Current Mortgage Products

Current Loan Products

From Equity to LTV, you can use our glossary at any time for a better understanding of each term. Click on a bar below to view terms alphabetically within each category.

 

Adjustable Rate Mortgage (ARM)
A type of mortgage in which the interest rate and monthly payment change following a fixed rate period. Typically, these adjustments are made annually. Interest rate changes are determined by a financial index and most ARMs have "caps" which limit how much the interest rate can change each year and over the term of the loan.
Adjustment Date
The date on which the interest rate changes for an adjustable rate mortgage.
Amortization
The repayment of debt through a series of payments called installments.
Annual Percentage Rate (APR)
Different from a mortgage rate, the APR is intended to reflect the various costs associated with a loan in addition to interest. The APR represents fees, costs and interest as a cumulative rate as required by the federal Truth in Lending Act.
Appraisal
A report created by a licensed professional that estimates the fair and reasonable market value of the subject property.
Assessment or Assessed Value
The value placed on a property by a government used to determine the amount of property taxes that must be paid.
Asset
An item containing monetary value. Information regarding your assets must be obtained when applying for a loan. Examples of assets are items such as cash in a checking, savings or money market account, stocks, bonds or insurance policies that have a cash value. Other examples of assets are tangible items such as real estate, furniture or vehicles.
Assignment
Transfer of any property or any rights in a property to another entity, either a person or a firm. A common assignment is the assignment of mortgages from one person or firm to another.
Assumable Mortgage
A mortgage that can be taken over or "assumed"by the buyer when a house is sold.
Bi-weekly Payment or Mortgage
A type of mortgage in which scheduled payments are made twice monthly. By paying one half of what otherwise would be your monthly mortgage payment every two weeks, you are making one extra payment each year. The extra payment per year results in a shorter term on your fixed rate loan and you will have significant interest savings.
Bridge Loan
A type of loan providing a prospective borrower with financing for a downpayment and closing costs on a new house before selling their current home. This loan is secured by their current home and will be paid off when the current home is sold.
Broker
Also known as a Mortgage Broker, this individual matches prospective borrowers with lenders for the borrower to obtain a mortgage.
Cap (Annual & Lifetime)
The provision in an adjustable rate mortgage (ARM) limiting the range an interest rate can change during a given time period. There are usually two types of caps used to determine the interest rate range of an ARM, annual and lifetime. For example, the annual cap of a 5 year ARM might be 2% with a lifetime cap of 5%. This means that during the first adjustable rate period, a 5 year ARM with a beginning interest rate of 7% could increase to a maximum interest rate of 9% and, during the life of the loan, it could have a maximum interest rate of 12%.
Cash-Out Refinance
The refinance of a home in which all or part of the equity in the home is converted to cash and used by the borrower or homeowner. This is common for mortgage refinancings or home equity loans.
Certificate of Eligibility
A document issued by the Department of Veterans Affairs (VA) certifying the eligibility of a veteran in obtaining a VA Mortgage.
Certificate of Reasonable Value
A document issued by the Department of Veterans Affairs (VA) establishing a maximum value and loan amount for a VA guaranteed mortgage.
Change Date
The date a payment changes on an adjustable rate mortgage.
Clear Title
A title that is free of liens or legal questions as to the ownership of property.
Closing Costs
Closing costs can include origination fees, discount points, title insurance, taxes, Realtor fees, etc. These fees can be paid by either the buyer or the seller to close the mortgage transaction.
Closing or Settlement
The final step in the mortgage process consists of a meeting between the buyer, lender and seller (if it is a purchase transaction) at which the sale of the property is finalized. At this meeting, the mortgage documents are signed and money exchanges are made to complete the transaction.
