Terminology Guide

80/20 Combo Loan
80% LTV 1st mortgage and 20% LTV 2nd mortgage with concurrent closings.

AVM
An AVM, or Automated Valuation Model is a computer generated residential property appraisal report. Created instantly, an AVM report is accepted by a lot of lenders in lieu of a physical appraisal for second mortgages and HELOCs. AVM's can significantly reduce the time it takes to obtain an estimate of value and reduce the costs associated with the traditional property appraisal process. BrokerMortgages.com has teamed up with two of the nations leading Automated Valuation providers.

Cash Out
Any loan proceeds that go to the borrower in the form of cash money. Cash for any purpose.

CLTV -Combined Loan To Value. The word combined indicates 2nd mortgage. CLTV - The ratio of the amount of your loan (both the 1st and 2nd mortgage) to the appraised value of the home.

Condo - Condominium
A real estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas.

DTI - Debt To Income ratio
This is a common qualifying ratio. It represents the percentage of your income that goes to bills every month.
Most lenders will require a 55% DTI or less to qualify for their "full doc" programs

Full Doc
Full doc - full documentation, an income documentation program that requires verification of income and employment documentation. These programs will typically provide the best pricing.

Gift
Money given to the borrower (s) from a private or personal party to use for loan qualifying/down payment purpose's. This money is not sourced by the lender.

Interest Only
A loan program featuring a monthly option to pay an "interest only" payment instead of the full "principle and interest" payment.

Limited Income Documentation
Loan program feature, utilize bank statements to qualify income.

LTV - loan to value
The ratio of the amount of your loan to the appraised value of the home. The LTV will affect programs available to the borrower and generally, the lower the LTV the more favorable the terms of the programs offered by lenders.

NINA - No Income/No Asset verification
Neither income, nor assets information is required/verified. This is a program feature that is usually associated with conventional type products. This feature allows you to get close to conventional pricing without having to verify any of your income or assets.

No Doc
No doc - Employment area on application, left blank. Similar to the stated income documentation programs, but the no doc doesn't require any supporting employment status or documentation or reserves/assets. This type of loan works well for those folks with out current employment. Also for those who simply do not want to disclose employment information.

No Ratio
Similar to the No Doc. Debt ratios are not at all considered in the "qualifying" of this loan. Reserves are not typically required.

Rate and Term refinance
A refinancing of a current 1st mortgage with out exceeding 1% cash out. Rate and term describes the purpose or nature of the loan

Stand Alone 2nd mortgage
Applying/obtaining a 2nd mortgage when a 1st mortgage is already in place. Non - purchase money transaction

Stated Income
An income documentation program feature that allows the loan officer to "state" an income amount on the application to the lender. The lender typically will require a written Verification Of Employment/VOE or verbal Verification from the employer (stating "employment status") , and for the self employed borrowers, the lender will typically require "blacked out" 1099 or a CPA letter. The meaning or exact definition for the term "stated income" can differ slightly between lenders. The loan officer must state on the application their employer, address of the employer, length of time with
employer, their position, type of business and income.
Debt-to-income ratios are calculated based upon the income stated.

Statistical appraisal
A statistical appraisal is a type of appraisal that some lenders will accept in lieu of a full appraisal. A statistical appraisal is much less expensive and takes minutes to obtain.

Wage Earner
W-2 employee making the majority of their income from salary pay.