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

Buydown (J) (htm)
Select
to display the buydown amount in the Excel spreadsheet.


buydown account
An account in which funds are held so that they can be applied as part of the monthly mortgage payment as each payment comes due during the period that an interest rate buydown plan is in effect.

Buydown amount (J) (htm)
Insert
a column in the amortization schedule to display the buydown amount.


buydown mortgage or loan
A financing technique used to reduce the monthly payments for the first few years of a loan(temporary buydown), or for the entire life of a loan (permanent buydown. Funds in the form of discount points are given to the lender by the builder or seller to buy down or lower the effective interest rate paid by the buyer, thus reducing the monthly payments for a set time.

Buydown No (htm)
There
will be no buydown associated with this loan.


buydown periods
The number of payment periods which will have the interest rate reduced (bought down)due to the buydown arrangement

buydown points
The number of percentage points by which the rate will be reduced.

Buydown Points (htm)
Enter
the number of points by which the interest rate will be "bought down"
for this period. For example, if the nominal rate were 8% and you want to buy
it down to 6%, you would enter 2 here as full percent since the program will
convert it to . 02 for you.


Buydown points (I) (htm)
Select
to display the number of buydown points in the amortization schedule.


Buydown Terms - # of Periods (htm)
Enter the number of periods to discount the rate.


Buydown Yes (htm)
Select
to enter temporary (typically one to three years) or permanent (for the full
term) buydown. Buyer's Points $

buyers points $
The dollar amount required to be deposited to provide to fund the payment reduction.

buyers points %
The percentage (of the total loan amount) charged to the borrower to discount the loan.

Buyer's Points % (htm)
Enter
the percentage (of the total loan amount) charged to the borrower to discount
the loan.


Calculate (QAPR) (htm)
Compare
correct APR with disclosed APR.


Calculate Button (htm)
Click
to analyze all transaction data, apply the calendar math, calculate the
Regulation Z disclosures, prepare amortization schedules, and produce the
results.


Calculate Future Value
Indicates whether the future value is being calculated.

Calculate Future Value (htm)
Indicates whether the future value is being calculated.


Calculation Method - Gross Coverage (htm)
Select to calculate credit life insurance on the total of
the payments.


Calculation Method - Net Coverage (htm)
Select to calculate credit life insurance on the amount of the
loan.


Calendar (htm)
Click to
display the calendar.


Calendar Grid (htm)
Select
a day on the selected monthly calendar to enter the corresponding date in the
date field.


call option
A provision in the mortgage that gives the mortgagee the right to call the mortgage due and payable at the end of a specified period for whatever reason.

Cancel Button (htm)
Cancels
entries without saving any changes.


cap
A provision of an adjustable-rate mortgage (ARM) that limits the amount of adjustment in the interest rate, payment amount or both on an ARM mortgage. Caps may be applied toeach adjustment period and/or over the life of the loan. Example, a 2/6 would denote a 2%cap on the rate per adjustment period and 6% over the term of the mortgage. See: lifetimepayment cap, periodic payment cap, and periodic rate cap.

capital expenditure
The cost of an improvement made to extend the useful life of a property or to add to its value.

capital improvement
Any structure or component erected as a permanent improvement to real property that adds to its value and useful life.

cap-lifetime Rate
Enter the maximum percentage that the initial interest rate can increase for the life of the loan.

cap-payment in $
Enter the maximum dollar amount to which the payment can increase for the life of the loan.

cap-payment in %
Enter the maximum percentage to which the payment can increase for the life of the loan.

caps
A set percentage amount by which an adjustable rate mortgage may adjust eachadjustment period. For adjustable loans, caps are usually quoted as two numbers as in 2/6. The first number indicates how much a loan may adjust at each adjustment period while thesecond number indicates how much a loan may adjust over its lifetime. Loans like the 3/1 and 5/1 adjustable which have an initial fixed period are quoted with 3 numbers as in 3/2/6 which would mean that the first adjustment may be as much as 3%,subsequent adjustments are capped at 2% each, and the lifetime cap is 6%. Two-Step loans are quoted with a single cap, which is the amount by which the loan mayadjust at its single adjustment date.

Capture (htm)
Click to
save the current loan application as an example for future use.


cash-out refinance
A refinance transaction in which the amount of money received from the new loan exceedsthe total of the money needed to repay the existing first mortgage, closing costs, points,and the amount required to satisfy any outstanding subordinate mortgage liens. In otherwords, a refinance transaction in which the borrower receives additional cash that can be used for any purpose.

ceiling
The maximum rate to which an ARM loan could grow. As opposed to a Cap which is the maximum number of points of interest which the rate can increase.

