A change – either to alter, add to, or correct – part of an agreement without changing the principal idea or essence.
A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index.
The repayment of the loan principal over time.
The amount of interest on your total loan amount that you'll pay annually (averaged over the full term of the loan).
An estimate of fair market value of property resulting from analysis of facts about the property; an opinion of value.
Special taxes imposed on a property related to local improvements, e.g. street lighting.
Taking over another person’s financial obligation; taking title to a parcel of real property with the Buyer assuming liability for paying an existing note secured by a deed of trust against the real property.
The recipient of benefits, often from a deed of trust; usually the lender.
An incentive offered by a builder or lender that allows you to lower your interest rate by putting up a certain amount of money.
The limit on an interest rate for an adjustable rate mortgage.
The portion of assets that a borrower will have after the loan closing. Cash reserves may be required as part of the loan process to ensure the borrower has financial flexibility after the transaction.
Generally the date the documents are recorded and title passes from Seller to Buyer. On this date, the Buyer becomes the legal owner, and title insurance becomes effective.
Typically a title agency representative or attorney who oversees the closing and witnesses the signing of the closing documents.
Money paid by the borrower in connection with the closing of a mortgage loan. This generally involves an origination charge, discount points, and fees for required third-party services, taxes, and government recording fees.
A document provided to customers at least 3 business days before closing that shows the actual terms and costs of the loan. These costs may include hazard and/or mortgage insurance premiums and escrow deposits for property taxes.
A formal letter sent by a lender stating the terms and conditions under which the lender agrees to loan money to a potential borrower.
Properties used for comparative purposes in the appraisal process that have been recently sold and have characteristics similar to property being appraised, thereby indicating the approximate fair market value of the subject property. Commonly called “comps”.
Positive characteristics of a borrower's credit, employment, or savings history which may be used to offset high debt-to-income ratios in the underwriting process.
Conventional home mortgages eligible for sale and delivery to either the Federal National Mortgage Association (FNMA, also known as "Fannie Mae") or the Federal Home Loan Mortgage Corporation (FHLMC, also known as "Freddie Mac"). These agencies generally purchase first mortgages up to loan amounts mandated by congressional directive.
A condition of sale that must be met before your contract to purchase a new home becomes binding.
Home loans other than government loans (VA and FHA).
A provision in some ARMs that allows it to change to a fixed-rate loan at some point during the term.
The rules of your neighborhood that are in place to protect, preserve and enhance the property values of the community.
A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness.
The attractive exterior elements of a home you notice immediately when you first your eyes on it.
Construction deadlines for standard selections and optional upgrades that must be met by the buyer in order for the home to be completed and delivered on schedule.
The percentage of a buyer's monthly gross income that goes toward paying debts.
An instrument used in many states in place of a mortgage.
Limitations in the deed to a parcel of real property that dictate certain uses that may or may not be made of the real property.
A loss of value in real property brought about by age, physical deterioration, functional, or economic obsolescence.
Discount points are charges paid to the lender voluntarily, usually at closing by the borrower or seller, to reduce the interest rate. One point is equal to 1 percent of the principal amount of the mortgage.
The difference between the sales price and the loan amount, which must be paid in cash by the buyer.
Money given to the seller by the purchaser as a security deposit and evidence of good faith, which gets put towards your down payment when you go into contract.
A right, privilege or interest limited to a specific purpose that one party has in the land of another.
The value of a property exceeding the amount of money owed on it.
An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition.
An escrow officer leads the facilitation of your escrow, including escrow instructions preparation, document preparation, funds disbursement, and more.
A type of credit score based on a number of criteria and it is a piece information that lenders use to assess an applicant's credit risk.
A fully amortizing mortgage loan where the interest rate on the note remains the same through the term of the loan.
A mortgage rate lock with the option to reduce the locked interest rate if market interest rates fall during the lock period.
Indicates what portion of an individual's income is used to make mortgage payments.
A legal document that transfers real property from the seller to the buyer.
The Buyer of a deed.
The seller of a deed.
Real estate insurance protecting against fire, some natural causes, vandalism, etc. depending upon the policy. Buyer often adds liability insurance and extended coverage for personal property.
A non-profit association that manages the common areas of a planned unit development (PUD) or condominium project.
A multiple-peril insurance policy available to owners of private dwellings that covers the dwelling and its contents, as well as personal liability.
A document that provides an itemized listing of the funds that were paid at closing.
A trust type of account established by lenders for the accumulation of borrower’s funds to meet periodic payments of taxes, mortgage insurance premiums and/or future insurance policy premiums, required to protect their security.
The base interest rate (usually from an external source) to which the lender typically adds a margin to determine the interest rate charge.
The regular payment that a borrower agrees to pay a mortgage lender.
