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Mortgage Glossary

At Waterstone Mortgage, we understand that getting a mortgage can be confusing. That’s why we’re lending clarity to some commonly used mortgage terms to help you better understand the mortgage process.

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

-A-

Adjustable Rate Mortgage (ARM)
Is a mortgage in which the interest rate is adjusted periodically based on a pre-selected index. ARM loans are also known as the re-negotiable rate mortgage or the variable rate mortgage.

Amortization
Payment of debt in regular, periodic installments of principal and interest, as opposed to interest-only payments. Amortization is the process of reducing principal and interest in equal installment payments at specific intervals over a set term. A fully amortizing loan payment has two parts with a portion of the payment applied to pay the accruing interest on the loan and the remainder applied to principal. Over time, the interest portion decreases and the amount applied to principal increases so that the loan is paid off in the specified term.

Annual Percentage Rate (APR)
An interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage because it takes into account points and other credit costs. The APR allows homebuyers to compare different types of mortgages based on the annual cost for each loan.

Appraisal
An estimate of the value of property made by a qualified professional called an "appraiser."

-B-

Back-End Debt Ratio
This refers to the borrower's debt ratio and is calculated using a borrower's total monthly payments due on credit obligations divided by the borrower's gross monthly income. It's expressed as a percentage.

Balloon Mortgage Payment
Usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract.

Bankruptcy
Court proceedings to relieve the debts of an individual or business unable to pay its creditors.

Borrower
One who receives a loan in the form of a mortgage with the intention of repaying the loan in full.

Buy-Down
When the borrower/homebuilder/home seller subsidizes the mortgage by paying up front to lower the interest rate over the term of the mortgage or in some cases for a set period of time.

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-C-

CAPS (Interest)
Consumer safeguards which limit the amount the interest rate on an adjustable rate mortgage may change per year and/or the life of the loan.

CAPS (Payment)
Consumer safeguards which limit the amount monthly payments on an adjustable rate mortgage may change.

Ceiling
The highest interest rate that may be assessed on an adjustable-rate loan during the life of the loan based on the start rate and lifetime cap.

Certificate of Veteran Status

The document given to veterans or reservists who have served 90 days of continuous active duty (including training time). It may be obtained by sending DD 214 to the local VA office with form 26-8261a (request for certificate of veteran status). This document enables veterans to obtain lower down payments on certain FHA insured loans.

Chapter 13 Bankruptcy
Chapter 13 is a debt reorganization plan where debts are repaid under a court-supervised repayment plan. Debtors submit part of their income for distribution among creditors. Also known as the wage-earner plan.

Chapter 7 Bankruptcy
A Chapter 7 Bankruptcy is a straight liquidation bankruptcy where the debtor submits all of their non-exempt assets to the trustee for liquidation; proceeds are disbursed to creditors.

Charge-Off
A delinquent credit account with a balance owed that was never fully satisfied and the creditor removed it from the books for accounting purposes even though the debtor still owes payment in full.

Closing
The meeting between the buyer, seller and lender or their agents where the property and funds legally change hands. Also called Settlement. At the closing all final loan documents and contracts are signed with a notary.

Closing Agent
The party designated to conduct the loan closing. This agent ensures that the mortgage or deed is recorded and that the funds are disbursed on time.

Closing Costs
Money paid by the borrower to affect the closing of a mortgage loan, including such costs as title insurance premiums, appraisal fees, lender fees, closing agent fees, recording fees, etc.

Co-Borrower
A 2nd borrower on a loan.

Combined Loan to Value
The total of all liens on the subject property divided by the appraised value of the property.

Community Property
Property owned equally by a husband and wife. This classification of property is only used in certain states.

Comparable
Properties used to determine the value of a specific property for comparative purposes in the preparation of an appraisal.

Conforming Loan
Home loans that meet the specified guidelines set by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.

Contract Sale or Deed
A contract between a purchaser and a seller of real estate to convey title after certain conditions have been met. It is a form of installment sale.

Conventional Loan
A mortgage that meets guidelines set by Fannie Mae and Freddie Mac relative to their standards for purchasing a given loan for resale into public debt markets. There are a variety of conforming loan types including fixed rate and adjustable rate loans. Generally conforming loans will carry lower interest rates than loans that do not meet the standardized guidelines.

Conveyance
The written instrument by which title to real property is transferred from one party to another.

