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- Lien - A legal claim or attachment against property as security for payment of an obligation.
- Loan Conditions - These are terms under which the lender agrees to make the loan. They include the interest rate, length of loan agreement, and any requirements the borrower must meet prior to closing.
- Loan Officer - The representative a home buyer initially consults about a mortgage loan. Sometimes called a loan officer, account executive, or sales representative.
- Loan Payment Reserves - A requirement of many loan programs that, in addition to funds for the down payment and other purchase-related costs, you have saved enough money to cover one or two months of mortgage payments after your closing.
- Loan Settlement - The conclusion of the mortgage transaction. This includes the delivery of a deed, the signing of notes, and the disbursement of funds necessary to the mortgage loan transaction.
- Loan-To-Value(LTV) - The ratio between the amount of a given mortgage loan and the lower of sales price or appraised value.
- Margin - The set percentage the lender adds to the index rate to determine the interest rate of an ARM.
- Modular Home - A factory-assembled residence built in units or sections, transported to a permanent site and erected on a foundation. Excludes mobile homes.
- Mortgage - The conveyance of an interest in real property given as security for the payment of a loan.
- Mortgagee - The lender on a mortgage transaction.
- Mortgage Insurance (MI) - See Private Mortgage Insurance (PMI) .
- Mortgage Processor - The mortgage employee responsible for collecting the completed application and all supporting documents before the entire loan packet is submitted to underwriting. Also known as a processor.
- Mortgagor - The borrower in a mortgage transaction who pledges property as security for a debt.
- Multiple Listing Service - A computer-based shared listing service for real estate agents that provides descriptions of most of the houses for sale in an area.
- Nonconforming Loan - Conventional home mortgages not eligible for sale and delivery to either FNMA or FHLMC because of various reasons, including loan amount, loan characteristics, or underwriting guidelines.
- Note - A general term for any kind of paper or document signed by a borrower that is an acknowledgment of the debt, and is, by inference, a promise to pay. When the note is secured by a mortgage, it is called a mortgage note and the mortgagee (lender) is named as the payee.
- Origination Fee - The amount charged for services performed by the company handling the initial application and processing of the loan.
- Points - A one-time charge by the lender to increase the yield of the loan; a point is 1% of the amount of the mortgage.
- Preapproval- A written commitment from a lender, subject to a property appraisal and other stated conditions, that lets you know exactly how much home you can afford.
- Prepaids - Closing costs related to the mortgage loan which are collected at loan closing including per diem prepaid interest and initial deposits of monthly escrows of taxes and insurance.
- Principal - The amount borrowed or remaining unpaid; also, that part of the monthly payment that reduces the outstanding balance of a mortgage.
- Private Mortgage Insurance (PMI) - Insurance written by a private company protecting the mortgage lender against loss resulting from a mortgage default.
- Processing - The preparation of a mortgage loan application and supporting documentation for consideration by a lender or insurer.
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