

Appraised Value (htm)
Enter
the appraised value of the property.


appraiser
A person qualified by education, training, and experience to estimate the value of real property and personal property.

Appreciation
The amount you expect the market value of this property to increase each year.

appreciation
An increase in the value of a property. The opposite of depreciation.

ARM (htm)
Select to
calculate an adjustable rate mortage.


ARM Loan Screen (htm)
Enter
the terms for an adjustable rate mortgage (where the interest rate changes
periodically according to a prescribed index). 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.


ARM rounding
n/a

ARMS rounding
With an adjustable rate mortgage the rate is a combination of an index to which a margin is added. The result can be an odd number like 9.12975. The system lets you round this to a more convenient number the choices are; round up, round down, round to the nearest 1/10th, round to the nearest 1/8th, round to the nearest 1/4, round to the nearest 1/2, or you can elect to leave the number unrounded.

arrears
In a stream of payments where the payments are made at the end of each period. The opposite of this arrangement is the annuity due where payments are made at the beginning of the period.

assessed value
The valuation placed on property by a public tax assessor for purposes of taxation.

assessment
The process of placing a value on property for the strict purpose of taxation. May also refer to a levy against property for a special purpose, such as a sewer assessment.

assessor
A public official who establishes the value of a property for taxation purposes.

asset
Anything of monetary value that is owned by a person. Assets include real property, personal property, and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on).

assignment
The transfer of title to property from one person to another.

assumable loan
These loans may be passed on from a seller of a home to the buyer. The buyer assumesall outstanding payments.

assumable mortgage
A mortgage that can be taken over ("assumed") by the buyer when a home is sold.

assumption clause
A provision in an assumable mortgage that allows a buyer to assume responsibility for thebalance remaining on a mortgage from the seller.

assumption fee
The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of an existing mortgage. Assumption fee

Assumption fee (htm)
Enter
the fee you charge for letting the borrower assume an existing mortgage.


assumption of mortgage
Assumption by a purchaser of liability for payment of an existing mortgage or deed of trust. The seller remains secondarily liable unless specifically released by the lender.

At Beginning of Period
Indicates if the regular deposit occurs at the beginning of the period.

At Beginning of Period (htm)
Indicates if the regular deposit occurs at the beginning of the
period.


At End of Period
Indicates if the regular deposit occurs at the end of the period.

At End of Period (htm)
Indicates
if the regular deposit occurs at the end of the period.


Attorney's title opinion (htm)
Enter the amount charged by the attorney for the title opinion.


Back (icon) (htm)
Click
to display the previous screen.


Balance (H) (htm)
Select
to display the outstanding balance in the Excel spreadsheet.


Balance Type
The amount of yearly maint you expect to pay.

balloon amount
The principal remaining at the end of the term is called a balloon payment. It is always larger than the regular payments.

Balloon Amount (htm)
Enter
the amount of the final installment, or, in a loan using multiple streams, the
amount of a one-time payment against principal.


Balloon Amount (QS) (htm)
Enter
the amount of the balloon you want to leave. When you click the Solve button,
the item you left blank (Term, Amount or Payment) will be calculated for you.


balloon amount [Entries]
Enter the amount of the final installment, or, in a loan using multiple streams, the amount of a one-time payment against principal.

balloon entries
The balloon terms entry frame will popup immediately below your base terms frame. If you have entered the term (number of periods of the entire loan) in the base terms screen you may enter the balloon term (number of periods before the balloon occurs) or the amount of the balloon.

balloon equity loans
A balloon home equity loan usually has a fixed interest rate (one that doesn't change overthe term of the loan). The loan term is shorter than would be required to repay the loan in full at maturity meaning that a balance must be paid in one lump sum payment, (the balloon payment). For example, to completely repay a loan monthly payments might be required over 30 years, but the loan might have a balloon maturity of 5 years, at which tie the entire balance will be due.

Balloon Flag
Purpose — Allows the user to designate whether the amount entered as the balloon is the final payment (subject to rounding) or whether the balloon entered would be the final balance after making the regular payment (i.e. the final payment is the amount entered for the balloon plus the regular payment amount). If the flag same_final_pmt is set to 1 or 2 and balloon_flag = 1, no rounding occurs on the balloon.

balloon loan
Any loan calling for periodic payments which will not be sufficient to repay the principal at term (maturity). The loan behaves like a fixed-rate mortgage for a set number of years(usually five or seven) and then must be paid off in full in a single "balloon" payment.

Balloon No (htm)
Select
if this loan will be fully amortized (no payment at maturity).


balloon payment
The outstanding balance at term of a balloon loan.

balloon term
The term, or final payment when the entire un-amortized amount of a loan (the balloon payment) is due and payable. For example a monthly payment loan calling for a balloon at the end of 5 years would have a balloon term of 60.

Balloon Term (htm)
Enter
the number of periods before the balloon payment is due.


Balloon Yes (htm)
Select
if this loan will have principal remaining at maturity.


Balloon/Hide button (htm)
Click
the Balloon button to add a balloon field, or click the Hide button to remove
it, if displayed.


base Loan amount
The mortgage amount before any financed mortgage insurance or VA funding fee is added. basisSelect the desired basis, which is the lending term for the method of handling the number ofdays in months and years when calculating interest. The number before the separator is the number of days in a month and the number after is the number of days in a year. 30/360 actual/365 actual/360 actual/actual 30/actual

Basis
The basis. This is the interest accrual basis for the loan. Use the following codes. 1 = 30/360, 2 = Actual/365, 3 = Actual/360, 4 = Actual/Actual, 5 = 30/365, 6 = 30/Actual. Required.

Basis
Select the
desired basis, which is the lending term for the method of handling the number
of days in months and years when calculating interest. The number before the
separator is the number of days in a month and the number after is the number
of days in a year.


Basis (htm)
Select the
desired basis, which is the lending term for the method of handling the number
of days in months and years when calculating interest. The number before the
separator is the number of days in a month and the number after is the number
of days in a year.


basis point -
1/100th of 1%. For example, 7½ basis points equals . 00075%.

Beginning Date (2) (htm)
Enter
the date of the first payment in this stream.


Beginning Date (htm)
Enter the date when the first payment was due for this payment stream.

Bill Interest
The interest for each period will be paid rather than accrued (accumulated).

biweekly payment mortgage (accelerated loan)
An accelerated mortgage that requires payments to reduce the debt every two weeks(instead of the standard monthly payment schedule). The 26 (or possibly 27) biweekly payments are each equal to one-half of the monthly payment that would be required if the loan were a standard fixed-rate mortgage, and they are often drafted from the borrower's bank account.

blanket mortgage
The mortgage that is secured by a cooperative project, as opposed to the share loans on individual units within the project.

Book of Examples (htm)
Click
to see a list of examples of loans of this type.


Book of Examples Screen (htm)
Highlight an existing loan sample to load the information into a
loan screen and click Select. If you want to add a current loan application to
your Book of Examples, fill in the information on the appropriate loan screen,
click the Book of Examples icon, and then click Capture. If you want to modify
an existing sample, load the sample, make your modifications, and click Update.


Borrower's Portion - $ (htm)
Enter the dollar amount that the borrower must provide to fund the buydown.


Borrower's Portion - % (htm)
Enter the percentage of the total buydown amount that the borrower must
provide.


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


breach
A violation of any legal obligation.

bridge or swing loan
Securing a loan with the borrowers' equity in their property (which is usually for sale) which allows them to close on a new house while their present home awaits sale.

broker
A person who, for a commission or a fee, brings parties together and assists in negotiating contracts between them. See mortgage broker.


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