Abstract of Title - A summary of recorded transactions concerning a property. (An attorney or title insurance company examines an abstract of title for any title defects which must be cleared before a buyer can purchase clear, marketable and insurable title.) [top]

Acceleration - The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor (borrower), or by using the right vested in the Due-on-Sale Clause. [top]

Accrued Interest - Interest which has been incurred but not paid. [top]

Adjustable Rate Mortgage (ARM) - A mortgage in which the interest rate is adjusted periodically based on a pre-selected index. Subject to certain limitations, the rate and payments on an ARM loan rise and fall with the market. [top]

Adjustment Interval or Adjustment Period - Means loan payment by equal periodic payment calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance. [top]

Alternative Documentation - A substitute method of providing the documentation necessary to approve a loan. For example, bank statements may be substituted if it is not possible to provide written verification of the bank balance directly from the borrower’s bank. [top]

Amortization - The process of paying off a mortgage by equal periodic payments, calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance. [top]

Amortization Schedule - A monthly repayment schedule outlining how a loan will be paid off in fixed payments combining principal and interest. [top]

Annual Percentage Rate (APR) - A calculation that expresses the total cost of a mortgage loan as a yearly rate (according to a federally mandated procedure). The APR calculation takes into account monthly interest payments, mortgage insurance, points, and certain fees paid at origination. It generally results in a rate slightly higher than the stated interest rate on the loan. [top]

Appraisal - A written estimate of a property’s current market value, based on recent sales information for similar properties, the condition of the property and the neighborhood’s impact on future property value. [top]

Appraisal Fee - A fee charged by a licensed, certified appraiser to provide an appraisal. [top]

Assessment - A local tax levied against a property for a specific purpose, such as road or sidewalk construction or sewer or street light installation. [top]

Assignment - The transfer of property rights by one person, the assignor, to another, the assignee. [top]

Assumability - A loan feature that allows the loan to be transferred from the seller to the purchaser of a home with the same terms and conditions, subject to lender approval. [top]

Assumption - The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt, unlike a new mortgage where closing cost and new, probably higher, market-rate interest charges will apply. [top]

Balloon Mortgage - A short-term, fixed-rate loan with low payments for a set number of years and a large balloon payment of the remainder of the principal due at the end of the term. [top]

Blanket Mortgage - A mortgage covering at least two pieces of real estate as security for the same mortgage. Borrower (Mortgagor) One who applies for and receives a loan in the form of a mortgag limit the amount monthly payments on an adjustable rate mortgage may change. [top]

Broker - An individual in the business of assisting in arranging funding or negotiating contracts for a client but who does not loan the money himself. Brokers usually charge a fee or receive a commission for their services. [top]

Buy-down - When the lender and/or the home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires. [top]

Caps (interest)- Consumer safeguards which limit the amount the interest rate on an adjustable rate mortgage which may change per year and/or the life of the loan. [top]

Caps (payment) - Consumer safeguards whichrate mortgages in which rate is fixed for three-year, five-year, seven-year and 10-year periods, respectively, but may adjust annually after that. [top]

Cash Flow - The amount of cash derived over a certain period of time from an income-producing property. The cash flow should be large enough to pay the expenses of the income producing property (mortgage payment, maintenance, utilities, etc.). [top]

Cash Out (CO) - A refinance for more than the balance of the current mortgage. The excess money taken out reduces the borrower’s equity. [top]

Cashier’s Check (or Bank Check) - A check whose payment is guaranteed because it was paid for in advance and is drawn on the bank’s account instead of the customer’s. [top]

CC&Rs - See Covenants, Conditions and Restrictions [top]

Ceiling - The maximum allowable interest rate of an adjustable rate mortgage. [top]

Certificate of Eligibility - The document given to qualified veterans which entitles them to VA guaranteed loans for homes, business and mobile homes. Certificates of eligibility may be obtained by sending form DD-214 (Separation Paper) to the local VA office with VA form 1880 (request for Certificate of Eligibility). [top]

Certificate of Occupancy - Document issued by local government agency stating that a property meets the requirements of health and building codes. [top]

Certificate of Reasonable Value (CRV) - An appraisal issued by the Veterans Administration showing the property's current market value. [top]

