| 1003 |
Uniform Residential Loan
Application. |
| 1008 |
Transmittal summary. |
| Acquisition indebtedness |
A
loan you get to build your house, a loan to buy your
house or any loan you take out to substantially improve
your home. Interest paid on such a loan is generally
tax-deductible. |
| AUS |
Automated Underwriting System; A computer
application that streamlines the processing of loan
applications and provides a recommendation to the lender
to approve the loan, or to refer it to manual
underwriting. |
| Back-end ratio |
The
total of all monthly financial obligations, divided by
the total gross monthly income. |
| CLTV |
Combined Loan-to-Value ratio; The overall
mortgage debt, expressed as a percentage of the home's
fair market value. This is calculated by dividing the
combined loan amount by the purchase price or the
appraised value.
Example: Someone with a $50,000 first mortgage
and a $20,000 home equity loan secured against a
$100,000 house would have a CLTV ratio of 70%.
Also known as TLTV; Total Loan-to-Value ratio.
|
| Encumbrance |
A
lien, charge or liability against a property that
affects or limits the ability to file a fee simple
title, or affects the value of the property, for
example, mortgages or easements |
| FHLMC |
Freddie Mac; Federal Home Loan Mortgage
Corporation. |
| FNMA |
Fannie Mae; Federal National Mortgage
Association. |
| Front-end ratio |
Total monthly primary housing expense divided by
the total gross monthly income. |
| HOA |
Homeowners' Association; An elected group that
governs a subdivision or planned community. It collects
fees from owners to maintain common areas and enforce
covenants, conditions and restrictions set by the
developer and the association itself. |
| Impounds/Escrows |
A
trust-like account established by a lender to accumulate
funds for payment of property taxes, hazard insurance,
and mortgage insurance. The funds are collected monthly
with the mortgage payment and the taxes/insurance are
paid, when due, by the lender. |
| Lien |
A
form of encumbrance which usually makes specific
property security for the payment of a debt or discharge
of an obligation, e.g., mortgages, judgments, taxes,
deed of trust, etc. One who holds a lien has the right
to sell the property to obtain the money, or to recover
the money when the property is sold. Valid liens are
filed with county recorder's offices. |
| LTV |
Loan-to-value ratio; The percentage of the home's
price that is paid for by a mortgage. This ratio is
calculated by dividing the loan amount by the purchase
price or the appraised value. Example: On a $100,000
house, if the buyer makes a $20,000 down payment and
borrows $80,000, the mortgage is 80% of the price of the
house. Therefore, the loan-to-value ratio is 80%. When
refinancing a mortgage, the loan-to-value ratio is
computed using the appraised value of the home, not the
sale price. |
| MI |
Mortgage Insurance; A policy that protects the
lender by paying the costs of foreclosing on a house if
the borrower stops paying the loan. Although mortgage
insurance protects the lender, it is paid monthly by the
borrower. Mortgage insurance usually is required if the
down payment is less than 20 percent of the sale price.
Also known as PMI; Private Mortgage Insurance.
|
| Payment Shock |
A
term used to describe the difference between a borrowers
current housing expense and the proposed housing
expense, when the proposed expense constitutes an
increase in monthly debt obligation for
housing. |
| P&I |
Principal and Interest; The portion of a
borrower's monthly mortgage payment that represents
repayment of the amount borrowed plus interest
charges. |
| PITI |
Acronym for the elements of a mortgage payment:
principal, interest, taxes and insurance, representing
the total sum of these components. This amount would
also include any HOA dues. |
| PMI |
Private Mortgage Insurance; See MI. |
| Prepaid Interest |
1. The amount of interest paid at the time of
closing to cover the period from the day the loan is
funded through the end of that month.
2. Interest that a borrower pays before it is
due, usually to save taxes. |
| PUD |
Planned Unit Development; A real estate project
in which individuals hold title to a residential lot and
home while the common facilities are owned and
maintained by a homeowners' association. |
| Single man/woman |
One
who has never been married. |
| TLTV |
Total loan-to-value ratio; See CLTV |
| Trust |
Trust Account; A legal entity set up to transfer
assets/property/income from the Trustor (creator) to the
beneficiary. The administration of the transfer is done
by a third party (Executor or Trustee). |
| Unmarried Man/woman |
One
who was married but is now divorced. |
| VOD |
Verification of Deposit; A form completed by a
banking institution to confirm a borrower's account
balances and history, including information such as the
current account balance, average balance, the date the
account was opened. |
| VOE |
Verification of Employment; A form completed by a
borrower's employer to confirm the borrower's employment
history and salary, including information such as the
borrower's rate of pay, current year-to-date earnings,
position and date of hire. |
| VOM |
Verification of Mortgage; A form completed by a
lender to confirm information regarding a borrower's
mortgage, including the borrower's payment history,
monthly payment, interest rate,
etc. |
Equal Housing Lender