Amount of money paid for the use of funds provided by another party. Also a right, share, or title in property.
The percentage of an amount of money that is paid for its use for a specified time.
A description of real property recognized by law, based on government surveys, spelling out the exact boundaries of the entire parcel of land. It should so thoroughly identify a parcel of land that it cannot be confused with any other.
The financial institution that makes loans directly to borrowers.
A form of encumbrance that usually makes a specific parcel of real property the security for the payment of a debt or discharge of an obligation. For example, judgments, taxes, mortgages, deeds of trust.
A key role of the listing agent or broker is to form a legal relationship with the homeowner to sell the property and place the property in the Multiple Listing Service.
A list of items that must be met prior to closing a loan.
A financial term used to express the ratio of a loan to the value of an asset purchased.
The number of days before a loan closing in which a customer's loan is protected from financial market fluctuations in interest rates.
The rate at which banks in the foreign market lend dollars to one another. LIBOR varies by deposit maturity. A common interest rate index; one of the most valid barometers of the international cost of money.
A fixed percentage rate that is added to an index value to determine the fully indexed interest rate of an adjustable rate mortgage (ARM). The margin is constant throughout the life of the mortgage, while the index value is variable.
A special tax imposed on property owners within a Community Facilities District to ensure that critical services such as schools, electricity, water, and streets are available in newly developing areas.
Usually, the amount of PITI (principal, interest, taxes, and insurance) paid each month on a mortgage loan.
The instrument by which real property is pledged as security for repayment of a loan.
A company that matches borrowers with lenders for a fee.
An agreement between lender and borrower detailing the terms of a mortgage loan such as interest rate, loan type, term, and amount.
An insurance policy which compensates lenders or investors for losses due to the default of a mortgage loan.
The Lender.
The Borrower.
The MLS is a database of properties listed for sale by Realtors who are members of the local Association of Realtors. Information on an MLS property is available to thousands of Realtors.
A number or other identifier that permanently identifies a registered residential loan originator.
A mortgage loan on a home where the loan value exceeds the standard limits for conforming loans set by Fannie Mae and Freddie Mac.
A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.
The use of a property as a full-time residence, either by the titleholder (owner-occupied) or by another party through a formal agreement (rental).
An up-front fee charged by a lender for processing a new loan application, used as compensation for putting the loan in place. Origination fees are quoted as a percentage of the total loan and are generally between 0.5% and 1% on mortgage loans in the United States.
A payment that combines Principal, Interest, Taxes, and Insurance.
A point is a fee equal to 1 percent of the loan amount.
A written instrument whereby a principal gives authority to an agent. The agent acting under such a grant is sometimes called an “Attorney-in-Fact”.
A preapproval letter indicates that you have been preapproved for a specified mortgage amount based on a preliminary review of your credit information.
A report from the title company that details the current condition of a property.
A fee imposed for paying off part of all of a loan before its maturity date.
The loan officer’s written opinion of the ability of a borrower to qualify for a home loan. Prequalification does not include a credit check and should not be confused with preapproval.
The residence that the borrower intends to occupy as their principal residence.
The interest rate that banks charge their preferred customers.
The amount borrowed or remaining unpaid. This is the part of the monthly payment that reduces the remaining balance of a mortgage.
A written promise to repay a specified sum of money plus interest at a specified rate and length of time.
A Planned Unit Development (PUD) is a project or subdivision that includes common property that is owned and maintained by a homeowners’ association for the benefit and use of the individual unit owners.
The written contract between the Buyer and Seller that states the terms and conditions under which the property will be sold.
A deed operating as a release, intending to pass any title, interest, or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title by the grantor.
A clause that sets a limitation on the amount or frequency of rate changes.
A guarantee that the lender will deliver a specific combination of interest rate and points if the mortgage closes by a specified date.
Filing documents affecting real property with the County Recorder as a matter of public record.
A Realtor® is a licensed real estate agent and a member of the National Association of Realtors®, a real estate trade association. Realtors also belong to their state and local Association of Realtors.
A real estate agent is licensed by the state to represent parties in the transfer of property. Every Realtor is a real estate agent, but not every real estate agent has the professional designation of a Realtor®.
The appointment to sign the final documents in order to close escrow and take legal possession of your home.
These are the people who carry out the title search and examination, work with you to eliminate the title exceptions you are not willing to take subject to, and provide the policy of title insurance regarding title to the real property.
A loan policy required by most lenders that is usually based on the dollar amount of the loan and its function is to protect the lender's interests in the property should a problem arise with the title.
The process a lender uses to determine if the risk of offering a mortgage loan to a particular borrower under certain parameters is acceptable.
Common ways to take title to California residential property.
A method of electronic funds transfer from one person or entity to another.