Certificate of Title - Written opinion of the status of title to a property, given by an attorney or title company. This certificate does not offer the protection given by title insurance. [top]

Certificate of Veteran Status - The document given to veterans or reservists who have served 90 days of continuous active duty (including training time) It may be obtained by sending DD 214 to the local VA office with form 26-8261a (request for certificate of veteran status. This document enables veterans to obtain lower down payments on certain FHA insured loans).. [top]

Closing Agent - Neutral third party appointed to act as a custodian for documents and funds during the transfer of property from seller to buyer. Depending on local law and custom, this could be an attorney, escrow agent or title company. [top]

Closing Costs - Fees incurred in a real estate or mortgage transaction paid by borrower and/or seller at the closing of the transaction. [top]

Closing/Settlement Statement - The meeting between the buyer, seller and lender or their agents where the property and funds legally change hands, also called settlement. Closing costs usually include an origination fee, discount points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement.Also see HUD-1. [top]

Combined Loan to Value (CLTV) - The percentage of the property valued borrowed through a combination of more than one loan (for example, first mortgage and home equity line of credit. Mathematically, combined loan and line of credit amounts/property value = Combined Loan to Value Ratio). [top]

COFI - See Cost of Funds Index [top]

Collateral - Assets that secure a loan (in the case of a mortgage, real property serves as collateral). [top]

Condominium - A form of property ownership in which the homeowner holds title to an individual dwelling unit and an interest in common areas and facilities of a multi-unit project. [top]

Conforming Loan - A mortgage loan eligible for purchase by the two Federally sponsored housing agencies, Fannie Mae and Freddie Mac. [top]

Construction Loan - A short term interim loan to fund the construction of buildings or homes, which usually advances the money in installments as work progresses. [top]

Construction-to-Permanent (CTP) Loan - A construction loan that automatically converts to a permanent loan at the end of the construction period. [top]

Cost of Funds Index (COFI) -A common index used in adjustable rate loans based on the weighted-average interest rate paid for deposits by savings institutions that are members of the 11th Federal Home Loan Bank District. [top]

Contract Sale or Deed - A contract between purchaser and a seller of real estate to convey title after certain conditions have been met. It is a form of installment sale. [top]

Conventional Loan - A mortgage not insured by FHA or guaranteed by the VA. [top]

Covenants, Conditions and Restrictions (CC&Rs) - A document that defines the use, requirements and restrictions of a condominium or Planned Unit Development (PUD). [top]

Credit Report - A report detailing the credit history of a prospective borrower, used by lenders to help determine creditworthiness. [top]

Debt-to-Income Ratio/ - A figure, expressed as a ratio, that compares the amount of recurring debt payments a borrower is obligated to make to the amount of their income. [top]

Deed - Legal document by which title to a property is transferred from one owner to another. The deed contains a description of the property and is signed, witnessed, and delivered to the buyer at closing. [top]

Deed of Trust - Document creating a lien on a property as security for the payment of a debt. In some states, a mortgage is used instead. [top]

Default - Failure to meet legal obligations in a contract, including failure to make payments on a loan. A mortgage is generally considered to be in default when a payment is 30 days past due. [top]

Deferred Interest - When a mortgage is written with a monthly payment that is less than required to satisfy the note rate, the unpaid interest is deferred by adding it to the loan balance. See negative amortization. [top]

Delinquency - Failure to make payments on time. this can lead to foreclosure. [top]

Department of Veterans Affairs (VA) - An independent agency of the federal government which guarantees long-term, low-or no- down payment mortgages to eligible veterans. [top]

Discount Points - See Points [top]

Down Payment - In a home purchase, the difference between the purchase price and the mortgage amount. [top]

Due-on-Sale-Clause - A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home. [top]

Earnest Money - Deposit made by a buyer toward the down payment as evidence of good faith when the purchase agreement is signed.

ECOA - See Equal Credit Opportunity Act

Encumbrance - A legal right or interest in a property that affects title and may lessen the property value.

Entitlement - The VA home loan benefit is called entitlement. Entitlement for a VA guaranteed home loan. This is also known as eligibility.

Equal Credit Opportunity Act (ECOA) - Federal law requiring creditors 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 current market value of a property and the outstanding mortgage balance.

