Foreclosures : The legal process in which mortgaged property is sold to pay the loan of the defaulting borrower.
Fully indexed rate : The maximum interest on an ARM that can be reached at the first adjustment.
Gift letter : A letter from a relative stating that an amount will be gifted to the buyer and that said amount is not to be repaid.
Graduated payment mortgage : A residential mortgage with monthly payments that starts at a low level and increase at a predetermined rate.
Home warranty plan : Protection against failure of mechanical systems within the property and usually includes plumbing, electrical, heating and cooling systems and installed appliances.
Initial rate interest : The introductory interest rate on a loan, which signals that there may be right adjustments later on in the loan. Joint tendency : An equal, undivided ownership of property by two or more persons. Upon the death of any owner, their survivors take the descendants interest in the property.
List to sale ratio : The ratio between the price at which a property is listed and the amount for which it is actually sold.
Loan commitment : A written promise to make a loan for a specified amount on specific terms.
Loan to value ratio : The relationship between the amount of the mortgage and the appraised value of the property, typically expressed as a percentage of the appraised value.
Margin : The number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment. Mortgage insurance premium : The mortgage insurance required on FHA loans for the life of said loan. The MIP is either paid in cash at the time of closing or finance over the course as a line. Multiple listing service : The pooling in a central bureau of all properties for sale. The listings are held individually by members of a group of real estate brokers, with the agreement that any member of the group may sell the properties in the commission will be divided between the broker that sold the property in the broker who filed the listing. Pre-Approval : When a borrower has completed a loan application and provided debt, income and savings documentation which an underwriter has reviewed and approved. A pre-approval is usually done at a certain loan amount and making assumptions about what the interest rate will actually be at the time the loan is made, as well as estimates for the loan that will be paid for property taxes, insurance is others.
Repayment penalty or clause : A fee charged to a borrower who pays a loan in full before the stated due date.
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