Loan Terms

Amortization- (1) The liquidation of a financial obligation on an installment basis, which includes both principal and interest. (2) Recovery of cost or value over a period of time. The method or plan for the payment of a debt, bond, deed of trust, etc., by installments or sinking fund.

Annual Percentage Rate- (APR) The cost of credit as determined in accordance with Regulation Z of the Board of Governors of the Federal Reserve System for implementing the Federal Truth in Lending Act. Note: As a Borrower make sure you know the true APR of the loan you receive.

Appraisal- An estimate and opinion of value. An opinion or estimate of the fair market value of a property.

Assessment- A estimate of value established for tax purposes.

Beneficiary- (1) One entitled to benefit from a trust. (2) The lender on the security of a note and deed of trust. The creditor (lender) under a deed of trust.

Escrow-A service provided by a third party to handle and ensure all terms of the sale and or loan contract are completed.

Escrow Fee- Fee charged for providing escrow service.

Impounds-Recurring charges attached to your loan. Typically property taxes and homeowner's insurance.

Impound Account- Account established to collect needed funds for recurring charges. (Property Taxes, Hazard Insurance etc.)

Loan Officer- As I conduct my business is a Real Estate Loan professional who represents you. One who finds financing to meet your needs.

Loan To Value-The percentage of your loan as compared to appraised value.

Loan Origination Fee- Fee charged to establish a new loan. Only when necessary. Many loans do not have this fee.

Mortgagee- The Lender.

Mortgagor- The Borrower.

Private Mortgage Insurance- (PMI) Insurance on loan required when when loan amount exceeds 80% of appraised value. Insures the lender from loss resulting from default. Avoid this when possible. I can show you how.

Title Insurance- Insurance that insures that title of property purchased or refinanced is clear of defect. Two typical types are CLTA, ALTA.

Trustee-One who holds property in trust for another. The person who holds property in trust for another. In a deed of trust, the person who holds bare legal title in trust.

Trustor- (1) One who conveys his or her property to a trustee. (2) The borrower or debtor under a deed of trust.

Trust Deed- Deed given by a borrower to a trustee to be held pending fulfillment of an obligation, which is usually repayment of a loan to a beneficiary. A deed of trust.

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