Escrow Account - Account held by lender containing funds collected in conjunction with monthly mortgage payments. Also known as impounds, the funds in this account are held in trust by the lender on behalf of the borrower, and are used to pay expenses such as property taxes and homeowner’s insurance.

Escrow Officer - See Closing Agent

Estimated Settlement (or Closing) Statement - A document provided by the closing agent a few days before closing, detailing all costs and indicating the final sum the buyer will be required to bring to the closing.

Expense-to-Income Ratio - Also known as Back-End Ratio and Debt-to-Income Ratio. The figure derived by dividing a borrower’s monthly financial obligations by his/her gross monthly income.

Fannie Mae (FNMA) - Corporation created by Congress that buys and sells residential mortgages. Fannie Mae provides funds for one in seven mortgages. [top]

Farmers Home Administration (FmHA) - Provides financing to farmers and other qualified borrowers who are unable to obtain loans elsewhere. [top]

Federal Home Loan Bank Board (FHLBB) - The former name for the regulatory and supervisory agency for federally chartered savings institutions. Agency is now called the Office of Thrift Supervision. [top]

Federal Home Loan Mortgage Corporation (FHLMC) - also called "Freddie Mac", is a quasi-governmental agency that purchases conventional mortgage from insured depository institutions and HUD-approved mortgage bankers. [top]

Federal Housing Administration (FHA) - A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders. FHA also sets standards for underwriting mortgages. [top]

FHA loan - A loan insured by the Federal Housing Administration open to all qualified home purchasers. While there are limits to the size of FHA loans ($155,250 as of 1/1/96), they are generous enough to handle moderately-priced homes almost anywhere in the country. [top]

FHA mortgage insurance - Requires a fee (up to 2.25 percent of the loan amount) paid at closing to insure the loan with FHA. This fee is financed in the loan. In addition, FHA mortgage insurance requires an annual fee of up to 0.5 percent of the current loan amount, paid in monthly installments. The lower the down payment, the more years the fee must be paid. [top]

Firm Commitment - A promise by FHA to insure a mortgage loam for a specified property and borrower. A promise from a lender to make a mortgage loan. [top]

First Mortgage - The primary lien against a property. [top]

Fixed-Rate Mortgage - A mortgage whose interest rate does not change for the life of the loan. Payments are also fixed. [top]

Flood Insurance - A form of hazard insurance required by the federal government to cover property damage or loss in flood zones. [top]

Floor - The minimum interest rate payable on an adjustable-rate mortgage. [top]

Federal National Mortgage Association (FNMA) -also know as "Fannie Mae" A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA. This institution, which provides funds for one in seven mortgages, makes mortgage money more available and more affordable. [top]

Foreclosure - A legal process by which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage. Also known as a repossession of property [top]

Freddie Mac (FHLMC) - Quasi-governmental agency that purchases conventional mortgages from insured depository institutions and HUD-approved mortgage bankers. [top]

Good Faith Estimate - Written estimate of costs the borrower will pay at closing, provided by a lender within three days of loan application. [top]

Ginnie Mae - see Government National Mortgage Association. [top]

Government National Mortgage Assn. (GNMA) - also known as "Ginnie Mae", provides sources of funds for residential mortgages, insured or guaranteed by FHA or VA. [top]

Graduated Payment Mortgage (GPM) - A type of flexible-payment mortgage where the payments increase for a specified period of time and then level off. This type of mortgage has negative amortization built into it. [top]

Gross Monthly Income - Total monthly income before taxes or expenses are deducted. Used in the loan origination process to calculate borrower’s ability to make payments on a loan. [top]

Guaranty - A promise by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract. [top]

Hazard Insurance - A policy that protects the insured against loss due to fire or certain natural disasters in exchange for a premium paid to the insurer. Also known as Home Owner’s Insurance or fire insurance. [top]

Home Equity Loan - An additional mortgage secured by the equity in the home. All funds for this loan are disbursed at closing. (In contrast, see Home Equity Line of Credit) [top]

Home Equity Line of Credit - A revolving line of credit secured by the equity in the home. Unlike a Home Equity Loan, these funds may be drawn and repaid like a credit card. [top]

Housing Expenses-to-Income Ratio - The ratio, expressed as a percentage, which results when a borrower's housing expenses are divided by his/her gross monthly income. See debt-to-income ratio. [top]

