A

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.

Ceiling
The maximum allowable interest rate of an adjustable rate mortgage.

Certificate of Eligibility
Document issued by the Veterans Administration to qualified veterans which verifies a veteran's eligibility for a VA guaranteed loan. Obtainable through local VA office by submitting form DD-214 (Separation Paper) and VA form 1880 (request for Certificate of Eligibility).

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.

Certificate of Veteran Status
FHA form filled out by the VA to establish a borrower's eligibility for an FHA Vet loan. Obtainable through local VA office by submitting form DD 214 (Separation Paper) with form 26-8261a (request for certificate of veteran status).

Chain of Title
The chronological order of conveyance of a property from the original owner to the present owner.

Closing (or Settlement)
The act of transferring ownership of a property from a seller to a buyer in accordance with a sales contract or the process of completing the loan transaction by signing and recording loan documents and disbursing loan funds.

Closing Costs
Costs for services that must be performed before your loan can be initiated. Examples include title fees, recording fees, appraisal fee, credit report fee, pest inspection, attorney's fees, and surveying fees.

COFI
See Cost of Funds Index.

Collateral
Assets (such as your home) pledged as security for a debt.

Commission
Money paid to a real estate agent or broker for negotiating a real estate or loan transaction.

Commitment
A promise to lend and a statement by the lender of the terms and conditions under which a loan is made.

Condominium
Ownership of individual units in a multi-unit structure, combined with joint ownership of commonly used property. Homeowner's association dues are included in the total monthly mortgage payment for qualifying purposes.

Conforming Loan
A mortgage loan which meets all requirements to be eligible for purchase by federal agencies such as FNMA and FHLMC. The maximum conforming loan amount is $300,700 for a one-unit property ($379,050 in Alaska, Hawaii and the Virgin Islands).

Consumer Reporting Agency
A company which regularly gathers, files and sells information to creditors to facilitate their decisions to extend credit.

Contingency
A condition which must be satisfied before a contract is legally binding.

Contract of Sale
The agreement between the buyer and seller on the purchase price, terms, and conditions of a sale.

Conventional Loan
Loans that are not made under any government housing program; they are not subject to the restrictions of government housing programs, such as loan size limits.

Conversion Clause
A provision in some ARMs that allows you to change an ARM to a fixed-rate loan, usually after the first adjustment period. The new fixed rate will be set at current rates, and there may be a charge for the conversion feature.

Convertible ARMs
A type of ARM loan with the option to convert to a fixed-rate loan during a given time period.

Conveyance
The document used to effect a transfer, such as a deed, or mortgage.

Cost of Funds Index (COFI)
An index of the weighted-average interest rate paid by savings institutions for sources of funds, usually by members of the 11th Federal Home Loan Bank District.

Credit Bureau
A credit bureau is a clearinghouse for credit history information. Credit grantors provide the bureau with factual information on how their credit customers pay their bills. The bureau regularly assembles this information, along with public record information obtained from courthouses around the country, into a "file" on each consumer.

Credit Report
A report detailing the credit history of a prospective borrower that's used to help determine borrower creditworthiness.

Credit Score
A statistical method of assessing your creditworthiness. Your credit card history; amount of outstanding debt; the type of credit you use; negative information such as bankruptcies or late payments; collection accounts and judgments; too little credit history and too many credit lines with the maximum amount borrowed are all included in credit-scoring models to determine your credit score.

-------------------------------------------------------------------------

D

Debt Consolidation Loan
When a borrower wants to include current debts (e.g., credit card balances, car balances, etc.) being paid monthly in the refinance of their mortgage loan. The loan proceeds can be paid directly to the bills indicated by the borrower and the borrower will have one payment (the mortgage payment) as opposed to paying the mortgage payment and various other payments.

-------------------------------------------------------------------------

E

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

ECOA
See Equal Credit Opportunity Act.

Equifax
One of the three largest credit bureaus in the United States.

