Mortgage Application Online

Mortgage Application Glossary

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Amortization – The gradual elimination of liability of an asset through regular payments over a specified period of time

Amenity – A beneficial attribute of a property that makes it more appealing.

Appraisal – A document required by lenders for the purpose of proving a property’s value.

Assumable Mortgage – A mortgage that can be transferred over from the seller to the buyer once the home is sold.

Balloon Mortgage – A mortgage that initially offers small payments based on low rates; its closing stages feature either multiple large payments or one final payment.

Borrower – A person who has been approved to receive a loan with the promise to repay it and any interest.

Cash Reserves – A cash deposit a lender may require in addition to the down payment and closing fees

Closing – The phase when ownership of property is transferred from the seller to the buyer.

Closing Costs – Fees incurred by the buyer or seller in the transfer of property. These fees may include title searches, lawyer fees, survey charges and deed filing fees.

Commission – A portion of money paid to a real estate agent for negotiating a transaction between a seller and buyer. This amount is generally a small percent of the property sale price.

Conventional Loan – These loans are given by the private sector and are not backed by the federal government.

Credit History – Records displaying an individual's debt payments; lenders use this information to gauge a potential borrower's ability to repay a loan.

Credit Report – Detailed information created by bureaus used in determining if an individual is creditworthy.

Credit Bureau Score – Based on credit history, it accurately portrays an individual’s financial competence.

Deed – A legal document depicting ownership.

Default – The inability to meet mortgage requirements.

Delinquency – Failure to make payments before the specified deadline.

Down Payment – a portion of a home’s purchase price paid that the buyer must pay in cash.

DTI - Debt to Income Ratio

Earnest Money – A deposit paid by a buyer to a seller to bind a contract.

Equity – The residual value of a property. To calculate simply subtract the amount still owed on the mortgage from the market value of the property.

Escrow Account – A separate account that allocates a portion of a monthly mortgage payment directed towards property taxes, mortgage insurance, and homeowners insurance.