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Foreclosure: When a borrower fails to meet the obligations agreed upon in the mortgage loan agreement and the lender repossesses the property in order to get the money they loaned to the borrower back.
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Escrow: A middleman account, usually with a title agency, that holds money and distributes the funds in a manner that both parties agree upon. Earnest money is often held in an escrow account, and some mortgage companies require borrowers to pay their pro
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Employment Verification: A lender requires employment verification of potential borrowers to verify their income and job security.
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RESPA- Real Estate Settlement Procedures Act: This states that borrowers must be informed in advance of all of the charges for closing costs of the loan. There is usually a meeting where the borrower sits down with the lending agent while the agent review
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Qualifying Ratios: Lenders look at asset-to-debt and other ratios in order to determine exactly how much the borrower can financially afford as a maximum mortgage amount. The more you owe in debt, the less you will be able to borrow. This is because the l
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Promissory Note: The legal document a borrower and his or her spouse must sign indicating they agree to pay the mortgage loan back to the lender.
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PMI- Private Mortgage Insurance: If borrower puts down less than 20% of a down payment when purchasing a home, the lender usually requires mortgage insurance until the amount of equity is built up to or surpasses 20%. Related Article: A Lesson for Vets: U
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Principal: The amount of money that is loaned to a borrower. With most types of mortgages, the principal loan amount decreases every time a mortgage payment is made.
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Deed of Trust: When the deed is overseen by a trustee who works as a liaison between the borrower and lender in some states.
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Pre-qualification: A borrower can give all of their financial and credit information to a lender. This lender will use this information to inform the borrower about what type of loans they qualify for and how much of a monthly payment they can afford base
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