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 total debt obligations against the property. On a new mortgage loan, the down payment represents the equity in the property.

Escrow
Lenders often set up an account, called an escrow or impound account, to hold tax and insurance portions of your monthly mortgage payment. At closing, the lender collects sufficient money to establish the necessary reserves in this account. The reserves, plus the monthly deposits, are held until the lender uses the funds to pay your tax and insurance bills.

Escrow Account
An account held by the lender to which the borrower pays monthly installments, collected as part of the monthly mortgage payment, for annual expenses such as taxes and insurance. The lender disburses escrow account funds on behalf of the borrower when they become due. Also known as Impound Account.

Escrow Agent
A person with fiduciary responsibility to the buyer and seller, or the borrower and lender, to ensure that the terms of the purchase/sale or loan are carried out.

Experian
One of the three largest credit bureaus in the United States.
Estimated Closing Fees
An estimate of the fees that must be paid on or before the closing date by the buyer and/or seller for services, taxes and items necessary to obtain a mortgage. These fees average between 2% and 5% of the loan amount and vary by lender, property location and type of mortgage.

-------------------------------------------------------------------------

F

Fair, Isaac and Co.
The company that invented credit scoring software.

Fannie Mae
A common nickname for the Federal National Mortgage Association.

FDIC
See Federal Deposit Insurance Corporation.

Federal Deposit Insurance Corporation (FDIC)
Independent deposit insurance agency created by Congress to maintain stability and public confidence in the nation's banking system.

Federal Home Loan Mortgage Corporation (FHLMC, or Freddie Mac)
This agency buys loans that are underwritten to its specific guidelines. These guidelines are an industry standard for residential conventional lending.

Federal Housing Administration (FHA)
A federal agency within the Department of Housing and Urban Development (HUD), which insures residential mortgage loans made by private lenders and sets standards for underwriting mortgage loans.

Federal National Mortgage Association (FNMA, or Fannie Mae)
This agency buys loans that are underwritten to its specific guidelines. These guidelines are an industry standard for residential conventional lending.

Fee Simple
Absolute ownership of real property.

FHA
See Federal Housing Administration.

FHA Loans
Fixed- or adjustable-rate loans insured by the U.S. Department of Housing and Urban Development. FHA loans are designed to make housing more affordable, particularly for first-time homebuyers. FHA loans typically permit borrowers to buy a home with a lower down payment than conventional loans. With FHA insurance, eligible buyers can purchase a home with a down payment as little as 3% of the appraised value or the purchase price, whichever is lower. FHA borrowers typically are required to participate in a face-to-face meeting with their lender or a government approved mortgage counselor prior to closing on a new mortgage loan. The current FHA loan limits vary depending on home type and home location.

FHLMC
See Federal Home Loan Mortgage Corporation.

FICO
The most common credit-scoring model used by lenders, it is also known as a Fair, Isaac score. Your FICO can range from 200 to 900. According to this model, the higher your score, the less likely you are to default on your loan.
Filing Fees
The amount charged by public officials in your area for recording your mortgage and other documents.

Finance Charge
Interest or fees charged to a credit customer. Your finance charge is the total interest you pay over the entire life of the loan, assuming you keep the loan to maturity, as well as all prepaid finance charges. If you pre-pay any principal during your loan, your monthly payments remain the same, but your total finance charge is reduced.

First Mortgage
A mortgage which is in first lien position, taking priority over all other liens. In the case of a foreclosure, the first mortgage will be repaid before any other mortgages.

Fixed Rate
An interest rate which is fixed for the term of the loan.

Fixed-Rate Loans
Fixed-rate loans have interest rates that do not change over the life of the loan. As a result, monthly payments for principal and interest are also fixed for the life of the loan. Fixed-rate loans typically have 15-year or 30-year terms. With a fixed-rate loan, you will have predictable monthly mortgage payments for as long as you have the loan.
Floating Rate
Until you request to secure a lender's quoted interest rate, the interest rate will continue to change, or float, due to market fluctuations. You may choose to float your rate up until the time your lender contacts you to schedule your closing. At this time, an interest rate must be secured to prepare your closing documents.

