An acceleration clause – a contractual provision that requires immediate payment of the full amount of the loan upon default by the borrower. For example, if the borrower fails to pay his mortgage for six months, he would then owe the lender the entire amount owed on the note plus interest.
Earned interest – Interest on a loan that has already been repaid.
Addendum – A supplement to a written agreement.
Amortization – It takes the same length of amortization period to repay a loan as it does to borrow the original sum.Credit Card Number $100.00 $0.00 $100.00
Appreciation – A rise in the value of an asset. Depreciation – A decrease in the value of an assets.
Transferring something of value from one person to another.
Balance Due: The current unpaid balance on an account. In other words, the total owed today.
Balloon – The last payment on a loan to pay off the entire debt. It often comes after several smaller monthly installments.
A C Clear title means a clear title to land or other items.
A settlement sheet is a financial document that shows the monies that were collected and expected at the time of a real property sale.
A contract for deed is a type of installment sale where the purchaser has full rights to the property but doesn’t receive a deed until they’ve paid off the entire purchase cost.
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Title – When someone sells something, they transfer ownership of the item to the buyer. Sometimes sellers use a deed to show who owns what. For example, when you sell a house, you might sign a deed transferring ownership of the house to the buyer.
Deed In Lieut – A deed given by a buyer of a property to a former owner of the property to avoid having to pay for an expensive mortgage.
A deed of trust is similar to a mortgage but doesn’t require a borrower to be physically present at the property when they take out the loan. Instead, the lender holds legal title to the property until the debt is repaid.
If the payee fails to meet an obligation of a note, then the default status becomes failure.
Delinquent Payments – A late or missed bill. For example, if you receive an invoice for $100 on May 1st, and pay on June 1st, it would be considered delinquent on June 1st. If there is a 15-days grace perioud, then the invoice would be considered delinquent on July 1st.
Mortgage Broker – A mortgage brokerage firm that helps people buy homes by finding them financing for their mortgages.
A mortgage interest rate is the percentage charged for each year of the loan term. It is usually expressed as an annual percentage rate (APR).
Equity = Fair Market Valu – Amount Due (Escrow)
FMV – The price at which an asset could be sold between a willing seller and a ready buyer when both parties act without compulsion.
A first mortgage is a type of real estate loan that is usually the primary lien holder on a piece of real property.
Foreclosure – When someone fails to pay their mortgage, they lose their house through foreclosure.
If the first day of the month is the due date for an invoice, then there is a ten-day “gracewell” during which the invoicer could not consider themselves to be in breach of contract.
Homeowners’ policies (HHP) – an umbrella term for several types of homeowner’s coverage. They cover most risks associated with owning a house, including liability, earthquake, flood, wind, hail, vandalism, theft, and even terrorism.
Hypothecate: With a mortgage or deed, the property is pledged against a loan.
Additions – Any improvements to a house that would increase its value.
APR (Annual Percentage Rates) – A measure of the cost of borrowing money. For example, if you borrow $1,000 at an annual percentage interest of 10%, then you would pay $10 per month until the loan was paid off.
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Judicial foreclosure – A foreclosure where the defaulting borrower’s house is auctioned off to pay back their debts.
Late fees are usually charged by lenders when borrowers fail to pay their loan payments on time. They’re also called “late charges.”
Property Type – A type of property that identifies its legal status under the law.
Leveraging – using borrowed money to amplify gains and losses.
Liens – Security charges that protect lenders from losing their investments if they need to pay off debts.
LTV ratio – The percentage of the total cost of buying a house which is paid for by the bank.
Mortgages allow people to borrow money from banks by pledging their homes as collateral. They usually accompany notes which give the lender the right to take ownership of the house if the borrower fails to repay the loan.
Borrower – The person who takes out a loan and provides collateral for the loan. Lender – The person who gives the borrower the money and collects the interest payments from the borrower.
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A loan agreement between a lender (e.g., bank) and borrower (you).
A buyer is an individual or entity that buys mortgages and deeds of trusts from individuals or institutions as a normal course of their business.
An opinion of title is usually provided by an lawyer.
Owner financing – A sale is when the seller of a house funds the entire cost of buying the house. It eliminates the hassle of having to deal with banks.
PITI stands for Principal, Interest, Tax, and InsurancE. While the principal and interesT often remain the same for thE terM oF tHE loN oR, tHe taxS and insuReance mAY vAiLaGe yOuR eArly EYE.
An attorney-in-fact is someone who has been given the authority by an individual to act on his behalf.
Principal – The original principal of the loan, which is the sum of the total payments made minus any fees paid by the borrower.
Purchase Money Mortgages – A mortgage granted by the purchaser of real estate to the seller of the land as consideration in the sale.
RE Real Estate – land and everything attached to it
Recording – The recording at a registry office of an execution of a legal agreement such as a mortgage or a deed of trust. It becomes a part of the public records.
RESPA – The Federal Housing Administration (FHA) requires that sellers disclose certain terms of their sale, including the sales price.
Subordinate lending – A secondary mortgage is a type of second mortgage where the borrower takes out a new loan to pay off an existing one.
Mortgage – A loan secured by real estate.
Subordinate – A lower priority than a first liens becomes a second liens.
The term for the length of the loan before its maturity date.
Evidence that the person who owns a house has legal authority to be there.
A type of business liability policy that protects against loss or damage to a company’s intellectual property.
Trustee – A person or organization that holds property in trust for someone else until they fulfill their obligations.
Your underlying debt is any existing loans that are still outstanding.
Underwriting – reviewing an opportunity in order to determine whether it matches the risk of a particular deal.
A warranty deed transfers title from one party to another, and includes covenants that state that the land is clear of any liens.
A wrap-around refers to the situation where an individual has multiple mortgages on their house. They may be willing to sell one of them to another person if they get a better offer than what they could get by selling to someone else.