Center on page (htm)
Select
to center the amortization schedule on the page.


certificate of deposit index
An index that is used to determine interest rate changes for certain ARM plans. Itrepresents the weekly average of secondary market interest rates on six-month negotiablecertificates of deposit. See adjustable-rate mortgage (ARM).

certificate of eligibility (COE)
VA Form 26-8320, the form issued to a named veteran as evidence of eligibility for a VA home loan.

certificate of reasonable value (CRV)
A document issued by the Department of Veterans Affairs (VA) that establishes the maximum value and loan amount for a VA mortgage.

change frequency - payment
The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage (ARM).

chattel
Another name for personal property.

Clear Button (htm)
Click
to remove your entries.


closing
The conclusion of the transaction. Includes but not limited to the delivery of the deed,signing of mortgage documents, settling the closing costs and the disbursement of funds to the seller and other interested parties. Also called settlement.

closing cost item
A fee or amount that a home buyer must pay at closing for a single service, tax, or product. Closing costs are made up of individual closing cost items such as origination fees andattorney's fees. Many closing cost items are included as numbered items on the HUD-1statement.

closing costs
Expenses (over and above the price of the property) incurred by buyers and sellers intransferring ownership of a property. These typically include a loan origination fee, discountpoints, appraisal fee, title search, title insurance, survey, taxes, deed recording fee, andcredit report charges. credit report, attorney, processing, underwriting, taxes, title insurance and survey. Closing CostsFees paid by the borrower when property is purchased or refinanced. Co-borrower

Closing Cost's Factor
Closing cost's factor. Typically, you can figure 3%. Enter the amount as a whole number, i.e. 3

Closing Date
The closing date.

Co-Borrower Birthdate
The co-borrower’s birthdate.

co-borrowers
Two or more borrowers obtaining the same mortgage. If a co-borrower is not living in the house he/she would be known as a non-occupying co-borrower.

collateral
An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.

collection
The efforts used to bring a delinquent mortgage current and to file the necessary notices to proceed with foreclosure when necessary.

co-maker
A person who signs a promissory note along with the borrower. A co-maker's signature guarantees that the loan will be repaid, because the borrower and the co-maker are equally responsible for the repayment. See endorser.

combined loan-to-value ratio (CLTV)
The principal balance of all mortgages on the property (including second and third liens)divided by the value of the property.

commitment letter
A formal offer by a lender stating the terms under which it agrees to lend money to a homebuyer. Also known as a "loan commitment. "

community property
In some states, a form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired separately by either spouse.

co-mortgagor
The person's name appearing on the application with the mortgagor. The co-mortgagor'sincome, assets, and debts are added together with the mortgagor's for underwriting andratio analysis. The co-mortgagor's must appear on the FHA 'Certificate of Commitment', theNote, and the Mortgage Deed of Trust. For full guarantee under the VA's program, the co-mortgagor must be either a spouse or another eligible veteran.

component
A small binary object or program that performs a specific function and is designed in such away to easily operate with other components and applications.

compound interest
Interest paid on the original principal balance and on the accrued and unpaid interest.

compounding
The payment of interest on interest. Compounding is the process of accumulating intereston the amount borrowed when the interest is paid(credited) more frequently then annually. If a loan is due in one year and compounding is annual, compounding will not occur. However, if a loan is due in one year and the compounding is monthly, then at the end of the first month the interest for one month will be added to the principal of the loan and thisamount (principal and interest) will be the amount on which interest will be calculated at the end of the second period.

Compounding Periods / Year (htm)
Enter the number of compounding periods per year.


Compounding Periods per Year
Enter the number of compounding periods per year.

condominium
A real estate A form of ownership of real property project in which each unit owner has titleto a unit in a building, an undivided interest in the common areas of the project, andsometimes the exclusive use of certain limited common areas. A condominium generallydefines each unit as a separately owned space to the interior surfaces of the perimeter walls, floors, and ceilings.

Confirm Request for Exit (htm)
Select to display a confirmation message when you click Exit. Deselect
to Exit without displaying a confirmation message.


conforming loan
A mortgage loan for $240,000 or lower.

constant payment to principal (plus interest) loan
A loan where the borrower pays a fixed principal amount each period plus the interest accrued for the period. For example $1,000. 00 plus interest per month.

construction loan
An interim loan secured by real estate to fund the cost of construction. Draws are made on the construction account as work progresses.

Construction No (htm)
No
construction terms.


construction only loan
At the end of the construction period the loan is paid in full. A new permanent loan may be originated to repay the loan.