Flood Insurance
Insurance that compensates for physical damage to a property by flood. Typically not covered under standard hazard insurance.

Flood Certification Fee
Federal law requires that you obtain flood hazard insurance if your property lies in a flood zone. As part of our evaluation of your property, we engage a flood determination company to tell us whether or not your house lies in a flood zone. The flood certification fee covers the cost. If your house is located in a flood zone, you are required to purchase Flood Insurance.
Flood Life of Loan Coverage
Flood zone determinations may change from time to time. The "Life of Loan Coverage" fee allows us to track any changes in your property's flood zone status over the life of your loan.

FNMA
See Federal National Mortgage Association.

Forbearance
The act by the lender of refraining from taking legal action on a mortgage loan that is delinquent.

Foreclosure (or Repossession)
Legal process by which a mortgaged property may be sold to pay off a mortgage loan that is in default.

Freddie Mac
A common nickname for the Federal Home Loan Mortgage Corporation.

-------------------------------------------------------------------------

G

Good Faith Estimate
Written estimate of the settlement costs the borrower will likely have to pay at closing. Under the Real Estate Settlement Procedures Act (RESPA), the lender is required to provide this disclosure to the borrower within three days of receiving a loan application.
Gross Income
Total income before taxes or expenses are deducted.

Grace Period
Period of time during which a loan payment may be made after its due date without incurring a late penalty. The grace period is specified as part of the terms of the loan in the Note.

Government Recording Fee
We pay this fee to your local county recording office for recording our mortgage lien, and, in the event of a purchase transaction, the deed that transfers title. Fees for recording vary by county and are set by state and local governments.

Guideline Ratios
There are two guideline ratios used to qualify you for a mortgage. The first is called the front-end ratio, or top ratio, and is calculated by dividing your new total monthly mortgage payment by your gross monthly income. The second is called the back-end ratio, or bottom ratio, and is equal to your new total monthly mortgage payment plus your total monthly debt divided by your gross monthly income.

-------------------------------------------------------------------------

H

Hazard Insurance
Protects the insured against loss due to fire or other natural disaster in exchange for a premium paid to the insurer.

Home Improvement Loan
A borrower decides to make improvements to their home (e.g., build a garage, add another bathroom, upgrade the kitchen, etc.). The borrower can use the equity built up in a property to refinance or obtain a second mortgage to pay for these improvements.

Homeowner's Insurance
Just like you insure your automobile to protect against theft and damage, you insure your home. Homeowner's Insurance is required by all lenders to protect their investment and must be obtained before closing. In most cases, coverage must be equal to the loan balance or the value of the home.

Housing and Urban Development
See HUD.

HUD
Housing and Urban Development. A U.S. government agency established to implement federal housing and community development programs; oversees the Federal Housing Administration.

HUD-1 Uniform Settlement Statement
A standard form which itemizes the closing costs associated with purchasing a home or refinancing a loan.

-------------------------------------------------------------------------

I

Impound Account
An account held by the lender to which the borrower pays monthly installments, collected as part of the monthly mortgage payment, for annual expenses such as taxes and insurance. The lender disburses impound account funds on behalf of the borrower when they become due. (Also known as Escrow Account.)

Index
Most lenders generally tie adjustable rate mortgage loan (ARM) interest rate changes to an "index." An index is a widely published rate such as LIBOR, T-Bill, or 11th District Cost of Funds (COFI). Lenders use these indices to establish the interest rates charged on mortgage loans. For ARMs, a predetermined margin is added to the index to compute the interest rate adjustment.

Initial Cap
Consumer safeguard which limits the amount the interest rate on an adjustable rate mortgage can change during the first adjustment period. See Caps.

