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80/20 Combo Loan
80% LTV 1st mortgage and 20% LTV 2nd mortgage with concurrent closings.
ARM - Adjustable Rate Mortgage
AVM
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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.
Contribution
3rd party down payment.
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
FHA - Federal
Housing Administration
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.
HUD - Housing of Urban Development
Interest Only
A loan program featuring a monthly option to pay an "interest only"
payment instead of the full "principle and interest" payment.
Libor - London Interbank Offered Rate
Limited Income Documentation
Loan program guideline 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.
MLS - Multiple Listing Service
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.
NOD - Notice of Default
A notice from the lien holder bank to the existing borrower indicating that
their loan has gone into "default status"
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.
N/O/O - Non Owner Occupied.
Investment property.
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.
NOS - Notice of Sale - A legal notice that a lender is required to issue
right before the sale of a mortgaged property upon foreclosure.
NRCCs
Non
Recurring Closing Costs.
O/O - Owner Occupied
Primary residence.
Primary residence
The residence in which you
reside.
Proof of Funds
Verification of financing. Pre prepared financing used to pull the trigger on a
purchase in a swift and timely manner.
PUD - Planned Urban Development property
Rate and Term
refinance
A refinancing of a current 1st
mortgage and or 2nd (sometimes the 2nd must be "purchase money" or seasoned for
12 months) with out exceeding 1% cash out. Rate and term describes
the purpose or nature of the loan.
Second Home
Vacation/recreation home. Not investment property.
Second Mortgage
Second and 1st mortgages are different for a number of reasons. Typically
they are smaller in loan size and for a shorter period of time and are almost
always a fixed rate, often a 15 or 20 year tem, amortized over 30 years with a
balloon note, a large payment of the balance after the term is over. The term
may be a equity line of credit with an adjustable rate tied to an index, most
often the Libor index, often called a HELOC; Home Equity Line Of Credit. As you
probably know, a second mortgage subordinates the 1st mortgage lien or is in
"2nd" position on title behind the 1st mortgage. A second mortgage can be part
of a 1st and 2nd mortgage "combo" loan or may be obtained after the 1st mortgage
is in place. For example, a borrower my obtain and "80%/15%" combo purchase
mortgage loan. This type of loan program is from the same lender, however the
2nd can be obtained from another lender if the terms or conditions are favorable
and the 1st mortgage lender allows it. A borrower may wish to acquire a Stand
Alone 2nd against the equity in their home or non owner occupied property to get
"cash out" for a number of reasons, to consolidate consumer or private debt,
home improvements or for their children's education.
Short Sale
A short sale is a sale of a piece of real estate in which the selling price is
less than the existing balance of the mortgage or total liens on the property.
Typically this is done when the owner of the property can no longer afford the
mortgage payments and the lien holder agrees to sell it at the reduced price;
the current market value which creates a deficiency for the bank, hence the
term, short sale. This agreement between the home owner and the bank doesn't
eliminate the obligation from the home owner unless it is specifically stated in
the agreement. A short sale is a foreclosure alternative.
SISA - Stated Income / Stated Assets
SIVA
- Stated Income / Verified Assets
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" the borrowers income amount on
the application to the lender. The lender typically will require a written or
verbal Verification Of Employment/VOE from the borrowers employer, (processor
will handle) indicating employment status, and for the self employed borrowers,
the lender will typically require a business license, CPA letter or
"blacked out" 1099. Every lender can potentially have different guidelines, so
the meaning or exact definition for the term/guideline "stated income" can
differ slightly between lenders. For the application, typically will be
their employer, address of the employer, length of time, job occupation and
income.
The only part that is stated in the income figure itself. Or in the case
of utilizing a SIVA program, both the income and Assets are stated.
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.
Super Jumbo Mortgage
A Super Jumbo Mortgage is a super big loan amount, typically larger than
$1,000,000. These kinds loan amounts are generally more difficult to qualify or
requires deeper type qualifications i.e. more disposable income or more money in
the bank (liquid reserves), seasoned for a longer period of time, in some case
(per lender guidelines) criteria as long as 6 months. BrokerMortgages.com has
access, via our extensive network of select qualified industry professionals a
variety of Super Jumbo Mortgage loan programs.
Tradeline
1 credit account as it shows on your credit report.
Wage Earner
W-2 employee making the majority of their income from salary pay.
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