Aâ?? How much do you need? N__________. B-- Balance of your existing mortgages, combined. N___________. C-- The estimated value of your Home N___________. The calculation: (A + B)/ C = CLTV CLTV in most cases should not exceed .85 or as a percentage: 85%. The amount you wish to borrow, added to your combined mortgages, should not exceed 85% of your estimated home value.
A provision in a loan that gives the lender the right to accelerate the debt and require full payment of the loan immediately at the end of a specified period or for a specified reason.
A person's present income and anticipated future earnings. Lenders consider this when determining if a borrower will be able to make payments on a loan.
The amount of cash and other liquid assets a person has.
The cost of an improvement made to extend the useful life of a property or to add to its value, such as adding a room. The cost of repairing a property is not a capital expenditure. Capital expenditures are appreciated over their useful life; repairs are subtracted from income for the current year.
Any structure or component erected as a permanent improvement to real property that adds to its value and useful life. See also capital expenditure.
The amount financed under a lease agreement.
Borrower funds that are available to cover down payment and closing costs. If lending guidelines require the borrower to have cash reserves at the time the loan closes or that the down payment come from specified sources, the borrower's cash available for closing does not include cash reserves or money from other sources.
The amount a home buyer needs in cash at the closing of the loan. Typically, this includes down payment and closing costs.
The history of all of the documents affecting title to a parcel of real property, starting with the earliest existing document and ending with the most recent.
Titles that are marketable and free of liens or disputed legal questions as to ownership of the property.
The Close step is the date you will sign and execute your new loan documents.
A status of â??Closedâ?? indicates that no further action is required on this item.
The date that the proceeds of a loan are disbursed. See also origination date.
Fees paid at or prior to the closing of your loan. They include the expenses incurred in obtaining the loan and transferring the ownership of the property from the seller to the buyer.
The Closing Date is the date you will sign your new loan documents.
An accounting of funds given to both buyer and seller before real estate is sold.
An outstanding claim or lien, revealed by a title search, that adversely affects the owner's title to real estate. Usually clouds on title cannot be removed except by a quitclaim deed, release or court action.
An additional person who assumes equal responsibility for repayment of a loan and is fully obligated under the terms of the loan. This person also has equal rights to the proceeds of the loan. See also co-signer.
A second person who signs your loan and assumes equal responsibility for payment of the loan but receives no benefit from the loan proceeds. See also co-borrower.
A sharing of insurance risk between the insurer and the insured. Coinsurance depends on the relationship between the amount of the policy and a specified percentage of the actual value of the property insured at the time of the loss.
An asset, such as a car or a home, used for securing the repayment of a loan. The borrower risks losing the asset if the loan is not repaid.
The efforts used to bring a delinquent loan current and, if necessary, to file legal papers and notices to proceed with foreclosure.
The outstanding balance of all mortgages secured by the same property. Used to determine the total available equity when considering the appraised value of the property less total combined or outstanding liens.
A formal notification from a lender stating that the borrower's loan has been conditionally approved and specifying the terms under which the lender agrees to make the loan. Also known as a loan commitment.
Payments required of individual unit owners in a planned unit development (PUD) project for additional capital to defray homeowners association costs and expenses and to repair, replace, maintain, improve or operate the common areas of the project.
Those portions of a building, land and amenities owned (or managed) by a planned unit development (PUD) project's homeowners association (or a cooperative project's cooperative corporation) that are used by all of the unit owners. Common areas include swimming pools, tennis courts and other recreational facilities, as well as common corridors of buildings, parking areas, means of entry and exit, etc. The unit owners share in the common expenses of their operation and maintenance.
An abbreviation for "comparable properties" used for comparative purposes in the appraisal process. Comparables are properties like the property under consideration; they have reasonably the same size, location and amenities and have recently been sold. Comparables help the appraiser determine the approximate fair market value of the subject property.
Interest charged on the principal balance and any accrued and unpaid interest.
(1) Declaration that a building is unfit for use or is dangerous and must be destroyed; (2) taking of private property for a public use (such as a park, street or school) through an exercise of the right of eminent domain.
A building or development with many housing units where each person owns his or her individual unit and shares an interest in the common areas and facilities of the entire project. You go through the same process of buying a condo as you do when buying a house and have a deed to and a mortgage on your particular unit. You also pay property taxes on your unit.
A loan for financing the cost of home construction. The lender makes payments to the builder at periodic intervals as the work progresses.
An organization that prepares reports that lenders use to determine a potential borrower's credit history. The agency obtains data for these reports from a credit repository as well as from creditors such as mortgage lenders, credit card companies, etc.
A specified condition in a sales contract that must be satisfied before the home sale can occur. When buying a home, the two most common contingencies are that the house must pass inspection and that the borrower must be approved for a loan.
An oral or written agreement to do or not do something.
To transfer or deliver title to property from one to another by deed or contract. When an item becomes a part of the transfer of title, it is "conveyed" with the property.
A naira-value analysis that compares the benefits of owning a home to the costs. Some homeownership benefits may include: the appreciation that may occur in the value of your home over time, building your home equity. Homeownership costs may include: interest you pay on the loan; closing costs, property taxes and homeowners insurance premiums; and maintenance costs, including those associated with normal wear and tear and weathering.
A new offer made by a buyer, seller or lender in response to a previous offer that has been rejected.
A promise in a security instrument that requires or prevents certain uses of the property that, if violated, may result in loss or foreclosure of the property.
An arrangement in which a borrower receives money or something of value in exchange for a promise to repay the lender on specified terms at a later date.
An organization that gathers, records, updates and stores financial and public records of individuals who have been granted credit and provides this information to lenders and other authorized users for a fee.
A record of an individual's debts and payment habits over time. It helps a lender determine whether a potential borrower is a good business risk.
The maximum amount you can borrow under a line of credit.
A numeric expression of creditworthiness based upon an individual's present financial condition and past credit history.
A record of an individual's debts and payment habits prepared by a credit reporting agency. It helps a lender determine whether a potential borrower is a good credit risk.
An organization that gathers, records, updates and stores financial and public records of individuals who have been granted credit and provides this information to lenders and other authorized users for a fee.
The likelihood that a borrower will pay their obligations as agreed. Borrowers who pay as agreed pose less credit risk to lenders.
A number that rates the quality of an individual's credit. Credit reporting agencies calculate this number, often with the assistance of computer systems, as part of the process of assigning rates and terms to the loans they make. The number helps predict the relative likelihood that a person will repay a credit obligation, such as a mortgage loan. In general, the higher your credit score, the more likely you are to be approved for and to pay a lower interest rate on a loan.
A person or business from whom you borrow or to whom you owe money.
The likely ability of a borrower to repay debt.
Total interest accrued.
A payment that reduces the principal balance of a loan.
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