Initial Rate
The rate charged during the first interval of an ARM loan.
Insurance
This requirement describes the type(s) of insurance required for your loan. Private mortgage insurance may be required in addition to what is indicated.

Interest
Charge paid for borrowing money, calculated as a percentage of the remaining balance of the amount borrowed.

Interest Rate
The annual rate of interest on the loan, expressed as a percentage of 100.

Interest Rate Cap
Consumer safeguards which limit the amount the interest rate on an ARM loan can change in an adjustment interval and/or over the life of the loan. For example, if your per-period cap is 1% and your current rate is 7%, then your newly adjusted rate must fall between 6% and 8% regardless of actual changes in the index.

-------------------------------------------------------------------------

J

Joint Liability
Liability shared among two or more people, each of whom is liable for the full debt.

Joint Tenancy
A form of ownership of property giving each person equal interest in the property, including rights of survivorship.

Jumbo Loan
A mortgage larger than the $300,700 limit set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.

Junior Mortgage
A mortgage subordinate to the claim of a prior lien or mortgage. In the case of a foreclosure, a senior mortgage or lien will be paid first.

-------------------------------------------------------------------------

K

No K terms.

-------------------------------------------------------------------------

L

Late Charge
Penalty paid by a borrower when a payment is made after the due date.

Lender
The bank, mortgage company, or mortgage broker offering the loan.
Lender Processing Fee
The Lender Processing Fee covers the cost of analyzing your loan application and compiling and packaging the necessary supporting documentation to close your loan.

LIBOR (London Interbank Offered Rate)
The interest rate charged among banks in the foreign market for short-term loans to one another. A common index for ARM loans.

Lien
A legal claim by one person on the property of another for security for payment of a debt.

Lifetime (or Overall) Cap
Consumer safeguard which limits the amount the interest rate on an adjustable rate mortgage loan (ARM) can change over the life of the loan. See Caps.

Loan Application
An initial statement of personal and financial information required to apply for a loan.

Loan Application Fee
Fee charged by a lender to cover the initial costs of processing a loan application. The fee may include the cost of obtaining a property appraisal, a credit report, and a lock-in fee or other closing costs incurred during the process or the fee may be in addition to these charges.

Loan Origination Fee
Fee charged by a lender to cover administrative costs of processing a loan.

Loan-to-Value Ratio (LTV)
The percentage of the loan amount to the appraised value (or the sales price, whichever is less) of the property.

Lock or Lock-In
A lender's guarantee of an interest rate for a set period of time. The time period is usually that between loan application approval and loan closing. The lock-in protects you against rate increases during that time.

-------------------------------------------------------------------------

M

Manufactured Home
A factory assembled residence built in units or sections that are transported to a permanent site and erected on a foundation.

Market Value
The theoretical highest price a buyer, willing but not compelled to buy, would pay, and the lowest price a seller, willing but not compelled to sell, would accept.

Maximum Cash Out
The maximum amount of money you are allowed to get back from your mortgage transaction based on the loan information provided and the amount of equity you have in your home.

Margin
The percentage difference between the index for a particular loan and the interest rate charged. This is a number predetermined by the lender.

Mortgage
A legal document by which real property is pledged as security for the repayment of a loan.

Mortgage Banker
An individual or company that originates and/or services mortgage loans.

Mortgage Broker
An individual or company that arranges financing for borrowers.

Mortgage Insurance
Insurance to protect the lender in case you default on your loan. With conventional loans, mortgage insurance is generally not required if you make a down payment of at least 20% of the home's appraised value. (Note, however, that FHA and VA loans have different insurance guidelines.)

Mortgage Loan
A loan for which real estate serves as collateral to provide for repayment in case of default.

Mortgage Note
Legal document obligating a borrower to repay a loan at a stated interest rate during a specified period of time. The agreement is secured by a mortgage or deed of trust or other security instrument.

Mortgagee
The lender in a mortgage loan transaction.

Mortgagor
The borrower in a mortgage loan transaction.

