| lien |
| An encumbrance against
property for money due, either voluntary or involuntary. |
|
| lender |
| The bank, mortgage
company, or mortgage broker offering the loan. |
|
| LIBOR |
| LIBOR stands for London
Inter-Bank Offered Rate. This is a favorable interest rate offered for
U.S. dollar deposits between a group of London banks. There are several
different LIBOR rates, defined by the maturity of their deposit. The LIBOR
is an international index that follows world economic conditions. LIBOR-indexed
ARMs offer borrowers aggressive initial rates and have proven to be competitive
with popular ARM indexes like the Treasury bill. |
|
| lifetime cap |
| A provision of an
ARM that limits the highest rate that can occur over the life of the loan. |
|
| loan to value ratio |
| The ratio of the amount
of your loan to the appraised value. The LTV will affect programs available
to the borrower and generally, the lower the LTV the more favorable the
terms of the programs offered by lenders. |
|
| lock period |
| The amount of time
that a lender will guarantee a loan's interest rate. Once you've locked
in the interest rate on a loan, the lender will guarantee that rate for
a certain period of time, usually for 30, 45 or 60 days. |
|
| lock-in |
| A written agreement
guaranteeing the home buyer a specified interest rate provided the loan
is closed within a set period of time. The lock-in also usually specifies
the number of points to be paid at closing. |
|
| margin |
| The number of percentage
points a lender adds to the index value to calculate the ARM interest
rate at each adjustment period. A representative margin would be 2.75%. |
|
| mortgage |
| A legal document that
pledges a property to the lender as security for payment of a debt. |
|
| mortgage disability
insurance |
| A disability insurance
policy which will pay the monthly mortgage payment in the event of a covered
disability of an insured borrower for a specified period of time. |
|
| mortgage insurance (MI) |
| Insurance written
by an independent mortgage insurance company protecting the mortgage lender
against loss incurred by a mortgage default. Usually required for loans
with an LTV of 80.01% or higher. |
|
| mortgagee |
| The person or company
who receives the mortgage as a pledge for repayment of the loan. The mortgage
lender. |
|
| mortgagor |
| The mortgage borrower
who gives the mortgage as a pledge to repay. |
|
| no income verification |
| See "stated income." |
|
| non-conforming loan |
| Also called a jumbo
loan. Conventional home mortgages not eligible for sale and delivery to
either Fannie Mae (FNMA) or Freddie Mac (FHLMC) because of various reasons,
including loan amount, loan characteristics or underwriting guidelines.
Non-conforming loans usually incur a rate and origination fee premium.
The current non-conforming loan limit is $252,701 and above. |
|
| note |
| A written agreement
containing a promise of the signer to pay to a named person, or order,
or bearer, a definite sum of money at a specified date or on demand. |
|
| origination fee |
| A fee imposed by a
lender to cover certain processing expenses in connection with making
a real estate loan. Usually a percentage of the amount loaned, such as
one percent. |
|
| owner financing |
| A property purchase
transaction in which the property seller provides all or part of the financing. |
|