Covenants, Conditions and Restrictions (C C & Rs)
Limitations placed on the use and enjoyment of real property. Usually intended to maintain a certain look within a neighborhood and is common in subdivisions, PUDS, or condominium communities.

Credit Bureau
A company that collects and organizes information about an individual's credit and payment habits. The 3 national credit bureaus are Experian, TransUnion, and Equifax.

Credit Score
A numerical assessment assigned to the customer by credit bureaus that represents a measurement of the customer's overall credit rating. The scores are weighted and range from approximately 365 to 840. Low scores reflect a "high risk", while higher scores reflect a "lower risk". Each credit bureau has its own credit score system.

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-D-

Debt Consolidation Loan
A loan that combines debt obligations into one debt.

Debt-to-Income Ratio
The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her gross monthly income.

Deed
The official written document conveying real property to a given owner. This is the document that is the official record of property ownership for public records.

Deed of Trust
A voluntary lien to secure a debt. A Deed of Trust deeds the property to a Trustee who has the right to foreclose on the property in the event of default on the Note the Deed of Trust secures. In many states, this document is used in place of a mortgage to secure the payment of a note.

Demand
A letter from a lender showing the total amount due to pay off a mortgage or trust deed, inclusive of unpaid principal, interest, impound amounts, prepayment penalty, etc. Also, known as a Demand for Payoff Request or Beneficiaries Demand Letter.

Department of Veteran Affairs (VA)
An independent agency of the federal government which guarantees long-term, low-or no-down payment mortgages to eligible veterans.

Derog Letter
A letter written by the borrower that explains any derogatory information or reporting on the credit report.

Divorce Decree
An official document issued by a court that dissolves a marriage relationship.

Docs
Abbreviation for mortgage loan documents.

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-E-

Earnest Money
Money given by a buyer to a seller as part of the purchase price to bind a transaction or assure payment.

Equal Credit Opportunity ACT (ECOA)
A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.



Equity
The difference between the fair market value and current amount owed on a given property. Also referred to as the owner's interest.

Equity Lines of Credit
A line of credit secured by real property. A mortgage is recorded against the borrower's property for a maximum loan amount. The borrower has the right to borrow funds, as needed, up to the total amount of the credit line.

Escrow
Delivery of something of value by a grantor to a 3rd party for delivery to the grantee upon the happening of a contingent event. In some states, all instruments necessary to the sale are delivered to a 3rd party, with instructions as to their use.

Escrow Instructions
For purchase transactions, instructions signed by both buyer and seller, which enable the escrow agent to carry out the procedures necessary to transfer real property, a business or other assignable interest.

Experian (EXP)
The name of a national credit bureau.

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-F-

Fair Housing Act
A Federal act that prohibits discrimination in any aspect related to the sale, rental or financing of dwellings on the basis of race, color, religion, national origin, sex, handicap or familial status.

Fannie Mae
The nation's largest mortgage investor created in 1968 by an amendment to Title III of the National Housing Act. This stockholder-owner corporation, a portion of whose board of directors is appointed by the President of the United States, supports the secondary market in mortgages on residential property.

Farmers Home Administration (FMHA)
Provides financing to farmers and other qualified borrowers who are unable to obtain loans elsewhere.

Federal Home Loan Bank Board (FHLBB)
The former name for the regulatory and supervisory agency for federally chartered savings institutions. Agency is now called the Office of Thrift Supervision.

Federal Home Loan Mortgage Corporation (FHLMC) also called "Freddie Mac"
A quasi-governmental agency that purchases conventional mortgages from insured depository institutions and HUD-approved mortgage bankers.

Federal Housing Administration (FHA)
A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders. FHA also sets standards for underwriting mortgages.

Federal National Mortgage Association (FNMA) also known as "Fannie Mae"
A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA. This institution, which provides funds for one in seven mortgages, makes mortgage money more available and more affordable.

Fee Simple Estate
An estate under which the owner is entitled to unrestricted powers to dispose of the property, and under which the property can be left by will or inherited. Commonly, a synonym for ownership.

FHA Loan
A loan insured by the Federal Housing Administration open to all qualified home purchasers. While there are limits to the size of FHA loans (depending on location), they are generous enough to handle moderately priced homes almost anywhere in the country.