-------------------------------------------------------------------------

N

Negative Amortization
A loan payment schedule in which the outstanding principal balance of a loan goes up rather than down because the payments do not cover the full amount of interest due. The monthly shortfall in payment is added to the unpaid principal balance of the loan.

Non-Assumption Clause
A statement in a mortgage contract forbidding the assumption of the mortgage by another borrower without the prior approval of the lender.

Note
Legal document obligating a borrower to repay a loan at a stated interest rate during a specified period of time. The agreement is secured by a mortgage or deed of trust or other security instrument.

Notice of Default
Written notice to a borrower that a default has occurred and that legal action may be taken.

-------------------------------------------------------------------------

O

Origination Fee
Fee charged by a lender to cover administrative costs of processing a loan.

Origination Points
A fee that is charged by the lender to originate your loan. The fee is typically set up as a percentage of the loan amount (e.g., a 1-point origination fee is equal to 1% of the loan amount).

-------------------------------------------------------------------------

P

Payment Cap
Consumer safeguards which limit the amount monthly payments on an adjustable-rate mortgage may change. Since they do not limit the amount of interest the lender is earning, they may cause negative amortization.
Payment Schedule
The method for disclosing your payment schedule varies by loan type. For fixed rate loans, this section indicates what your required monthly payment will be throughout the life of your loan. The payment schedule for VA, FHA, one-time MIP and uninsured conventional loans should also indicate a fixed monthly payment. The payment schedule for fixed rate insured loans might gradually decrease over time due to a declining insurance premium. For adjustable rate loans, payment schedules vary by loan type and are based on conservative assumptions of future interest rates.

Per Diem Interest
Interest calculated per day. (Depending on the day of the month on which closing takes place, you will have to pay interest from the date of closing to the end of the month. Your first mortgage payment will probably be due the first day of the following month.)

Periodic Cap
Consumer safeguard which limits the amount the interest rate on an adjustable rate mortgage (ARM) can change in an adjustment interval. See Caps.

PITI
Abbreviation for Principal, Interest, Taxes and Insurance, the components of a monthly mortgage payment.
Planned Unit Development (PUD)
A Planned Unit Development (PUD) is a project or subdivision that consists of common property and improvements that are owned and maintained by an owner's association for the benefit and use of individual units within the project. For a project to qualify as a PUD, the owner's association must require automatic, non-severable membership for each individual unit owner and provide for mandatory assessments.

Points (or Discount Points)
Points are an up-front fee paid to the lender at the time that you get your loan. Each point equals one percent of your total loan amount. Points and interest rates are inherently connected: in general, the more points you pay, the lower the interest rate you get. However, the more points you pay, the more cash you need up front since points are paid in cash at closing.

Power of Attorney
Legal document authorizing one person to act on behalf of another.

Pre-approval
The process of determining how much money a prospective homebuyer or refinancer will be eligible to borrow prior to application for a loan. A pre-approval includes a preliminary screening of a borrower's credit history. Information submitted during pre-approval is subject to verification at application.

Prepaid Expenses
Taxes, insurance and assessments paid in advance of their due dates. These expenses are included at closing.

Prepaid Interest
Interest that is paid in advance of when it is due. Typically charged to a borrower at closing to cover interest on the loan between the closing date and the first payment date.

Prepayment
Full or partial repayment of the principal before the contractual due date.

Prepayment Penalty
Fee charged by a lender for a loan paid off in advance of the contractual due date.

Prepayment Interest
Prepaid Interest is interest on your new mortgage that is paid at closing. The amount of interest varies from 0 to 30 days because it is calculated from the date of closing to month’s end. For example, if the loan closed on March 20th, prepaid interest is owed from March 20th through March 31st. A normal monthly principal and interest payment covers interest due for the previous month. If the loan closed on March 20th, the first payment is due May 1st. The May 1st payment covers interest due for the month of April.

Pre-qualification
The process of determining how much money a prospective homebuyer will be eligible to borrow prior to application for a loan. Information submitted during pre-qualification is subject to verification at application.