Co-Maker
An individual or entity signing a legal document on an equal basis with other signers(s) who is then jointly liable with the other signers or makers for repayment of debt.
Combined Loan-to-Value (CLTV)
Expressed as a percentage, this shows the total of all loans or mortgages against a property. The principal balance of all mortgages on the property (including second and third mortgages) is divided by the appraised value of the property.
Commitment Letter
A formal written offer made by a lender stating the terms under which it agrees to lend money to the prospective borrower.
Community Home Improvement Mortgage Loan
An alternative financing option permitting low and moderate income borrowers to obtain up to 95% of the financing for the purchase and improvement of a home in need of modest or minor repairs. The repair work can account for as much as 30 percent of the appraised value.
Comparables
Properties of similar build and with similar amenities used to determine the value of a property by an appraiser. Often these properties are in the same neighborhood as the subject property and have been recently appraised.
Condominium
A type of property ownership in which the interior space of each unit is individually owned. Common areas, including land and amenities such as pools, tennis courts and club houses are owned in common with the other unit owners.
Conforming Loan
A loan that falls within the parameters set by government sponsored mortgage agencies such as Fannie Mae and Freddie Mac. Current conforming loan amounts are $333,700 and lower.
Construction Loan
A loan secured by real estate for the purpose of funding the construction of improvements or buildings on the property. Generally, the loan is structured with a construction period which varies from six to nine months, during this time money is advanced to the builder in stages as work progresses. At this time, interest payments are due to the lender monthly and calculated on the amount of funds advanced. At the end of the construction period, the "interest-only"construction portion of the loan is replaced with a permanent mortgage amortizing the total debt over the term and rate chosen.
Consumer Credit Reporting Agency
An organization or company that collects information about a consumer's credit history from credit repositories and public records.
Conventional Loan
A loan made by a lender in which the borrower's ability to repay the loan is not insured by a government agency such as FHA or VA.
Convertible Adjustable Rate Mortgage
An adjustable rate mortgage that can be converted to a fixed rate mortgage under specified conditions.
Cooperative (Co-op)
A structure or development of two or more units in which the right to occupy a unit is obtained by purchasing stock in the corporation owning the structure.
Credit Report
A listing of an individual's credit history used by a lender to determine a borrower's ability to repay debt.
Credit Repository
An organization or company that gathers, records, updates and stores financial and public record information about the payment records of individuals.
Debt Ratio
Also know as the back, outside or second ratio, this ratio calculation adds monthly liabilities to the sum of the proposed housing expense in order to calculate the total monthly indebtedness of the applicant. These debts include monthly liabilities not normal living expenses.
Deed
The legal document conveying title to a property.
Deed of Trust (Mortgage)
A legal document that pledges a property to the lender as security for payment of the loan.
Deed-In-Lieu
A deed given by the mortgagor or homeowner to the mortgagee or lender to satisfy a debt and avoid foreclosure.
Delinquency
Failure to make a mortgage payment within the required time frame. If you are delinquent on a mortgage you are normally said to be in default because you have not met requirements to pay back the loan within the required time frame.
Down Payment
The amount of the purchase price of a home that is not financed by a mortgage. This is equal to the sales price minus the loan amount.
Due on Sale Provision
A common provision in a mortgage permitting the lender to demand repayment in full if the borrower sells or conveys equity interest in the property serving as collateral for the loan.