HUD-1 Settlement Statement - A form mandated by the federal government that itemizes the closing costs associated with purchasing a home. Also see Estimated Settlement Statement. [top]

Impound Account - See Escrow Account [top]

Impounds - When mortgage payment includes taxes and insurance. [top]

Impound - That portion of a borrower's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Also known as reserves. [top]

Index - A published rate used by lenders to calculate interest adjustments on adjustable rate mortgages (Index + Margin = Interest Rate). Common indexes include 1-Year Treasury securities, COFI (Cost Of Funds Index) and Six-Month LIBOR (London Interbank Offered Rate). [top]

Initial Rate - The rate charged during the first interval of an adjustable rate mortgage. [top]

Indexed Rate - The sum of the published index plus the margin. For example if the index were 9% and the margin 2.75%, the indexed rate would be 11.75%. Often, lenders charge less than the indexed rate the first year of an adjustable-rate mortgage. [top]

Interest - Charge paid for borrowing money. [top]

Interest Rate - The rate expressed as a percentage of the outstanding balance used to calculate interest charges. [top]

Interim Financing - A construction loan made during completion of a building or a project. A permanent loan usually replaces this loan after completion. [top]

Investor - A money source for a lender. [top]

Jumbo Loan - A mortgage with a principal balance that exceeds the amount eligible for purchase by Fannie Mae and Freddie Mac. Jumbo loans generally carry a higher interest rate. [top]

LIBOR (London Interbank Offered Rate) - The interest rate charged among banks for short-term Eurodollar loans, and a common index for adjustable rate mortgages. [top]

Lien - A legal claim against a property that must be paid when the property is sold. [top]

Lifetime Interest Rate Cap - The highest interest rate that can be charged for an adjustable rate mortgage during the life of the loan. [top]

Loan Origination Fee (Processing Fee) - Fee charged by a lender that compensates for the work in evaluating and processing the loan. [top]

Loan to Value (LTV) Ratio - The percentage of the property value borrowed (loan amount/property value = loan to value ratio). [top]

LTV - See Loan To Value Ratio [top]

Lock - Lender's guarantee that the mortgage rate quoted will be good for a specific number of days from day of application. [top]

Margin - The percentage amount added to an index to calculate the interest rate of an adjustable rate mortgage at each adjustment. [top]

Market Value - The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a given time. [top]

MIP (Mortgage Insurance Premium) - It is insurance from FHA to the lender against incurring a loss on account of the borrower's default. [top]

Monthly Housing Expense - Total monthly expense of principal, interest, taxes and insurance. [top]

Mortgagee - The lender in a mortgage loan transaction. [top]

Mortgage - Document creating a lien on a property as security for the payment of a debt. In some states, a Deed of Trust is used instead. [top]

Mortgage Banker - A lender that originates and funds, then sells and services mortgage loans. [top]

Mortgage Broker - A person or entity that arranges financing for borrowers, but places loans with lenders rather than funding them with the broker’s own money. [top]

Mortgage Insurance - Insurance purchased by a buyer to cover the lender’s risk of loss. Mortgage Insurance is generally required by lenders when the down payment is less than 20% of the purchase price. [top]

Mortgagor - The borrower in a mortgage loan transaction. [top]

Negative Amortization - Increase in principal balance that occurs when monthly payments are not large enough to pay all interest incurred on a loan, usually caused when payment caps prevent sufficient payment increases. Deferred interest is added to the loan balance, resulting in the borrower owing more than the original amount of the loan. [top]

Net Effective Income - The borrower's gross income minus federal income tax. [top]

Non Assumption Clause - A statement in a mortgage contract forbidding the assumption of the mortgage without the prior approval of the lender. Note: The signed obligation to pay a debt, as a mortgage note. [top]

Note - Legal document stating the terms of a debt and a promise to repay it. [top]

Origination Fee - See Loan Origination Fee [top]

Office of Thrift Supervision (OTS) - The regulatory and supervisory agency for federally chartered savings institutions. Formally known as Federal Home Loan Bank Board [top]

One-year Adjustable - Mortgage whose annual rate changes yearly. The rate is usually based on movements of a published index plus a specified margin, chosen by the lender. [top]

Origination Fee - The fee charged by a lender to prepare loan documents, make credit checks, inspect and sometimes appraise a property; usually computed as a percentage of the face value of the loan. [top]

