General Warranty Deed:
A deed in which the seller agrees to insure the buyer and be responsible from further damage or losses, without cost to the buyer
(GNMA)Government National Mortgage Association:
A government agency arm of HUD, buying (VA) Veteran Administration Loans from lenders, i.e. Banks, credit unions, mortgage banks, and bundles them in specified amounts and sells them to investors
GFE:
Means “good faith estimate” a listing of all fees included in your closing cost. The GFE is one of the documents you sign at closing.
Grantor: The Seller
Grantee: The Buyer
Graduated Payment Mortgage:
A lower monthly loan payment which increases annually, until the loan is paid. It is useful to buyer with immediate high operating (Current Expense) budget with confirmed prospects for increasing earnings, who need low payments currently and in the immediate future, but can afford accelerated or increased payments in the future
Grandfather Clause or Contract:
The clause in a contract permitting the continued usage of a law as applied to a business, a contract or a function, which prior to the present time was outdated. The grandfather clause would allow predating the events associated with the current contract as though an inheritance that could not be excluded
Gift Letter:
An option sometimes available to the borrower when they need help with a down payment, the gift letter written by a benefactor relative or close friend must be an outright non-repayable gift.
Gross Monthly Income:
Total monthly income before deduction of taxes and insurance
Hazard and Fire Insurance:
Insurance against hazardous events like fire, theft, sewage and water spills other acts of nature except floods
Homeowners Association:
An association of homeowners in a particular subdivision, housing estate, apartment complex etc. Set up to organize chores like garbage collection, pool cleaning, security and neighborhood watch and collect dues on behalf of it’s members
Home Warranty Plan:
Extra Insurance to provide repair and replacement for appliances, heating systems, etc. This is mostly offered and purchased at closing and signing of documents of a house
Housing Code:
Issued by the government a set of values to guide the practice by various technicians, professional and engineers in completing and maintaining safety of a building. The code can cover standards of practice by engineers, electricians, Architects and builders
Housing Expense Ratio:
Used to determine the ability or inability of a potential borrower to fulfill the terms of a mortgage contract It is derived by computing total monthly income less all expense incurred in maintaining a home
Hypothecate:
Sometimes called the pledge or oath given to use a property as a security without having to actually give up the property. Also to theorize or speculate, that a collateral can hypothetically be seized and sold if there is serious log-jam in loan payments or contract fulfillments. During the term of the contract the borrower retains ownership of the property and the lender is assured peace of mind, knowing the borrower will not transfer the property to another owner before the mortgage contract is fulfilled.
HELOC(Home Equity Line of Credit):
Is the provision that allows you to borrow against the equity in your home or property
Home Inspection:
Is a detailed inspection of a property by a certified professional, for damages, and hazardous conditions which may prevent a new homeowner from moving in or disqualify the property from state safety codes
Improvements:
Any additions or replacements that add value to a building or property. An addition does not always add value for valuation purposes. For example replacing the roof on a building will not add value, whereas replacing the windows in the building will add value.
Impound Account:
A portion of monthly payment held by the lender or mortgage servicer to pay for to pay for insurance, fire, flood, and other fees as they become due monthly or quarterly
Income Property:
Real estate that generates rental income. Residential properties office buildings condominiums etc, that are not occupied as primary domicile by the one whose name appears on the mortgage loan documents, but is rented or leased by a non-owner or third party
Index:
A statistical formula, used to determine fluctuations in market trends
IRA-Individual Retirement Account:
A savings plan which allows you to allocate some of your income to a savings account and defer tax deduction till the date you withdraw from such savings account
Inflation:
To inflate, to cause to go up, inflation indicates a rise in price of services and goods in response to amount of suppliers, buyers, and resources available in a given market.
Interest:
An incentive fee or compensation paid to the lender for providing the mortgage loan.
Joint and Several Liabilities:
A clause or stipulation in a property contract that allows the creditor to request full payment of a debt from both the borrower and co-borrower. And I situations were there is more than two borrowers, regardless of percentage of liability or ownership stake all borrowers are liable for payment
Joint Tenancy:
In the event that multiple entities or persons (2 or more) own a property and each have equal or undivided interest in the property, say 50% each, for 2 people OR 1/3 each for 3 persons, at death of each and any of the owners, the survivors will have the total or equal stake in the deceased share
Judgment:
The decision of a court of law stating that a specific amount is the agreed upon payment that cancels a debt
Judgment Lien:
A court injunction stating the unpaid debt on a property, “Lien”, the restriction on burrowing and / or use of a sale proceed from a property
Jumbo Loan:
Standard Loan Amounts dependent on assets, liability, and income and approved for funding by Ginnie Mae in between $175,000 for individual and $350,000 for joint borrowers. A jumbo loan supersedes this amount and goes up to $450,000 to $1million and in special cases $2million to $10million. Of-course commercial properties are special cases and have limitless ceilings
Junior Mortgage:
On a scale of importance and loan repayment schedules, the junior loan can be repaid or refinanced only after the senior loan has been paid or refinanced. Junior loan is also called secondary loan. Loan rank is always allocated on a (FIFO) first in first out basis. First loan on the lenders books will be repaid first and so forth
(Installment) Land Contract:
A land or real estate sales or purchase contract where buyer continues use of the property land without possession of a ‘deed’, in hand until the full sale price has been paid. Seller hands over deed after full price is paid
Loan Modification:
A safety program designed to prevent disruption in home ownership and subsequent loss or foreclosure. Modification is loan specific and may include extension of loan payment term, monthly amount, and interest rates.
Lock in Rate:
A rate agreed upon by both lender and borrower, to lock interest rate for a definite term regardless of the fluctuations in market. Lock in agreements will almost always require a fee to be paid by the borrower.
Low Down Payment:
Down payment for mortgage loan lower than the normal industry average, Low down payment sometimes is allowed a borrower with A+ credit rating and a spotless credit payment history.
Lease with purchase option:
A contract to use property for a stated number of years for a fixed fee with the option to buy during or at the end of the lease term
Lessee:
The person or entity to whom property is leased or rented
Lessor:
The person OR entity who rents out the property
Lien:
A claim OR access restriction to a property, in lieu of debt payment, judgment awarded by the court OR unpaid tax or mortgage
Lis Penden’s:
If prior to closing, the realtor or the loan officer determines that the property has a litigation unresolved, the closing will be put on hold, a request will made for the lien OR litigation unresolved, the closing will be put on hold, a request will be made for the lien or litigation to be resolved
Loan Application:
A preliminary questionnaire, detailing the specific requirements about the borrower/s to be considered for loan approval, including property preferences, loan amount requested, credit capabilities, age and / or demographic history
Loan Origination fee’s or points:
Income paid to loan officer for assisting the borrower and the mortgage bank source an acceptable loan package. Different from loan buy-up or down
LTV:
Is a comparison of loan amount to property value. The loan to value ratio is a determining factor in the amount of loan approved for a borrower and is based on income, savings and loan amount requested. You may determine LTV by this formula: ( loan amount / property value )
Loan Servicing:
Collections and efforts to collect on the complete range of fees for mortgages, property taxes, insurance, escrows, and remitting these payments to investors and stakeholders