FHLMC
The Federal Home Loan Mortgage Corporation provides a secondary market for savings and loans by purchasing their conventional loans. Also known as "Freddie Mac."

FICO
The name given to a numerical score assigned by credit bureaus to measure a borrower's credit characteristics.

Fixed Rate Mortgage
The mortgage interest rate will remain the same on this type of mortgage throughout the term of the mortgage for the original borrower.

Flood Insurance
Insurance indemnifying against loss by flood damage. Required in federally designated special Flood Hazard Areas. The insurance is private but federally subsidized.



FNMA
The Federal National Mortgage Association is a secondary mortgage institution which is the largest single holder of home mortgages in the United States. FNMA buys VA, FHA, and conventional mortgages from primary lenders. Also known as "Fannie Mae."

Forbearance
A lender's act of refraining from taking legal action despite the fact a mortgage is in arrears. It's usually granted when a mortgagor makes a satisfactory arrangement by which the arrears will be paid at a future date.

Foreclosure
A proceeding in or out of court, to extinguish all rights, title, and interest, of the owner of property in order to sell the property to satisfy a lien against it.

Front-End Debt Ratio
This refers to the debt ratio calculation using only principal, interest, tax and insurance divided by gross monthly income. It's expressed as a percentage.

Fully Indexed Rate
The fully indexed rate is equal to the rate index plus the loan's margin and is used with adjustable-rate mortgages. Example: If LIBOR is 6.50% and the margin on the loan is 4.00%, the fully indexed rate is 10.50%.

Funding
Disbursement of loan funds, either by check or by wire transfer from the lender to the loan closing agent.

 

-G-

Gift Letter
A letter to the lender from the donor stating a gift of money has been made to the buyer in order to purchase specific property. The relationship of the donor and recipient is stated, as well as the amount of the gift.

Government National Mortgage Association (GNMA)
Also known as "Ginnie Mae". Provides funds for residential mortgages, insured or guaranteed by FHA or VA.

Grant Deed
A written instrument used to transfer or convey real property. A grant deed contains warranties against prior conveyances or encumbrances.

Grantee
One who received property rights when a grant is made. Generally, the buyer or purchaser of real property.

Grantor
One who grants property or property rights to another

Gross Monthly Income (borrower)
The total amount the borrower earns per month, before any expenses are deducted.

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-H-

Hazard Insurance
A form of insurance in which the insurance company protects the insured from specified losses, such as fire, windstorm and the like.

Home Mortgage Disclosure Act (HMDA)
This act requires mortgage companies to report selected information to the Federal government about each application received. HUD (US Department of Housing and Urban Development) uses HMDA to detect discrimination and identify trends in lending patterns.

Homeowners' Association (HOA)
An association of people who own homes in a given area, formed for the purpose of improving or maintaining the quality of the area. Unpaid HOA dues can become a lien against a property.

Homestead
Status provided to a homeowner's principal residence by some state statutes; protects a home against judgments up to specified amounts.



HUD-1 (or HUD-1a)
Final statement of the actual settlement costs of the loan and all other disbursements of a loan's proceeds. A Federal requirement under RESPA.

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-I-

Impound
That portion of a borrower's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Also known as reserves or escrow amounts.

Index
A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments (such as one- three-, and five-year US Treasury security yields), which is then used to adjust the interest rate on an adjustable mortgage up or down.

Initial Adjustment CAP
The upper limit for the first rate adjustment on an adjustable interest rate mortgage loan.

Inquiries
An indication of credit investigations made by companies that are considering granting credit to a person who appears on the credit report.

Interest
Money charged over time for the use of money.

Interest Rate
A percentage used to calculate the amount charged for the use of money. Usually expressed as an annual percentage.

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-J-

Joint Tenancy
A form of holding title in which the property is owned by 2 or more persons who may have rights of survivorship.

Judgment
The decision of a court of law; debts resulting from a court order for payment. Money judgments, when recorded, become a lien against the defendant's property.

Jumbo Loan
A loan which is larger than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate.

-L-

Lease Option to Purchase
A lease containing a clause that allows the tenant the right to purchase the property under specified conditions.

Leasehold Estate
A kind of real estate ownership through which the property owner doesn't hold title to the property, but instead has use of the property subject to the terms of the lease.

Legal Description
A method of geographically identifying a parcel of land that is acceptable in a court of law.