Principal
The amount of debt, not counting interest, left on a loan.

Principal and Interest (P&I) Payment
Principal and Interest (P&I) is the dollar amount required to repay the loan. All interest is calculated on the current balance owing. The principal reduces the remaining balance of a mortgage.

Private Mortgage Insurance (PMI)
Insurance to protect the lender in case you default on your loan. With conventional loans, mortgage insurance is generally not required if you make a down payment of at least 20% of the home's purchase price. (Note, however, that FHA and VA loans have different insurance guidelines.)

Property Taxes
Property Taxes are assessed on the property by the local government (e.g., city, county, village or township) and are based on the property’s market value. These taxes are used for various services provided to the property owner, including police and fire department services, garbage pickup and snow removal.

Purchase Agreement
Contract signed by buyer and seller stating the terms and conditions under which a property will be sold.

-------------------------------------------------------------------------

Q

No Q terms.

-------------------------------------------------------------------------

R

Real Financing Cost
The real financing cost is a consumer-oriented rate that takes into account the projected amount of time you tell us you will actually have the loan, as well as the specific costs, fees, and potential rate changes associated with it. The fees and costs are distributed over the time you plan to be in the house, allowing you to do an apples-to-apples comparison of a variety of loan types. The real financing cost is not the APR. The APR assumes that you keep your loan for the entire term (e.g. 30 years for a 30 year fixed loan) and includes only some of your loan fees. The total financing cost takes into account all of your closing costs associated with your loan and also how long you plan to be in your house.

Real Property
Land and any improvements permanently affixed to it, such as buildings.

Reconveyance
The transfer of property back to the owner when a mortgage loan is fully repaid.

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

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

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

Rent Fee
If you are living with a relative or friend without paying rent, this is considered "rent free."

Requested Cash Out
The amount of money you request to get back from your mortgage transaction. Remember your closing costs and escrows are subtracted from this amount.

RESPA
Real Estate Settlement Procedures Act. RESPA is a federal law that gives consumers the right to review information about loan settlement costs. The law gives you the right to review this information after you apply for a loan, and again at loan settlement. The law only obliges lenders to provide these settlement costs after application.

Right to Rescission
Under the provisions of the Truth-in-Lending Act, the borrower's right, on certain kinds of loans, to cancel the loan within three days of signing a mortgage.

-------------------------------------------------------------------------

S

Sales Agreement
Contract signed by buyer and seller stating the terms and conditions under which a property will be sold.

Sales Contract
A contract by which the buyer and seller agree to the terms of the sale of a property. Also referred to as Agreement of Sale and Earnest Money Contract.

Second Mortgage
An additional mortgage placed on a property that has rights that are subordinate to the first mortgage.

Security
A property that serves as collateral for a debt. This refers to the address of the property being pledged as security for your loan.

Settlement (or Closing)
The settlement or closing is the conclusion of your real estate transaction. It includes the delivery of your security instrument, signing of your legal documents and the disbursement of the funds necessary to the sale of your home or loan transaction (refinance).

Settlement Costs
Also known as closing costs, these costs are for services that must be performed before your loan can be initiated. Examples include title fees, recording fees, appraisal fee, credit report fee, pest inspection, attorney's fees, taxes, and surveying fees.

Settlement Cost (HUD guide)
HUD - published booklet that provides an overview of the lending process, and that is given to consumers after completing loan application.

Single Family
A residential structure designed to only include one dwelling.

Site Condominium
A single-family residence that is detached and characterized as a site condominium by the way it is plotted by the builder.

Subject Property
The home that you intend to obtain the mortgage on is called the subject property. If you are doing a refinance, the subject property is typically the address of the home you are living in now. If you want to refinance your second home, list the address of that home as the subject property. If you are purchasing a home, the subject property is the address of the home you are buying.

Survey
A measurement of land, prepared by a licensed surveyor, showing a property's boundaries, elevations, improvements, and relationship to surrounding tracts.