Construction Yes (htm)
Select
for construction-only or construction/permanent terms.


construction/permanent loan
The loan for the construction period and the repayment period are made at the same time.

Consumer credit insur. prem (htm)
Enter the fee for consumer credit. You don't need to include
the premium in the finance charge if it is optional, or if the creditors are
allowed to purchase it from an insurer of their choice.


consumer reporting agency (or bureau)
An organization that prepares reports that are used by lenders to determine a potentialborrower's credit history. The agency obtains data for these reports from a credit repository as well as from other sources.

conventional mortgage
A mortgage that is not insured by HUD/FHA or guaranteed by the VA. It usually meets the underwriting guidelines of FNMA or FHLMC. Contrast with government mortgage.

convertibility clause
A provision in some adjustable-rate mortgages (ARMs) that allows the borrower to convert the ARM to a fixed-rate loan under certain conditions.

cooperative (co-op)
A type of multiple ownership in which the residents of a residential or mixed own shares in a business trust entity that holds title to, and grants them occupancy rights to a single apartment or unit through a proprietary lease or other arrangement.

Copies (htm)
Enter the
number of copies to print.


Copy (htm)
Click to
copy the results from this dialog box.


cost of funds index (COFI)
An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It represents the weighted-average cost of savings, borrowings, andadvances of the 11th District members of the Federal Home Loan Bank of San Francisco. See adjustable-rate mortgage (ARM).

covenant
A clause in a mortgage that obligates or restricts the borrower(s) and that, if violated, can result in foreclosure.

Credit card payments
Enter the total of your credit card payments. If you pay off the balance before interest begins to accrue do not include it here.

credit insurance - accident & health
Insurance which makes the borrower's payment if (s)he is disabled, or pays the loan balance in full in the event of the borrower's death.

credit life insurance - (mortgage life insurance)
A type of insurance often purchased by creditors to pay off the balance of their loan if they die while the loan is outstanding. Under Regulation Z, in order for the premium to be excludable from the Finance Charge, it must be OPTIONAL, or the borrower must be allowed to purchase coverage elsewhere. Credit Insurance calculation method - Gross coverage. Credit Insurance calculation method - Net coverage. Credit life rateCredit life term

Credit Life Rate (htm)
Enter
the rate for credit life insurance.


Credit Life Term (htm)
Enter
the term for credit life insurance. In most cases, this will be the same as the
term for the loan.


Credit Life, A&H insurance
The borrower will be covered by Accident and Health insurance or Credit Life insurance, or both.

credit Limit
The maximum amount that an applicant may borrow from a lender.

Credit Line
The amount of the credit line requested by the borrower ($ or %). If this number is 1.0 or
less it is treated as a percentage. If there is no credit line OR if the credit line is to be calculated, this variable should equal 0.

Credit Line Growth Rate
Used in the Homekeeper reverse mortgage calculation. This value should be entered as a percentage (i.e. 95). The engine will divide it by 100.

Credit Periods / Year (htm)
The number of crediting periods per year, which is the number of times per
year that interest is credited to the account if daily or continuous
compounding is selected.


Credit Periods per Year
The number of crediting periods per year, which is the number of times per year that interest is credited to the account if daily or continuous compounding is selected.

credit report
A report to a prospective lender of an individual's credit history prepared by a credit bureau. Information is included regarding outstanding debt, late payments, defaults, or bankruptcies.

credit report fee
A fee charged for obtaining a credit report from a credit reporting agency. The fee is includeable in the Finance Charge under Regulation Z, unless it is covered by an application fee which is imposed on all applicants(successful as well as unsuccessful). It also need NOT be included in real estate loans in which case it is covered by a specific exclusion.

Credit report fees (htm)
Enter
the amount charged for obtaining a credit report, which can be included in the
finance charge, except in the case of real estate loans where it is covered by
specific exclusion.


credit reporting agency
An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.

credit score
A Lender's standardized guidelines taking into account such things as the amount of money owed in relationship to income or the credit limit, the borrower's record of repayment, the length of the relationship and other factors.

creditor
A person to whom money is owed.

Current INDEX
from some table

Current Index (htm)
Enter
the published interest rate to which the adjustable mortgage rate is tied.
Commonly used indicators include the one-year Treasury Bill, Certificate of
Deposit Index (CODI), London InterBank Offer Rate (LIBOR), and the Cost of
Funds Index (COFI).


Current Page (htm)
Select
to print the page that currently displays on your screen.


Current Selection List (htm)
Select the desired sample file from the current list of selections.


Customer First Name
Enter the customer's first name. This name will appear on the 1/6 Aggregate Escrow Deposit Statement.


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