P.E.R.S. - Public Employees Retirement System (CA) [top]

PMI - Private Mortgage Insurance (FNMA) [top]

Payment Cap - Limit on the amount by which a borrower’s adjustable rate mortgage payments may increase, regardless of rise in interest rates. May result in negative amortization. [top]

Periodic Interest Rate Cap - A limit on the amount that interest rates can change at each adjustment period. [top]

Permanent Loan - A long term mortgage, usually ten years or more. Also called an "end loan." [top]

PITI - Abbreviation for Principal, Interest, Taxes and Insurance, the components of a monthly mortgage payment, also called Monthly Housing Expenses. [top]

Pledged Account Mortgage (PAM) - Money is placed in a pledged savings account and this fund plus earned interest is gradually used to reduce mortgage payments. [top]

Points (or Discount Points) - Money paid to a lender at closing in exchange for a lower interest rate. Each point is equal to 1% of the loan amount. [top]

Power of Attorney - A legal document authorizing one person to act on behalf of another. [top]

Prepaid Expenses - Taxes, insurance and assessments paid in advance of due dates. [top]

Prepaid Interest - Interest charged to a borrower at closing to cover interest on the loan between closing and the end of the month in which the loan closes. [top]

Prepayment - Full or partial payment of the principal before the due date. This might occur if the borrower makes extra payments, sells the property, or refinances the existing loan. [top]

Prepayment Penalty - Fee that may be charged by a lender for early payment of debt. [top]

Prequalification - The process of estimating how much money a prospective homebuyer will be eligible to borrow prior to application for a loan. [top]

Prime Rate - Lowest commercial interest rate charged by a bank on short-term loans to its most credit-worthy customers. Often used as an index for home equity lines of credit. [top]

Primary Mortgage Market - Lenders making mortgage loans directly to borrower's such as savings and loan associations, commercial banks, and mortgage companies. These lenders sometimes sell their mortgages into the secondary mortgage markets such as to FNMA or GNMA, etc. [top]

Principal - The amount of debt, not counting interest, left on a loan. [top]

Private Mortgage Insurance (PMI) - In the event that you do not have a 20 percent down payment, lenders will allow a smaller down payment - as low as 5 percent in some cases. With the smaller down payment loans, however, borrowers are usually required to carry private mortgage insurance. Private mortgage insurance will usually require an initial premium payment and may require an additional monthly fee depending on you loan's structure. [top]

Profit and Loss Statement - Financial statement showing sales, expenses and profits over a period of time. Often a requirement for self-employed borrowers. [top]

Property Tax - A government tax based on the market value of a property. [top]

PUD (Planned Unit Development) - 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 PUD unit owner. [top]

Purchase Agreement - Contract signed by buyer and seller stating the terms and conditions under which a property will be purchased. [top]

Qualifying Ratio - Comparison of a borrower’s expenses (housing or total debt) to income. [top]

Rate Lock or Lock-In - A lender’s guarantee of an interest rate and related points for a set period of time, usually between loan application and loan closing. Protects borrower against rate increases during that time. [top]

Ratios - Top Ratio = PITI divided by Gross IncomeRatios - Bottom Ratio = PITI and Monthly Consumer Debt divided by Gross Income [top]

Real Estate Settlement Procedures Act (RESPA) - Law requiring lenders to give borrowers advance notice of closing costs. [top]

Realtor - A real estate broker or an associate holding active membership in a local real estate board affiliated with the National Association of Realtors. [top]

Recording - The act of entering documents concerning title to a property into the public records. [top]

Recording Fee - Money paid to an agent for entering the sale of a property into the public records. [top]

Refinancing - The process of paying off one loan with the proceeds from a new loan secured by the same property. [top]

Renegotiable Rate - Mortgage a loan in which the interest rate is adjusted periodically. See adjustable rate mortgage. [top]

Rescission - Federal law that guarantees the consumer the right to cancel a mortgage for a period of three business days following the signing of the documents if the subject loan is a refinance of the borrower’s primary residence. [top]

RESPA - See Real Estate Settlement Procedures Act [top]

Reverse Annuity Mortgage (RAM) - a form of mortgage in which the lender makes periodic payments to the borrower using the borrower's equity in the home asSatisfaction of Mortgage: The document issued by the mortgagee when the mortgage loan is paid in full. Also called a "release of mortgage." [top]

