Glossary

An abbreviation meaning principal and interest. Principal and interest accounts for the majority of your mortgage payment.
The periodic amount of money to be paid by the borrower to cover interest and reduce the balance of a loan. Sometimes referred to as principal and interest, or P & I.
The periodic amount of money to be paid by the borrower to cover interest and reduce the balance of a loan. Sometimes referred to as principal and interest, or P & I.
Payment of the outstanding balance of a loan in full. Also, the amount required to pay the outstanding balance in full.
An abbreviation meaning principal and interest. Principal and interest accounts for the majority of your mortgage payment.
Any property that is not real property or is not permanently fixed to land. Cash, furniture and cars are all examples of personal property.
An acronym for principal, interest, taxes and insurance. May also be referred to as the â??monthly housing expenseâ?? or â??monthly mortgage payment.â??
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 owners.
A legal document authorizing one person to act on another's behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.
A procedure in which the investor allows a borrower to avoid foreclosure by selling the property, typically for less than the amount that is owed to the lender.
A request for preapproval is an application for a home purchase loan in which the lender, after a comprehensive analysis of the creditworthiness of the applicant, issues a written commitment to the applicant for a specific time period to extend a home purchase loan up to a specified amount. The written commitment may be subject to only a limited set of conditions, including: 1) the identification of a suitable property, 2) verification that no material change has occurred in the applicantâ??s financial condition or creditworthiness prior to closing, 3) limited conditions ordinarily attached to a traditional home mortgage application, such as certification of a clear termite inspection.
A formal or informal arrangement between a lender and a borrower where the lender agrees to offer special terms (such as a reduction in the rate or closing costs) for a future refinancing as an inducement for the borrower to enter into the original mortgage transaction.
An amount paid to reduce the principal balance of a loan before the principal is due.
A penalty assessed on some loans if paid off early. This is a lump-sum amount due and payable in addition to the loan balance and is usually limited to the early years of a mortgage. Prepayment penalties, if applicable, must be stated in the Note. Not all loans have prepayment penalties. Generally, a borrower chooses a prepayment penalty in exchange for a discounted rate.
The process of determining how much money a prospective home buyer might be eligible to borrow before he or she applies for a loan. A prospective borrower provides financial and other information (such as employment history and proposed collateral) and is able to find out how much he or she could potentially borrow for the purchase of a home. A prequalification provides an estimate of a loan amount and does not constitute the offer of a loan. Compare with preapproval.
The applicant whose name appears first on the application.
The place where a borrower resides most of the time.
The interest rate that lenders charge on short-term loans to creditworthy customers. Changes in the prime rate influence changes in other rates, including mortgage interest rates.
The amount of money borrowed or remaining unpaid on a loan. The part of the monthly payment that reduces the remaining balance of a mortgage.
The Principal is the amount of money borrowed on a loan. The Interest is the charge paid for borrowing money. Principal and interest accounts for the majority of your mortgage payment.
Four potential components of a monthly mortgage payment. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the charge for borrowing the money. Taxes and insurance refer to the amounts that may be paid into an escrow account each month to pay for future property taxes and mortgage and hazard insurance.
The unpaid portion of the loan amount. The principal balance does not include interest or any other charges.
Portion of your monthly payment that reduces the principal balance of a home loan. This term also refers to prepayments you make to the principal balance.
A fee charged to cover the administrative costs of processing your loan request.
A written promise to repay a specified amount over a specified period of time.
The current value of a property as determined by an appraisal or other method of valuation. Also known as appraisal or appraised value.
A meeting in an announced public location to sell property to repay an accelerated mortgage debt due to the borrower's default. See also foreclosure.
A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.
The total amount paid by a buyer to a seller for the purchase of property.
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