Useful Definitions in the Mortgage Industry

Useful Definitions

Appraisal
A written justification of the price paid for a property, primarily based on an analysis of comparable

sales of similar homes nearby.
Bank Charge
Charge and fees of bank for providing mortgage financing.
Borrower
The individual that is listed on the loan application.
Broker Charge 
Charge and fees of broker.
Co-borrower
An additional individual who is both obligated on the loan and is on title to the property.
Contract price
The price written on a legal contract agreement, which the buyer agrees to pay to the seller.
Closing Costs
All closing cost and fees paid by a borrower at the time of closing.
Down Payment
Difference between purchase price on a legal contract and loan amount.
Escrow
Amount inserted to the escrow account, which will be applied as taxes to make up for the missing months from the closing until the due tax bill.
First Month Payment
This payment is for the interest on your loan from the day of your closing until the first day of the next month.
HUD-1 Settlement Statement
A document that provides an itemized listing of the funds that were paid at closing. The HUD1 statement is also known as the "closing statement" or "settlement sheet."
Homeowner's Insurance
An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.
Loan Amount
Amount of money a borrower receives from bank at closing.
Loan-to-value (LTV)
The percentage relationship between the amount of the loan and the appraised value or sales price (whichever is lower).
Loan Servicing company
The company that collects the monthly mortgage payments for the bank.
Loan Term
Is the amount of months you will repay the loan.
lock-In
An agreement in which the lender guarantees a specified interest rate for a certain amount of time at a certain cost.

Mortgage

No cash-out refinance
A legal document that pledges a property to the lender as security for payment of a debt. Instead of mortgages, some states use First Trust Deeds.
A refinance transaction which is not intended to put cash in the hand of the borrower. Instead, the new balance is calculated to cover the balance due on the current loan and any costs associated with obtaining the new mortgage. Often referred to as a "rate and term refinance."
Note
A legal document that obligates a borrower. Four components (Principal - Interest
^{Taxes - Insurance) of housing cost that isPITI Amount} combined in a single monthly payment that is paid by borrower.
Principal/Interest
The original amount of money borrower, which is paid back with interest.
Refinance
To redo your mortgage for any of the following reasons: to obtain a better rate or mortgage term, to obtain cash out of the deal for debt consolidation or home improvement.
Subject Property Address
The property on which the loan is applied
Title
The legal rights of ownership and possession evidenced by a legal document. A legal title empowers its holder to control the property and serves as a link between the titleholder and the property itself.
Title Charge
Charge and fees of title insurance, government and recording fees.
Taxes/Insurance
The monthly payment to cover 1/12th of annual property taxes and insurance premium and is kept in escrow until due for payment.

Mortgage Calculator

This Mortgage Payment Table will allow you to estimate your monthly principal and interest payments for any fixed interest rate mortgage. You can't reliably use the chart to calculate the monthly payment for an adjustable rate mortgage, except for the initial period; after that, of course, the rate, the term (and the payments) will be different.

Scan down the interest rate column to a given interest rate, such as 8.875%; then follow across to the payment factor for either a 15 or 30 year term. Multiply the factor shown [10.07 for a 15 year; 7.96 for a 30 year] by the number of thousands in your mortgage amount [such as 235, when the loan amount is $235,000], and the result is your monthly principal and interest payment.

In our example, with a loan of $235,000 and interest rate of 8.875% for 30 years, multiply 7.96 X 235 = $1870.60 per month.

Mortgage Calculator

This chart covers interest rates from 8.875% to 2.5%, and loan terms of 15 and 30 years. Interest 15 Year Term 30 Year Term Rate % Monthly Payment Monthly Payment Interest 15 Year Term 30 Year Term Rate % Monthly Payment Monthly Payment
8.875% 10.07 7.96
8.75% 9.99 7.87
8.625% 9.92 7.78
8.50% 9.85 7.69
8.375% 9.77 7.6
8.25% 9.7 7.51
8.125% 9.63 7.42
8.00% 9.56 7.34
7.875% 9.48 7.25
7.75% 9.41 7.16
7.625% 9.34 7.08
7.50% 9.27 6.99
7.375% 9.2 6.91
7.25% 9.13 6.82
7.125% 9.06 6.74
7.00% 8.99 6.65
6.875% 8.92 6.57
6.75% 8.85 6.49
6.625% 8.78 6.4
6.50% 8.72 6.33
6.375% 8.64 6.24
6.25% 8.58 6.16
6.125% 8.51 6.08
6.00% 8.44 6
5.875% 8.37 5.92
5.75% 8.31 5.84
5.625% 8.24 5.76 5.50% 8.18 5.68 5.375% 8.1 5.59 5.25% 8.03 5.52 5.125% 7.97 5.44 5.00% 7.9 5.36 4.875% 7.84 5.29 4.75% 7.77 5.21 4.625% 7.71 5.14 4.50% 7.64 5.06 4.375% 7.58 4.99 4.25% 7.52 4.91 4.125% 7.45 4.84 4.00% 7.39 4.77 3.875% 7.33 4.7 3.75% 7.27 4.63 3.625% 7.21 4.56 3.50% 7.15 4.49 3.375% 7.09 4.42 3.25% 7.03 4.35 3.125% 6.97 4.28 3.0% 6.91 4.22 2.875% 6.85 4.15 2.75% 6.79 4.08 2.625% 6.73 4.02 2.50% 6.67 3.95