Posts Tagged ‘reverse mortgage glossary’Glossary Posted on Reverse Mortgage GuidesFriday, August 14th, 2009
Are any terms missing? Contact us to let us know. Reverse Mortgage Glossary – Part 2Thursday, July 16th, 2009
Mortgage Terminology Part 2: LIBOR –London Interbank Offered Rate – An international index determined on the basis of the worldeconomy and widely used for ARM loans in the United States. Mortgage Servicer – handles reverse mortgage after it is closed; esnures terms of reverse mortgage are kept by both sides. Principal Limit- The total loan proceeds available at origination from the reverse mortgage. Principal Residence – The dwelling where the borrower maintains his or her permanent place of abode and spends the majority of the calendar year. The borrower may have only one Principal Residence at a time. Processor – Person that handles reverse mortgage process between time of application and closing. Refinance – the process of paying off one loan with the proceeds from a new loan secured by the same property. Settlement – See “Closing.” Title – A legal document establishing the right of ownership. Title Search – A check of public records to ensure that a person is the legal owner of a property and that there are no liens or other claims outstanding on the property. Reverse Mortgage Glossary – Part 1Tuesday, July 14th, 2009
Mortgage Terminology Part 1: Adjustable-Rate Mortgage (ARM)- A loan with an interest rate that changes with market conditions on pre-determined dates. Appraisal- A report that states an opinion on the value of a property based on its characteristics and the selling prices of similar properties or comparable properties in the area. Appreciation- An increase in the value of a house due to changes in market conditions or other causes. Closing – The final step after a lender approves an application. The occasion when a borrower signs loan documents, including the mortgage or deed of trust, and when closing costs are paid. Also referred to as “settlement.” CMT – Constant Maturity Treasury – Also often known as a “treasury bill” or “T-Bill,” it helps set the interest rate for some adjustable rate mortgages. Deed of Trust- The legal document encumbering title to a property. Equity- The portion of the value of the property that exceeds the current amount of your home loan. If, for example, the property is worth $100,000 and the loan is for $75,000, then there is $25,000 (25% equity) remaining in your home. Fixed-Rate Mortgage – A loan with a pre-determined interest rate that is agreed upon for the term of the loan. HECM (Home Equity Conversion Mortgage) – The most common type of FHA insured mortgage. HECMs encompass 100% of reverse mortgage transactions in 2009, and 99% in 2008. HELOC (Home Equity Conversion Loan) – a loan sometimes mistakenly considered similar to a reverse mortgage.
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