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Davie Home Finance, 115 Donna Rd NE, Palm Bay, FL 32907
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Glossary
ARM or adjustable-rate mortgage:
A mortgage loan with an interest rate that adjusts periodically over the life of the
mortgage based on changes in a specified index. These can start adjusting
immediately, or generally after a predetermined number of years.
Alt-A mortgage:
Generally, a loan that can be underwritten with lower or alternative documentation
than a full documentation mortgage loan but may also include other alternative
product features. Examples of these would be stated income and low or no
documentation loans.
Charge-off:
The portion of principal and interest due on a loan that is written off when deemed to
be noncollectable.
Conventional mortgage:
A mortgage loan that is not guaranteed or insured by the U.S. Government or its
agencies, such as the VA, FHA or RHS.
Credit scoring:
A process that uses recorded information about individuals and their loan requests to
assess - in a quantifiable, objective, and consistent manner - their future performance
regarding debt repayment. There are 3 major credit reporting bureaus, Experian,
Transunion, and Equifax.
Default:
The failure of a borrower to comply with the terms of a note or the provisions of a
mortgage.
Delinquency:
A mortgage loan on which a payment has not been made by the due date.
Fixed-rate mortgage:
A mortgage loan with an interest rate that does not change during the entire term of
the loan.
Forbearance:
The lender's postponement of legal action when a borrower is delinquent. It is usually
granted when a borrower makes satisfactory arrangements to bring the overdue
mortgage payments up to date.
Foreclosure:
The legal process by which property that is mortgaged as security for a loan may be
sold to pay a defaulting borrower's loan.
Loan servicing:
The tasks a lender performs to protect a mortgage investment, including collecting
monthly payments from borrowers and dealing with delinquencies. Some lenders
service their own loans, and some sell the servicing to other companies.
Loan-to-value (LTV) ratio:
The ratio, at any point in time, of the unpaid principal amount of a borrower's
mortgage loan to the value of the property that serves as collateral for the loan
(expressed as a percentage).
Mortgage:
A legal document that pledges property to a lender as security for the repayment of
the loan. The term also is used to refer to the loan itself.
Multifamily mortgage loan:
A mortgage loan secured by a property containing five or more residential dwelling
units.
Preforeclosure sale:
A procedure in which the borrower is allowed to sell his or her property for an amount
less than what is owed on it to avoid a foreclosure. This sale fully satisfies the
borrower's debt. This is also known as a short sale, and may effect your credit and
income tax liability.
Repayment plan:
An agreement between a lender and a borrower who is delinquent on his or her
mortgage payments, in which the borrower agrees to make additional payments to
pay down past due amounts while still making regularly scheduled payments.
Reverse mortgage:
A financial tool that provides seniors with funds from the equity in their homes.
Generally, no borrower payments are made on a reverse mortgage until the borrower
moves or the property is sold. The final repayment obligation is designed not to
exceed the proceeds from the sale of the home.
Secondary mortgage market:
The market in which residential mortgages or mortgage securities are bought and
sold.
Underwriting:
The process of evaluating a loan application to determine the risk involved for the
lender. It involves an analysis of the borrower's ability and willingness to repay the
debt and the value of the property.
ARM or adjustable-rate mortgage:
A mortgage loan with an interest rate that adjusts periodically over the life of the
mortgage based on changes in a specified index. These can start adjusting
immediately, or generally after a predetermined number of years.
Alt-A mortgage:
Generally, a loan that can be underwritten with lower or alternative documentation
than a full documentation mortgage loan but may also include other alternative
product features. Examples of these would be stated income and low or no
documentation loans.
Charge-off:
The portion of principal and interest due on a loan that is written off when deemed to
be noncollectable.
Conventional mortgage:
A mortgage loan that is not guaranteed or insured by the U.S. Government or its
agencies, such as the VA, FHA or RHS.
Credit scoring:
A process that uses recorded information about individuals and their loan requests to
assess - in a quantifiable, objective, and consistent manner - their future performance
regarding debt repayment. There are 3 major credit reporting bureaus, Experian,
Transunion, and Equifax.
Default:
The failure of a borrower to comply with the terms of a note or the provisions of a
mortgage.
Delinquency:
A mortgage loan on which a payment has not been made by the due date.
Fixed-rate mortgage:
A mortgage loan with an interest rate that does not change during the entire term of
the loan.
Forbearance:
The lender's postponement of legal action when a borrower is delinquent. It is usually
granted when a borrower makes satisfactory arrangements to bring the overdue
mortgage payments up to date.
Foreclosure:
The legal process by which property that is mortgaged as security for a loan may be
sold to pay a defaulting borrower's loan.
Loan servicing:
The tasks a lender performs to protect a mortgage investment, including collecting
monthly payments from borrowers and dealing with delinquencies. Some lenders
service their own loans, and some sell the servicing to other companies.
Loan-to-value (LTV) ratio:
The ratio, at any point in time, of the unpaid principal amount of a borrower's
mortgage loan to the value of the property that serves as collateral for the loan
(expressed as a percentage).
Mortgage:
A legal document that pledges property to a lender as security for the repayment of
the loan. The term also is used to refer to the loan itself.
Multifamily mortgage loan:
A mortgage loan secured by a property containing five or more residential dwelling
units.
Preforeclosure sale:
A procedure in which the borrower is allowed to sell his or her property for an amount
less than what is owed on it to avoid a foreclosure. This sale fully satisfies the
borrower's debt. This is also known as a short sale, and may effect your credit and
income tax liability.
Repayment plan:
An agreement between a lender and a borrower who is delinquent on his or her
mortgage payments, in which the borrower agrees to make additional payments to
pay down past due amounts while still making regularly scheduled payments.
Reverse mortgage:
A financial tool that provides seniors with funds from the equity in their homes.
Generally, no borrower payments are made on a reverse mortgage until the borrower
moves or the property is sold. The final repayment obligation is designed not to
exceed the proceeds from the sale of the home.
Secondary mortgage market:
The market in which residential mortgages or mortgage securities are bought and
sold.
Underwriting:
The process of evaluating a loan application to determine the risk involved for the
lender. It involves an analysis of the borrower's ability and willingness to repay the
debt and the value of the property.
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