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good
faith estimate |
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| hazard
insurance Insurance protecting against loss to real estate caused by fire, some natural causes, vandalism, etc., depending upon the terms of the policy. housing ratio The ratio of the monthly housing payment in total (PITI - Principal, Interest, Taxes, and Insurance) divided by the gross monthly income. This ratio is sometimes referred to as the top ratio or front end ratio. HUD The U.S. Department of Housing and Urban Development. |
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| index A published interest rate to which the interest rate on an Adjustable Rate Mortgage (ARM) is tied. Some commonly used indeces include the 1 Year Treasury Bill, 6 Month LIBOR, and the 11th District Cost of Funds (COFI). installment debt The regular periodic payment that a borrower agrees to make to a lender. ( i.e. car loans, student loans, etc.) This does not include your mortgage payment. (return to top) |
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| lien
An encumbrance against property for money due, either voluntary or involuntary. lifetime cap A provision of an ARM that limits the highest rate that can occur over the life of the loan. loan to value ratio (LTV) The ratio of the amount of your loan to the appraised value of the home. The LTV will affect programs available to the borrower and generally, the lower the LTV the more favorable the terms of the programs offered by lenders. lock-in A written agreement guaranteeing the home buyer a specified interest rate provided the loan is closed within a set period of time. The lock-in also usually specifies the number of points to be paid at closing. |
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| margin
The number of percentage points a lender adds to the index value to calculate the ARM interest rate at each adjustment period. A representative margin would be 2.75%. mortgage A legal document that pledges a property to the lender as security for payment of a debt mortgage disability insurance A disability insurance policy which will pay the monthly mortgage payment in the event of a covered disability of an insured borrower for a specified period of time. mortgage insurance (MI) Insurance written by an independent mortgage insurance company protecting the mortgage lender against loss incurred by a mortgage default. Usually required for loans with an LTV of 80.01% or higher. mortgagee The person or company who receives the mortgage as a pledge for repayment of the loan. The mortgage lender. mortgagor The mortgage borrower who gives the mortgage as a pledge to repay. |
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