Liabilities
The debts of a person or business.

LIBOR
An acronym for London Interbank Offered Rate, one of several published interest rate indices. It represents the average rate of interest that major London banks charge as they lend to one another.

Lien
A claim upon a piece of property for the payment or satisfaction of a debt or obligation.

Lifetime CAP
This is the cap that limits how high an interest rate can increase over the life of an adjustable-rate mortgage loan. Example: Start rate + 6% = lifetime Cap.

Lines of Credit
A type of mortgage loan from which borrowers can write a check or draw funds. Some lines of credit are also balloon loans. Usually the borrower is given 5 to 10 years to use the line of credit. After this period, many lines of credit require the borrower to pay the loan in full. Others may require the loan to be paid in full over the next 10 to 15 years.

Liquid Assets
Cash or assets, such as checking/savings accounts, stocks/bonds, that are immediately convertible to cash.

Loan Application (1003)
The form potential customers must complete to apply for a home loan. This application is commonly referred to as "the 1003" and is produced by the Federal government.

Loan-to-Value Ratio
The relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage.

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-M-

Margin
The amount a lender adds to the index on an adjustable rate mortgage to establish the adjusted interest rate.

Market Value
The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a given time.

Mixed-Use Property
A property in which various portions of the property are used for different purposes such as industrial, retail, and residential. A retail store front with living space above would e a typical example.

MIP (Mortgage Insurance Premium)
It is insurance from FHA to the lender against incurring a loss on account of the borrower's default.

Mortgage
A written instrument that creates a lien upon real estate as collateral for the payment of a specified debt. The borrower retains possession and use of the property.

Mortgage Banker
A non-depository financial institution that specializes in originating and servicing loans. They generally sell their loans to investors, but may continue to service them.

Mortgage Broker
A mortgage broker is one who arranges financing for a borrower by placing loans with lenders. Mortgage brokers are paid a fee by the borrower or the lender when the loan closes.

Mortgage Insurance
Money paid to insure the mortgage when the down payment is less than 20 percent.

Mortgagee
The lender.

Mortgagor
The borrower or homeowner.

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-N-

Negative Amortization
Occurs when your monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the unpaid balance of the loan. The danger of negative amortization is that the homebuyer ends up owing more than the original amount of the loan.

Net Disposable Income
Money left after subtracting the principal, interest, taxes and insurance and all other obligations from a borrower's monthly net income. This is the amount the borrower has available for living expenses after housing expenses are subtracted.

Non-Conforming Loan
Home loans that do not meet the specified guidelines set by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.

Non-Owner Occupied
A property used as a residence by a renter/tenant instead of the owner of the property.

Non-Recurring Closing Costs
Fees and costs associated with the closing of a loan, such as title, appraisal, notary fees, etc., that occur only once in the transaction.

Notary Public
One who is authorized by the state or Federal government to administer oaths and to attest to the authenticity of signatures.

Note
An agreement containing an expressed and absolute promise of the signer to pay to a named person or bearer a definite sum of money at a specified date or on demand. Usually provides for interest, and if concerning real property, is secured by a mortgage or trust deed.

Notice of Default (NOD)
A notice filed with a county records office to show that the borrower under a mortgage or deed of trust is in default.

Notice of Recission
Borrowers' signed acknowledgement that they wish to cancel their loan. This generally must occur within a specified number of days after a loan closing.

Notice of Right to Cancel
Under Regulation Z, customers must be notified they are entering into a transaction that will result in a lien against their primary residence. This document explains they have the right to cancel the transaction, at no cost, within 3 business days from the date of signing the closing documents on a loan.

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-O-

Origination Fee
The fee charged by a lender to prepare loan documents, run credit checks, inspect and sometimes appraise a property; usually computed as a percentage of the face value of the loan.

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-P-

PAR
The principal amount of a mortgage with no premium or discount.

Pension Award Letter
Documentation specifying the frequency and amount of pension payments an individual is eligible to receive.

Periodic Adjustment Cap
This cap limits how much the interest rate can change in the future on an adjustable-rate mortgage.

PITI
Principal, Interest, Taxes and Insurance. Also called monthly housing expense.

Planned Unit Development (PUD)
A single-family residence located in a community with association dues and other required monthly payments.

Plat Map
A map dividing a parcel of land into lots, as in a subdivision.

