An amount of money owed to another person or organization.
Investment in the financing of property or of some endeavor, in which the investor loaning funds does not own the property or endeavor, nor share in its profits. If property is pledged, or mortgaged, as security for the loan, the investor may claim the property to repay the debt if the borrower defaults on payments. Also see equity investment.
A comparison of gross income to housing and non-housing expenses; with the U.S. Federal Housing Administration, the-monthly mortgage payment should be no more than 29% of monthly gross income (before taxes) and the mortgage payment combined with non-housing debts should not exceed 41% of income.
The document that transfers ownership of a property.
Deed of Trust
Essentially the same thing as a mortgage record, it is used by some states (such as California) as an alternative.
To avoid foreclosure ('in lieu' of foreclosure), a deed is given to the lender to fulfill the obligation to repay the debt; this process doesn't allow the borrower to remain in the house but helps avoid the costs, time, and effort associated with foreclosure.
The inability to pay monthly mortgage payments in a timely manner or to otherwise meet the mortgage terms.
Deferring unpaid interest by adding it to the loan balance; occurs when a mortgageās monthly payment is less than adequate to cover the note rate (see negative amortization).
Failure of a borrower to make timely mortgage payments under a loan agreement.
Demand Note (Demand Mortgage)
A note or mortgage that the lender can call due at any time without prior notice.
Department of Veterans Affairs (VA)
A U.S. federal agency that guarantees loans made to veterans; similar to mortgage insurance, a loan guarantee protects lenders against loss that may result from a borrower default.
Deposit (Earnest Money)
Money put down by a potential buyer to show that he or she is serious about purchasing the home; it becomes part of the down payment if the offer is accepted, is returned if the offer is rejected, or is forfeited if the buyer pulls out of the deal.
A decline in the value of a property. Can be listed as an expense to reduce taxable income; because no money is actually paid, lenders will count it as income for self-employed borrowers.
Amount by which the purchase price of a security is less than its par value, which raises the effective yield of the security above the coupon rate.
Normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount, discount points are paid to reduce the interest rate on a loan.
The portion of a home's purchase price that is paid in cash and is not part of the mortgage loan.
Due-on-Sale Clause (Due-on-Sale Provision)
A provision in a mortgage or deed of trust enabling the lender to demand instant payment of the balance of the mortgage when the mortgagor sells the home.
Living quarters consisting of contiguous rooms intended for convenient, long-term occupancy by one family and providing complete, independent facilities for living, eating, cooking, sleeping and sanitation.