Mortgage Glossary

DEED OF TRUST

 

The document used in some states instead of a mortgage. Title is conveyed to a trustee.

DEFAULT

Failure to make mortgage payments on a timely basis or to comply with other requirements of a mortgage.

DELINQUENCY

 

Failure to make mortgage payments on time.

DEPOSIT

This is a sum of money given to bind the sale of real estate, or a sum of money given to ensure payment or an advance of funds in the processing of a loan.

DISCOUNT

 

In an ARM with an initial rate discount, the lender gives up a number of percentage points in interest to reduce the rate and lower the payments for part of the mortgage term (usually for one year or less). After the discount period, the ARM rate usually increases according to its index rate.

DOWN PAYMENT

 

Part of the purchase price of a property that is paid in cash and not financed with a mortgage.

EFFECTIVE GROSS INCOME

 

A borrower’s normal annual income, including overtime that is regular or guaranteed. Salary is usually the principal source, but other income may qualify if it is significant and stable.

EQUITY

 

The amount of financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on the mortgage.

ESCROW

 

An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the deposit of funds or documents into an escrow account to be disbursed upon the closing of a sale of real estate.

ESCROW DISBURSEMENTS

 

The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.

ESCROW PAYMENT

 

The part of a mortgagor’s monthly payment that is held by the servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due.

FANNIE MAE

 

A government chartered, shareholder-owned company that is the nation's largest supplier of home mortgage funds.

FHA MORTGAGE

 

A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.

FICO SCORE

 

FICO® scores are the most widely used credit score in U.S. mortgage loan underwriting. This 3-digit number, ranging from 300 to 850, is calculated by a mathematical equation that evaluates many types of information that are on your credit report. Higher FICO® scores represent lower credit risks, which typically equate to better loan terms.

FIFTEEN-YEAR FIXED RATE MORTGAGE

 

This loan is fully amortized over a 15-year period and features constant monthly payment. It offers all the advantages of the 30-year loan, plus a lower interest rate- and you'll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn't that great.

FIRST MORTGAGE

 

The primary lien against a property.

FIXED INSTALLMENT

The monthly payment due on a mortgage loan including payment of both principal and interest.

FIXED-RATE MORTGAGE (FRM)

 

A mortgage interest that are fixed throughout the entire term of the loan.

FULLY AMORTIZED ARM

 

An adjustable-rate mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balance, at the interest accrual rate, over the amortization term.

907 E Strawbridge Ave Ste 101, Melbourne, FL 32901

NMLS # 1425046 | (321) 450-1886

VA: 6393340000 | FHA: 00392-0000-4

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Copyright Rejoice Mortgage Inc. 2020 This offer is made by Obsidian Financial Services Inc. d/b/a Rejoice Mortgage Inc. NMLS #1425046 1600 Sarno Rd. Suite 215, Melbourne, FL 32935, which is not affiliated with your current lender nor is it an agency of the federal government. Obsidian Financial Services Inc. d/b/a Rejoice Mortgage Inc. is approved by HUD/FHA, Fannie Mae, Freddie Mac and Ginnie Mae. This is not a government form. This is not a credit decision or a commitment to lend.This website is not authorized by the New York State Department of Financial Services. Until this website is authorized, no mortgage loan applications for properties located in New York will be accepted through this site.