 

Earnest Money Deposit
Money offered to the seller by a potential borrower to demonstrate the level of interest in purchasing the property.
Easement
A right to limited use of land held by another. Easements could include an interest in land to enable access to a property or to install sewer or other utility lines.
Encumbrance
Anything that affects or limits unrestricted ownership of a property, such as mortgages, leases, easements or restrictions.
Equal Credit Opportunity Act (ECOA)
Federal law that requires lenders to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.
Equity
The difference between the amount still owed on the mortgage and the market value of the property. This also represents a homeowner's financial interest in a property.
Escrow
The holding of documents and/or money by a neutral third party prior to closing. It is also an account held by the lender or servicer into which a homeowner pays money for taxes and insurance on the property.
Escrow Account
An account held by the lender or servicer into which a homeowner pays money for taxes and insurance.
Escrow Analysis
An examination of escrow accounts to determine if current deposits will provide enough funds to pay taxes, insurance and other bills when due.
Fair Credit Reporting Act
A consumer protection law regulating the disclosure of consumer credit reports by credit reporting agencies and establishing procedures for correcting mistakes on credit reports.
Fair Market Value
The price at which property is transferred between a willing buyer and willing seller.
Fannie Mae
The Federal National Mortgage Association (FNMA) is a quasi-governmental agency which is a publicly traded corporation. It was originally chartered by Congress and oversight is located within the Department of Housing and Urban Development. This corporation was formed to provide financial products and services for low, moderate and middle income families to assist them in purchasing homes of their own. FNMA works with lenders to make sure mortgage funds are available by creating a secondary market where investors can buy mortgage backed securities. Sale of these mortgage backed securities supplies money for mortgages.
Fannie Mae's Community Home Buyer's Program
An income based community lending program, sponsored by Fannie Mae, which has more flexible underwriting guidelines to increase a low or moderate income family's buying power and to decrease the total amount of cash needed to purchase a home. Borrowers who participate in this program are required to attend pre-purchase home-buyer education sessions.
Federal Housing Administration (FHA)
A government agency located within the Department of Housing and Urban Development.
Fee Simple
Unrestricted ownership of real property without condition or restriction.
FHA Mortgage
A mortgage that is insured by the Federal Housing Administration (FHA), also known as a government mortgage.
First Mortgage
A type of mortgage in which the interest rate is fixed for the entire term of the loan. This also creates a fixed payment for the entire term of the loan.
Fixed Rate Mortgage
Type of mortgage in which the interest rate is fixed for the entire term of the loan. This translates into a fixed payment for the entire term of the loan, however, taxes and insurance may cause your total payment to change.
Flood Insurance
Insurance for physical property damages resulting from a flood. Flood insurance is required for properties that are located in federally designated flood areas.
Foreclosure
A legal process where by the property held by the lender to secure a borrower's debt is sold to pay the defaulting borrower's debt.
Freddie Mac
The Federal Home Loan Mortgage Corporation (FHLMC) is a quasi-governmental agency which is a publicly traded corporation. It was originally chartered by Congress and oversight is located within the Department of Housing and Urban Development. The corporation was formed to provide financial products and services for low, moderate and middle income families to buy homes of their own. FHLMC works with lenders to make sure mortgage funds are available by creating a secondary market where investors can buy mortgage backed securities. Sale of these mortgage backed securities supplies money for mortgages.
Ginnie Mae
The Government National Mortgage Association (GNMA) is a government agency located within the Department of Housing and Urban Development. Created in 1968, its purpose is to facilitate the access of mortgages through creation of a secondary market for government mortgages (FHA or VA).
Good Faith Estimate
This document is an estimate of the fees that you will be required to pay at closing and is required to be sent from the lender to the prospective borrower.
Hazard Insurance
Also known as Homeowners Insurance, it is held by the homeowner to protect the homeowner and lender in the event of a property loss due to a fire and other hazards.
Home Equity Installment Loan
This loan is secured by a mortgage and can be used for a variety of purposes including home improvements, car purchases, educational purposes, etc. (This is also called a second mortgage.)
Home Equity Line of Credit
A line of credit is a revolving account that works like a credit card, and can be paid down or charged up for the term of the loan. A credit line is secured by a mortgage. (This is also called a second mortgage.)
Housing to Income Ratio
This includes a borrower's monthly housing expenses which includes Principal, Interest, Taxes and Insurance (PITI) and is divided by their combined total monthly income.
HUD
An acronym for the U.S. Department of Housing and Urban Development.
HUD-1 or Settlement Sheet
A statement which lists all costs associated with a real estate transaction and the party responsible for paying those costs.
HUD-1A
A HUD-1A is a settlement statement used for a refinancing transaction where there is no seller.
Improvement
A legal term referring to buildings erected on a parcel of land which may include any permanent structure or other development such as a driveway.
Index
An indicator or reference of particular interest rates which are being measured by that index. As the indicator of rates increases or decreases, so will the rate on the adjustable rate mortgage. There are many different types of indicies used, but the most common is the Treasury Constant Maturity Index or T-Bill Index.
Interest
The fee charged by the lender for money borrowed.
Interest Rate
A percentage which is expressed as an annual rate and applied to the mortgage amount for the use of funds.
Jumbo Mortgage
A loan amount that exceeds the maximum loan parameters set by Fannie Mae and Freddie Mac. (The current conforming loan limit is $333,700.) Loans greater than $333,700 are referred to as non-conforming loans or Jumbo Mortgages.
Lien
A legal claim against a property for payment of debt or obligation.
Loan to Value Ratio (LTV)
Expressed as a percentage, LTV is the ratio between the amount of the mortgage and the appraised value of the property.
Lock-In Agreement
A written agreement that guarantees the borrower a specified interest rate for a designated period of time. The agreement also states the charge for the interest rate, also known as points, which will be paid at the closing of the loan.