Survey Fee
A survey is a sketch of your property that shows the boundary lines of your lot and details any encroachments between you and your neighbors. The survey fee covers the cost of the survey.

Sweat Equity
Value added to a property in the form of labor or services of the owner rather than cash.

-------------------------------------------------------------------------

T

Tax Impound
Money paid to and held by a lender for annual tax payments.

Tax Lien
Claim against a property for unpaid taxes.

Tax Sale
Public sale of property by a government authority as a result of non-payment of taxes.

Tax Service Fee
In some cases, we engage a third party to monitor and/or handle the payment of your property tax bills. The Tax Service Fee covers the cost of this service.

Term
The period of time between the beginning loan date on the legal documents and the date the entire balance of the loan is due.

Title
Document which gives evidence of ownership of a property. Also indicates the rights of ownership and possession of the property.

Title Company
A company that insures title to property.

Title Company Closing Fee
This fee is paid to the title insurance company that conducts your closing and handles the transfer of funds among the parties.

Title Insurance
Title Insurance protects a lender against any title dispute that may arise over a particular property. It is required to close on your home.

Title Insurance Premium
In order to determine that the property is properly owned and not subject to any unacceptable liens, we require a search of the local real estate records and a title insurance policy insuring the lender that there are no defects in title. The Title Insurance Premium covers the cost of the search and the insurance. The cost of title insurance varies both by state and by county.


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.

Title Search
Examination of municipal records to ensure that the seller is the legal owner of a property and that there are no liens or other claims against the property.

Third Party Fees
Fees paid to a third party for services requested by the lender on your behalf.

Total Payments
This is the total amount you pay over the life of the loan for principal, interest and prepaid finance charges, assuming you keep the loan to maturity and make only required monthly payments.

Trade Lines
Trade lines are your different credit accounts listed on your credit report.

Trans Union
One of the three largest credit bureaus in the United States.

Transfer Tax
Tax paid when title passes from one owner to another.

Truth-in-Lending Act
Federal law requiring written disclosure of the terms of a mortgage (including the APR and other charges) by a lender to a borrower after application. Also requires the right to rescission period.

-------------------------------------------------------------------------

U

Underwriting
In mortgage lending, the process of determining the risks involved in a particular loan and establishing suitable terms and conditions for the loan. The Underwriting Fee covers the cost of evaluating your entire loan package, including your credit report and appraisal, to determine whether we can approve your loan request.

Usury
Interest charged in excess of the legal rate established by law.

-------------------------------------------------------------------------

V

VA Loans
Fixed-rate loans guaranteed by the U.S. Department of Veterans Affairs. They are designed to make housing affordable for eligible U.S. veterans. VA loans are available to veterans, reservists, active-duty personnel, and surviving spouses of veterans with 100% entitlement. Eligible veterans may be able to purchase a home with no down payment, no cash reserve, no application fee, and lower closing costs than other financing options. The maximum VA loan amount is currently $203,000.

Variable Rate Mortgage
See Adjustable Rate Mortgage.

Variable Rate
Interest rate that changes periodically in relation to an index.

Verification of Deposit (VOD)
Document signed by the borrower's bank or other financial institution verifying the borrower's account balance and history.

Verification of Employment (VOE)
Document signed by the borrower's employer verifying the borrower's position and salary.

-------------------------------------------------------------------------

W

Waiver
Voluntary relinquishment or surrender of some right or privilege.

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

Wire Transfer Fee
On occasion, we transmit funds to you, your prior lender and/or the title insurance company conducting your closing via the inter-bank wire transfer system. This fee covers the cost of such transfer.

-------------------------------------------------------------------------

X

No X terms.

-------------------------------------------------------------------------

Y

No Y terms.

-------------------------------------------------------------------------

Z

Zoning Ordinances (or Zoning Regulations)
Local law establishing building codes and usage regulations for properties in a specified area.