Interest
Long term capital gains tax
Loan-to-Value Ratio
London InterBank Offered Rate LIBOR
Loan modification
Interest-only mortgage
Junior Lien
Loan note
Loan officer
Loan Estimate
Index
Lien
Lock
Improvement
This occurs when a lender agrees to change the original terms of a loan note to a more affordable payment structure for the borrower to avoid default. Common examples include a reduction in the loan amount, interest rate or loan term.
Lenders charge these fees for borrowing money. For a mortgage, these payments are included in the monthly mortgage payment.
Homeowners pay this form of income tax to the government on the proceeds of the sale of property. Usually, these taxes are triggered by the difference between the sales price and original purchase price the homeowner paid, and that the homeowner has owned more than one year. The tax rate is typically lower than the tax a borrower pays on regular income.
This is the ratio of the borrower's loan amount and the value of the property, usually measured by the purchase price or appraised value. Lenders use this ratio in its assessment whether to approve a borrower's loan. The higher the ratio, the higher the risk to the lender. For a ratio above 80 percent, lenders of conventional loans will require private mortgage insurance (PMI), to be paid by the borrower.
This employee or representative of a mortgage lender assists borrowers through the loan approval and underwriting process, ultimately helping them secure financing for a home purchase.The term is usually used interchangeably with loan originator.
Many lenders tie their rates to this rate. Lenders use this index to calculate a borrower's interest rate on ARMs. If this index rises, a borrower's adjustable interest rate will also rise. Large banks use this as the rate for short-term loans between each other.
The Consumer Financial Protection Bureau requires lender to provide loan estimates that combine the Good Faith Estimate and Truth in Lending disclosures. This rule goes into effect August 1, 2015.
This is the proper term for the legally binding instrument, a promissory note, signed by the borrower at closing that defines the loan amount, interest rate, loan term and other rights and obligations of the loan arrangement between the borrower and lender.
An indicator of current market conditions used to calculate a borrower's adjustable interest rate. A commonly used one is the one-year Treasury bill.
Permanent structures on a real estate property that presumably increase the property's utility and value.
Creditors with these are second in line for being paid back if the borrower cannot repay the loan and the first-in-line lender takes over the property. The creditor with one of these must yield to lien holders that hold a superior position before it can use the proceeds, if any remain, to satisfy the debt.
Monthly payments for these types of mortgage loans include only interest for a specified amount of time, usually from three to 10 years. After that, monthly payments include interest and principal amounts. This type of mortgage defers payment of the principal but does not eliminate it.
Lenders have the legal right to take over, or foreclose, a property if the owner doesn't repay his or her mortgage. That legal right to foreclose is found in this.
Borrowers ask their loan officer to do this to favorable interest rates for a loan in process. Doing this to a mortgage rate guarantees the borrower the interest rate for the loan. The borrower cannot backtrack and take advantage of lower interest rates that might become available after initiating this but before the borrower's closing.