 

Margin
Expressed as a percentage, this figure is added to the index value by the lender to calculate the adjustable interest rate at each adjustment period.
Mortgage (Deed of Trust)
A legal document that pledges a property to the lender as security for payment of the loan.
Mortgage Disability Insurance
An insurance policy which pays the monthly mortgage payment for a specified period of time in the event of a disability to an insured borrower.
Mortgagee
The party lending money in a mortgage agreement.
Mortgagor
The party borrowing money in a mortgage agreement.
No Cost or Low Cost Loan
A loan where the lender increases the interest rate to provide funds to the borrower that are used to cover closing costs.
Non-Conforming Loan
A loan amount that exceeds parameters set by Fannie Mae and Freddie Mac. (The current conforming loan limit is $333,700.) Loans greater than $333,700 are referred to as Jumbo Mortgages or non-conforming loans.
Note
A legal document specifying the terms of debt including the amount to be paid, when installments are due and the term of the loan.
Origination Fee
A fee charged to the borrower to cover the lender's costs for creating the mortgage loan.
PITI
An acronym for the total cost to occupy the home. (Principal + Interest + Taxes + Insurance).
Planned Unit Development (PUD)
A development in which the land and/or facilities such as pools or tennis courts are owned in common by the members of the community.
Points
A one time charge by the lender to reduce the interest rate applied to a loan. A point is equal to one percent of the loan amount.
Pre-Approval or Pre-qualification
The process of determining how much a prospective borrower can afford to borrow before shopping for a property.
Prepaids
These costs are paid at closing to cover taxes, interest, and insurance. These items are recurring costs that do not relate to the acquisition of the property and cannot be financed.
Prepayment Penalty
A penalty imposed by a lender which is assessed if the borrower pays off a loan before maturity on a specified date.
Principal
The amount of debt remaining on a loan.
Private Mortgage Insurance (PMI)
Insurance protecting the lender if the borrower should default on the loan. Typically paid by the borrower, there are also programs available for the lender to pay PMI by increasing the interest rate charged. PMI is usually required when the loan to value ratio of the property exceeds 80%.
Qualifying Ratios
Thresholds established by lenders used to determine a maximum mortgage amount to grant to a borrower. Two numbers are given as qualifying ratios. The housing ratio is the proposed monthly mortgage payment including principal, taxes insurance and homeowners dues and then divided by the gross monthly income of all borrowers. The debt ratio is the sum of the proposed monthly mortgage payment added to all monthly debts and divided by the gross monthly income of all borrowers.
Rate and Term Refinance
When the principal balance remaining on a loan is cast into a new loan that has either a lower interest rate, a reduced term or both. This is done to reduce the monthly payment or term on the loan.
Refinancing
The repayment of a debt from the proceeds of a new loan using the same property as security. There are two types of refinancing, Rate and Term and Cash Out.
Residential Mortgage Credit Report (RMCR)
A type of credit report requested by a lender using information from the national credit repositories and information provided from your loan application.
Rider
The Rider is a legal document which amends and supplements the mortgage. It is used on adjustable rate mortgages to document such items as the formulation of rate and payment changes. It defines the limits or caps of the interest rate and the method of notice of interest rate and payment changes to the borrower. A rider is also necessary on all transactions involving a Plan Unit Development or Condo.
Right of Recission
A period of three days after closing in which the borrower is allowed to cancel an owner occupied refinance transaction.
Second Mortgage
A mortgage that has rights subordinate to a first mortgage. Examples of second mortgages include home equity lines of credit and home equity installment loans.
Survey
A drawing or map showing the precise boundaries of a parcel of land. It illustrates the location of improvements, easements, right of way encroachments and other physical features.
Tenants by the Entirety
Ownership by husband and wife who share equal rights to the undivided interest of the property. In the event of death of one, the survivor owns the property.
Tenants in Common
A form of ownership in which two or more individuals or parties each own a separate share in the same property. If one owner dies, his or her share in the property passes to his or her heirs.
Title
A document conveying legal ownership to a property.
Title Insurance
Insurance to protect the lender or buyer against loss arising from disputes over ownership of a property.
Title Search
A check of the title records of a property to ensure that the seller is the legal owner and that there are no liens or other claims against the property.
Truth in Lending Act
A federal law requiring lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the Annual Percentage Rate (APR) and all other charges that are associated with producing the loan.
Veterans Administration
A government agency providing mortgages with no down payment to qualified veterans. Mortgages insured by the VA are also referred to as government mortgages.
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