Points (Loan Discount Points)
Prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g., two points on a $100,000 mortgage would cost $2,000).

Pre-Paid Expenses
Necessary to create an escrow account or to adjust the seller's existing escrow account. Can include taxes, hazard insurance, private mortgage insurance and special assessments.

Pre-Payment Penalty
Money charged for an early repayment of debt. Prepayment penalties are allowed in some form (but not necessarily imposed) in many states.

Primary Residence
The property in which the customer resides the majority of the time.

Prime Rate Index
A rate index which is the prevailing rate that banks charge to lend money to corporations.

Principal
The amount of debt, not counting interest, left on a loan.

Principal and Interest (P&I)
This refers to the principal and interest portions of a monthly mortgage payment.

Principal, Interest, Taxes & Insurance (PITI)
The total of the monthly mortgage payment due, which includes all principal, interest, taxes and insurance.

Private Mortgage Insurance (PMI)
Insurance against a loss by a lender normally required in the event the lender has lent more than 80% of the value of the property securing the loan. The premium is paid by the borrower and is included in the mortgage payment.

Pro Rate
To divide in proportionate shares, such as taxes, insurance, rent or other items that buyer and seller share as of the time of closing, or other agreed upon time.

Profit and Loss Statement (P & L)
A statement documenting business revenues and expenses for a specified time period to establish whether a business gained a profit or suffered a loss.

Promissory Note
A written promise by the borrower to pay a debt owed, within a specified time, to the holder of the note under conditions mutually agreed upon.

Purchase Agreement
The agreement made between the buyer and seller of a property, containing the purchase price and contingencies of the sale.

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-Q-

Quitclaim Deed
A deed operating as a release; intended to pass any title, interest or claim that the grantor may have in the property, but not containing any warranty that such title is valid, nor containing any warranty or covenants for title.

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-R-

Rebuild Letter
A letter provided by the appropriate municipality, stating a structure on a specific property can be rebuilt as originally constructed in the case of damage or destruction.

Recission
The cancellation of a contract. With respect to mortgage refinancing, the law that gives the homeowner three days to cancel a contract in some cases once it is signed if the transaction uses equity in the home as security.

Reconveyance (RECON)
An instrument used to transfer title from a trustee to the property owner when title is held as security for a debt. Most commonly used upon payment in full of a mortgage or trust deed.

Recording
The act of recording a document such as a deed or mortgage in a public registry thereby giving notice to future purchasers, creditors or other interested parties. Recording is controlled by statute and usually requires the witnessing and notarizing of an instrument to be recorded.

Refinance
Obtaining a new mortgage loan on a property already owned. Often to replace existing loans on the property.

Rescind
To void or cancel in such a way as to treat the contract, or other object of the rescission, as if it never existed.

RESPA
Short for the Real Estate Settlement Procedures Act. RESPA is a federal law that allows consumers to review information on known or estimated settlement costs.

Reverse Annuity Mortgage (RAM)
A form of mortgage in which the lender makes periodic payments to the borrower using the borrower's equity in the home as Satisfaction of Mortgage: The document issued by the mortgagee when the mortgage loan is paid in full. Also called a "release of mortgage.

Rural
A term used to describe a property's location. For example, rural properties are in remote locations, on non-paved roads, or streets with support services more than 10 miles away. Rural is also a term used to describe areas that are not within a city.

 

-S-

Second Mortgage
A mortgage made subsequent to another mortgage and subordinate to the first one.

Section 32
A section of the Federal Truth-in-Lending Act pertaining to high fee loans and the restrictions and compliance issues with which this type of loan transaction must comply.

Simple Interest
Interest which is computed only on the principle balance.

Single Family Residence (SFR)
A standard home with no common areas, no homeowners' dues or sharing of common walls. A home intended to be occupied by 1 family.

Sole Proprietorship
Ownership of a business, with no formal entity as a vehicle or structure. The sole proprietorship reports its tax information on Federal tax form 1040.

Subordinate
A lien taking a legal title position junior to another lien that recorded later. For example, if a mortgage lien is recorded in 1996, it can subordinate to a lien recorded in 1999. Subordination may apply not only to mortgages, but also to leases, real estate rights and any other type of debt instruments.

