Use the table below to learn more about mortgage acronyms and terms. The mortgage or deed of trust is your agreement to pledge your home or other real estate as security. The following set of standard mortgage terms is included in every mortgage in which it is incorporated by reference thereto, or, as the case may be, in every mortgage to which it is. Glossary of terms this glossary contains terms you should know to make your home buying experience easier. Further advance an additional loan added to your existing mortgage. It also can be somewhat daunting, even if youve done it before. Whether youre purchasing your first home or already have a mortgage, there are a lot of mortgage loan terms to know. To get you started, here are some common mortgage terms to know. Mortgage glossary mortgage term definitions explained.
Adjustable rate mortgages arms a mortgage in which the rate of interest adjusts based on an independently set index. The note contains a complete description of the conditions under which the loan is to be repaid and when it is due. See private mortgage insurance or fha mortgage insurance. A mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change. The definitions in this glossary are developed by the naic research and actuarial department staff based on various insurance references. Glossary of mortgage terms 1003 form commonly used mortgage loan application developed by fannie mae. Adjustablerate mortgage arm also known as a variablerate mortgage or floating rate mortgage, this type of loan has an interest rate that changes. The language in the mortgage industry, itself, can be confusing. A mortgage product with an interest rate that may change based on market factors. A mortgage holder is an individual or entity who owns the mortgage loan that was extended to a homeowner, and is the party entitled to enforce the terms of the mortgage. A abstract of title skip to next word a written history of all the transactions related to the title for a specific tract of land.
Become a mortgage pro with our mortgage glossary section. Canada mortgage and housing corporation cmhc cmhc is a federal crown corporation that administers the national housing act nha. Outsmart them early on and theyll think twice before trying to overcharge you. How to talk the talk buying a home can be exciting. A mortgage is more than an interest rate mortgage packages often. A mortgage deed is a document in which the mortgagor transfers an interest in real estate to a mortgagee for the purpose of providing a mortgage loan. Sometimes called the uniform residential loan application. A loan which utilizes real estate as security of collateral to provide for repayment should you default on the terms of your loan. Your stepbystep mortgage guide freddie mac singlefamily. The homereal estate property is considered the security aka collateral for repayment of the loan. We provide the best home mortgage loans, at the best interest rates available in utah.
Set of standard mortgage terms province of ontario. An amount equal to the replacement value of damaged property minus depreciation. There are two types of mortgage insurance premiums upfront and annual, the premium is based on several different factors of the loan terms. Variable rate mortgage vrm see adjustable rate mortgage. In fact, when you think about buying a house or refinancing your mortgage, you feel like a college freshman entering his or her first class of the semesternaive, unprepared and a hesitant. Also sometimes known as the renegotiable rate mortgage, the variable rate mortgage or the canadian rollover mortgage. Its complicated and full of acronyms, terms and jargon, none of which you have much knowledge about. A written promise to pay a sum of money at a stated interest rate during a specified term. The mortgage business seems to have its own language.
Canadian glossary of mortgage terms first foundation. Joint mortgage a mortgage where there is more than one person. Yet securing a mortgage to buy real estate can be a task. Glossary of mortgage terms adjustable rate mortgage arm. In the first column youll find the term or acronym and in the second column youll find what it stands for. Mortgage terms in canada carry short mortgage terms, and are usually. Our mortgage glossary helps you understand common mortgage terms used by loan officers and real estate professionals. Key words the meaning of key words printed like this and other words used in. Mortgage glossary understanding mortgage and real estate. Ginnie mae guarantees timely payments on mortgage backed securities mbs backed by federallyinsured loans including those. A mortgage term is the length of time, usually in years, in which the parameters of a mortgage have legal effect. A mortgage in which the interest rate is adjusted periodically according to a preselected index.
Standard home equity loans or second mortgages are closedend loans, meaning the. The more you know about seemingly complicated mortgage terms, the more fear youll instill in your bank or broker. Appendix n glossary of mortgage servicing terms new appendix the following is a glossary of terms related to the servicing of consumer mortgages. The most common fixedrate terms are 15 years and 30 years, but there are other options available depending on the lender and their offerings. Advanced funding has compiled a complete list of helpful definitions. Set of standard mortgage terms province of ontario filing. This is your money and 10 to 30 years of your life. A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the note. Dont hesitate to jump on livechat and ask us a question if you would like some further information or education about the loan process. There are many factors that come into play for people looking to buy a house. Use this glossary of mortgage terms to better understand the overall mortgage process as well as any specific mortgage terms that may be unfamiliar to you. Standard mortgage terms fixed rate saskatchewan the following set of standard mortgage terms forms part of first national financial gp corporations fixed rate residential mortgage. Unlike an interest rate, however, it includes other charges or fees such as mortgage insurance, most closing costs, discounts points and loan origination fees to.
Mortgage terms define mortgage industry terms for home. After the expiration of the mortgage term, the remaining balance of the mortgage will need to be renewed, refinanced or paid in full. Negative amortization mortgage where the payment may be less than the monthly accrued interest, and the outstanding interest is capitalized monthly into the loan balance. Second mortgage a second mortgage is a debt instrument in the form of a home equity line of credit or home equity loan. Ortgage arm also known as a variable rate loan, an arm usually offers a. Fixed rate mortgage or frm a mortgage where the interest rate and payment are fixed for the term of the loan. Understanding mortgage terminology will allow you to have a smoother home buying transaction.
You will deal with mortgage options, credit reports, loan applications, contracts, points, appraisals, change. Clear and concise explanations of the most common mortgage terms help you ensure you can easily understand all of the requirements and benefits of each type of loan. Helpful mortgage glossary, with terms and definitions. Paying less than the scheduled amount results in delinquency. Flexible mortgage a type of mortgage that lets you do things such as overpay, or take payment holidays.
