80/20 Combo Loan

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

ARM - Adjustable Rate Mortgage.

ARV - After Repair Value. Sometimes called After Rehab Value.

ATR - Ability to Repay.

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 nation's leading Automated Valuation providers. 

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

CLTVCombined Loan To Value. The word combined indicates 2nd mortgage combined with a 1st mortgage on the same piece of property; 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
Money was contributed by a 3rd party, often a family member. 3rd party down payment.

DTI - Debt to Income ratio 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.

DSCR - Debt-Service Coverage Ratio

FHA - Federal Housing Administration

Full Doc - Full Documentation, an income documentation program that requires verification of income and employment documentation by providing predetermined types of documentation derived from official underwriting guidelines. A full income documentation 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 purposes. 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.

LOI - Letter of Interest. Hard Money lenders will issue a LOI after underwriting a file to express interest in funding a loan. Similar to a CLA (conditional loan approval) that you would get from a more traditional lender

LTV - Loan to Value is 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 income documentation loan program which means 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 is an official notice from the lien holder bank to the existing borrower indicating that their loan has gone into "default status"

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 without current employment. Also for those who simply do not want to disclose employment information.

N/O/O - Non Owner Occupied or 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) without exceeding 1% cash out. Rate and term describes the purpose or nature of the loan.

Second Home - a non owner occupied property that is not an investment property but a vacation or recreation home.

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 obtains an "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 that permits 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 borrower's 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.