Subordination Agreement
An agreement by which a lien holder agrees to accept a lien position junior to that of a later-recorded lien. For example, when a lien holder agrees to subordinate, a formal agreement must be drawn, signed and recorded to make it a legal transaction. Subordinations may apply not only to mortgages, but also to leases, real estate rights and any other types of debt interests.

Suburban
The area around a city. Usually residential with some small businesses.

Supplemental Taxes
Additional taxes assessed by the city and/or county on property. These taxes are in addition to any taxes impounded in an escrow account.

Sweat Equity
Equity created by a purchaser performing work on a property being purchased.

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-T-

Tax Lien
A lien for outstanding or delinquent property, IRS or state taxes. Tax liens for delinquent property taxes are the most common and attach only to the property upon which the taxes are unpaid. Property tax liens always take priority over other liens.

Temporary Disability Award Letter
A letter issued to employees who are awarded temporary disability benefits because they are unable to work due to medical disability. These employees are expected to return to work once their disability heals

Tenancy by the Entirety
A form of ownership by husband and wife whereby each holds title to the entire property with right of survivorship. In the event of the death of one, the survivor takes the entire property to the exclusion of the deceased's heirs.

Tenancy in Common
A form of holding title in which the property is owned by 2 or more persons whereby each tenant holds an undivided interest in the property and no right of survivorship.

Title
A document that gives evidence of an individual's ownership of property.

Title Commitment
A written report showing all current claims against a property before a sale or loan transaction. After completion of the transaction, a title insurance policy is issued.

Title Insurance
A policy, usually issued by a title insurance company, which insures a home buyer against errors in the title search. The cost of the policy is usually a function of the value of the property, and is often borne by the purchaser and/or seller. Policies are also available to protect the lender's interests.

Tradeline
Credit items reported on a credit report.

Trust Deed
An instrument used in many states in place of a mortgage. Grants an interest in the property as collateral for a loan and, when recorded with the county, creates a lien having priority over later-filed mortgages or trust deeds.

Truth-In Lending
A federal law requiring disclosure of the Annual Percentage Rate to home buyers shortly after they apply for the loan. Also known as Regulation Z.

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-U-

Underwriting
The decision whether to make a loan to a potential home buyer based on credit, employment, assets, and other factors, and the matching of this risk to an appropriate rate and term or loan amount.

Unemployment Compensation Award Letter
A letter issued to employees who are awarded unemployment benefits when their employment is terminated through no fault of their own. The benefits they receive are called unemployment compensation.

Uniform Residential Appraisal Report (URAR)
The most common appraisal form in use. The URAR is used to document the methods used to determine the market value of single-family residences and planned unit developments.

Urban
A term used to describe a property's location. Urban properties have paved access roads and streets; they are close to neighboring properties and have support services less than 10 miles away. Urban is also a term used to describe a property located in a city or town.

-V-

Vacancy Factor
A multiple by which gross monthly rental income is multiplied. The vacancy factor reduces the owner's monthly rental income to allow for months when units are vacant and the owner is not receiving full rental income.

VA Loan
A long-term, low-or no-down payment loan guaranteed by the Department of 
Veterans Affairs. Restricted to individuals qualified by military service or other entitlements.

Variable Interest Rate
An interest rate that fluctuates as a result of changes in a controlling index rate. With adjustable-rate mortgages, there are usually maximums as to the frequency and amount of fluctuation.

Verification of Deposit (VOD)
A document signed by the borrower's financial institution verifying the status and balance of his/her financial accounts.

Verification of Employment (VOE)
A document signed by the borrower's employer verifying his/her position and salary.

Verification of Mortgage (VOM)
Documentation that establishes the customer's mortgage payment history.

VOR
Acronym for Verification of Rent.

-W-

Warranty Deed
A deed used in many states to convey fee title to real property. A deed in which the grantor or seller warrants or guarantees good title is being conveyed as opposed to a quitclaim deed that contains no representation or warranty as to the quality of title being conveyed.

Wholesale Lender
A lender who works only with mortgage brokers and takes completed loan packages and underwrites them. They offer mortgage brokers discounted pricing in return for the up-front work done by the mortgage broker.

 -Z-

Zoning
The division of a city or county by legislative regulations into areas specifying the permitted uses allowable for the real property in these areas.

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Contact Information
Gail Hillman
Sales Manager NMLS: #312734
Office: (972) 200-3253
Fax: (972) 674-2915
Email: Send Email
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