On most mortgages, the scheduled payment is the fully amortizing payment throughout the life of the loan. Any additional borrowers that appear on the loan documents and whose credit and income was used to qualify for the loan. Abstract of title acceleration clause acre adjustable rate mortgage arm alternative mortgage products. Uniform services veterans mortgage mortgage terms, glossary. A term used in the truthinlending act to represent the percentage relationship of the total finance charge to the amount of the loan.
The following set of standard mortgage terms is included in every mortgage in which it is incorporated by reference thereto, or, as the case may be, in every mortgage to which it is attached, except to the extent that the provisions of these terms are modified by. We dont expect you to be an expert thats what were here for. Glossary and terms federal deposit insurance corporation. Alternative financing option for low and moderateincome households that also includes a down payment and a first mortgage, with funds for the second mortgage provided by city, county or state housing agencies, foundations or nonprofit corporations. This mortgage glossary is a good place to hone up on your mortgage vocabulary to make sense of what can be a very confusing process. Learn the definitions of a variety of mortgage terms to help you navigate and understand the home loan process from prequalification to movein day. You will deal with mortgage options, credit reports, loan applications, contracts, points, appraisals, change orders, inspections, warranties, walkthroughs, settlement. Traditional mortgage credit report occ office of the comptroller of the currency opa original principal amount ots office of thrift supervision pdf portable data file pfgmh permanent. This list provides definitions of some of the most common mortgagerelated terms that you need to know.
Acronyms used in this handbook acronym definition aaa american association of arbitrators atraqm ability to repay and qualified mortgage rule adr alternative dispute resolution aqb appraisal qualification board arm adjustable rate mortgage aus automated underwriting system bpo brokers price opinion. Definitions of common mortgage terms mortage terms. A mortgage is a legal agreement between a borrower and a lender allowing the lender to charge interest in exchange for providing money to the borrower in order to purchase a home. Among other services, they also insure mortgages for lenders that are greater than 80% of the purchase price or value of the home. Definitions of common mortgage terms one of the most important, and confusing, decisions that people make is buying a home and taking out a mortgage to pay for the house. Gather fcu mortgage definitions page describes our various definitions, and terms about mortgage, mortgage lending, and mortgage funding. Click on any link and the page will spin to the definition. Whatever the case, our mortgage experts are available to help with any questions you may have. All parties have an equal obligation to repay the loan.
Mortgage insurance money paid to insure the mortgage when the down payment is less than 20%. Definitions in this set of standard mortgage terms the following words. Mortgage terms define mortgage industry terms for home buyers. Mortgage glossary mortgage term definitions these are terms commonly used in the mortgage industry. Mortgage escrow accounts the account set by the lender to pay taxes and insurance on behalf of the borrower. An initial rate applies for a fixed amount of time, then changes annually.
It can be expressed as the actual rate or as the amount of change allowed above the start rate. This page contains a list of definitions for common mortgage terms. Amortization amortization is a decrease in the value of assets with time, which is normally the useful life of tangible assets. Some closing costs are not treated as finance charges. An adjustablerate mortgage, also known as a variablerate mortgage, generally starts out with an interest rate lower than a fixedrate mortgage. These terms do not apply to any existing mortgage loan you have with us to the extent that they are subject to separate terms and conditions. Va mortgage funding fee a premium of up to 2 percent depending on the size of the down payment paid on a vabacked loan. Main two types origination and refinancing origination. The amount the borrower is obliged to pay each period, including interest, principal, and mortgage insurance, under the terms of the mortgage contract. Cap the highest rate that an adjustable rate mortgage may reach. Glossary of account conditions and payment status glossary page 5 short name type code explanation ro 27 realestate mortgage withwithout other collateral, usually a second mortgage rs 5b second mortgage rv 25 va realestate mortgage rck 77 returned check rec 11 recreational merchandise loan ren 29 rental agreement. Home information pack they include documents such as an energy performance certificate, a property information questionnaire, evidence of title and standard searches. Use this glossary of mortgage terms to better understand the overall. Your interest rate cannot fluctuate on a fixedrate mortgage.
This page provides a glossary of insurance terms and definitions that are commonly used in the insurance business. Payment on the second mortgage is often deferred and carries low interest rates if any. Browse and search thousands of mortgage abbreviations and acronyms in our comprehensive reference resource. Acceptance a verbal or written acceptance of an offer to buy a home, made from the seller to the buyer. Wed like to thank the mortgage bankers association for their valuable assistance in providing the definitions for these terms. Fixedrate mortgage a mortgage on which the interest rate is set for the term of the loan ie 15 or 30 years. The terms and definitions that follow are meant to give simple, informal meaning for words and phrases you may see on our web. Borrowers with this type of loan will have the same principal and interest payments for the life of the loan. It includes the amount of interest you will pay during the terms of the loan, origination points and certain other items. The cost of consumer credit expressed as a dollar amount. Reverse mortgage a reverse mortgage allows individuals to borrow against their home value.
Mortgage dictionary glossary of key mortgage terms the. Fixed rate mortgage a mortgage where the interest rate payment is fixed for a specific time, commonly, two, three or five years. Sep, 2015 the amount the borrower is obliged to pay each period, including interest, principal, and mortgage insurance, under the terms of the mortgage contract. The property is sold when the homeowner passes away which serves to repay the principal balance. If you know the basic mortgage terms you will be able to flow with the home buying process with adequate knowledge. Many customers find it easier when you know the terms. The mortgage glossary directory of real estate terms. The meaning of key words printed like this and other words used in our banking agreement is explained in our client. These terms may just be a refresher for you or possibly an introduction to buying your firsthome. First mortgage skip to next word a mortgage that is the senior lien against a property.