Chapter 7 Bankruptcy Chapter 7 Bankruptcy puts an automatic and temporary stay on your debts. It halts debt collection efforts, eviction, and foreclosure proceedings. Used to buy time to liquidate property and pay off debts. Closing Costs Any fees required to close escrow and buy property other than the purchase price. Examples include loan application fees, transfer taxes, inspection fees, attorney fees, and prepaid interest. Closing Disclosure A document that provides the final details of the mortgage loan the borrower is taking on, including the starting balance, interest rate, amortization schedule, loan term, and mortgage-related closing costs. Co-Borrower When multiple people or entities take out a mortgage loan together, they are “co-borrowers,” equally responsible and liable for repayment of the loan. Collections A process where a creditor attempts to collect a debt from a borrower, usually after the borrower has defaulted on payments or other terms of the loan. Convertible ARM A “hybrid” loan structure that begins with an adjustable interest rate, but contains the option to convert to a fixed-rate loan at a later date during the loan term.
Construction Mortgage A mortgage for the construction or renovation of a home. It may include loan proceeds not only for the purchase of the property, but for the construction expenses as well. Construction funds may be disbursed by the lender according to a schedule based on the progress of the project, with more funds available at different milestones in construction. Conventional Mortgage Sometimes referred to as a “conforming” loan, a conventional mortgage fits the guidelines set forth by Federal mortgage banks Fannie Mae and Freddie Mac. Under these conditions, the federal banks will insure the loan, protecting the borrower and therefore decreasing risk to the lender. Debt-To-Income (DTI) Ratio The percentage of the borrower’s gross income that goes toward paying down his/her current consumer debt. Most lenders will not issue a mortgage to borrowers with 43% DTI or over. Lenders prefer a DTI of 36%, with no more than 28% going towards a rent or mortgage payment. Deed The legal instrument indicates, officially and on paper, who owns a particular piece of real estate. Deeds are usually filed with a governmental entity, like the County Clerk, and are used to establish ownership and guard against competing claims of ownership. In the mortgage industry, “Deed” may be short for “Deed of Trust,” one of the two critical documents that form a mortgage loan. The deed of trust establishes the ownership of the property by the borrower with a lien held by the lender (see definition of lien). The other instrument that forms the mortgage is the promissory note.
RITA REALTOR | BROKERAGE 904-555-5555 | Rita@realtor.com | www.Authorify.com
LARRY LOAN OFFICER | OFFICE 904-555-1010 | Larry@loans.com | www.Authorify.com
Powered by FlippingBook