Second Mortgage - A subordinate mortgage made in addition to a first mortgage. [top]

Secondary Mortgage Market - The place where primary mortgage lenders sell the mortgages they make to obtain more funds to originate more new loans. It provides liquidity for the lenders. [top]

Servicing - all the steps and operations a lender performs to keep a loan in good standing, such as collection of payments, payment of taxes, insurance, property inspections and the like. [top]

Settlement (or Closing) - Meeting between the buyer, seller and closing agent at which property and funds legally change hands. [top]

Settlement Costs - See Closing Costs [top]

Settlement Cost (HUD guide) - Booklet published by the department of Housing and Urban Development (HUD) that provides an overview of the lending process, given to consumers after completing their loan applications. [top]

Shared Appreciation Mortgage (SAM) - a mortgage in which a borrower receives a below-market interest rate in return for which the lender (or another investor such as a family member or other partner) receives a portion of the future appreciation in the value of the property. May also apply to mortgage where the borrowers shares the monthly principal and interest payments with another party in exchange for part of the appreciation [top]

Simple Interest - Interest which is computed only on the principle balance. [top]

Survey - A measurement of land, prepared by a licensed surveyor, showing a property’s boundaries, elevations, improvements, and relationship to surrounding tracts. [top]

Sweat Equity - Equity created by a purchaser performing work on a property being purchased. [top]

Tax Impound - See Escrow Account [top]

Term - The number of years it will take to pay off a loan. [top]

Title - Document which gives evidence of ownership of a property and the rights of ownership and possession of that property. [top]

Title Company - A company that insures title to property.

Title Insurance - Insurance which protects the lender (lender’s policy) or the buyer (owner’s policy) against loss due to disputes over ownership of a property. [top]

Title Search - Examination of municipal records to ensure that the seller is the legal owner of a property and that no liens or other claims exist against the property. [top]

Transfer Tax - Tax paid when title passes from one owner to another. Not applicable in all jurisdictions. [top]

Truth-In-Lending Act - Federal law requiring written disclosure of the terms of a mortgage by a lender to a prospective borrower within three business days of application. [top]

Two-Step Mortgage - a mortgage in which the borrower receives a below-market interest rate for a specified number of years (most often seven or 10), and then receives a new interest rate adjusted (within certain limits) to market conditions at that time. the lender sometimes has the option to call the loan due with 30 days notice at the end of seven or 10 years. also called "Super Seven" or "Premier" mortgage. [top]

Underwriting - The process of verifying data and evaluating a loan for approval. [top]

USURY - Interest charged in excess of the legal rate established by law. [top]

VA - Veterans Administration [top]

VAF - Veterans Administration Funding Fee [top]

VOD - Verification of Deposit. Used to determine amounts in checking, savings, IRA's, ect... [top]

VOE - Verification of Employment [top]

VOM - Verification of Mortgage [top]

VOR - Verification of Rent [top]

VA Loan - a long-term, low-or no-down payment loan guaranteed by the Department of Veterans Affairs. Restricted to individuals qualified by military service or other entitlements. [top]

VA Mortgage Funding Fee - a premium of up to 1-7/8 percent (depending on the size of the down payment) paid on a VA-backed loan. [top]

Variable Rate Mortgage (VRM) - see adjustable rate mortgage [top]

Verification of Deposit (VOD) - a document signed by the borrower's financial institution verifying the status and balance of his/her financial accounts. [top]

Verification of Employment (VOE) - a document signed by the borrower's employer verifying his/her position and salary. [top]

Walk-through - A final inspection of a home to check for problems that may need to be corrected before closing . [top]

Warehouse Fee - Many mortgage firms must borrow funds on a short term basis in order to originate loans which are to be sold later in the secondary mortgage market (or to investors). When the prime rate of interest is higher on short term loans than on mortgage loans, the mortgage firm has an economic loss which is offset by charging a warehouse fee. [top]

Wraparound Mortgage - results when an existing assumable loan is combined with a new loan, resulting in an interest rate somewhere between the old rate and the current market rate. The payments are made to a second lender or the previous homeowner, who then forwards the payments to the first lender after taking the additional amount off the top [top]