At Loanwize.com and Schaffer Mortgage Corporation, our mission is to set a high standard in the mortgage industry. We are committed to quality, personal customer service, we always
put the people we serve first. We adhere to the highest degree
of integrity in all of our business dealings. We are a small,
family based company who treats each and every one of our clients
like a person, not a number.
At , you can
always count on:
Fast Approvals
We use our top of the line technology to cut down on processing
time and can often give you a pre-approval within hours.
Free Pre-Qualifications and Consultations
Let us help you find the perfect program for you! We have a
variety of programs that are designed to help you, no matter
what your situation is!
|
Acceleration
The right of the mortgagee (lender) to demand the immediate repayment of the
mortgage loan balance upon the default of the mortgagor (borrower), or by using
the right vested in the Due-on-Sale Clause.
Is a mortgage in which the interest rate is adjusted periodically based on a
preselected index. Also sometimes known as the re-negotiable rate mortgage, the
variable rate mortgage or the Canadian rollover mortgage.
On an adjustable rate mortgage, the time between changes in the interest rate
and/or monthly payment, typically one, three or five years, depending on the
index.
Means loan payment by equal periodic payment calculated to pay off the debt at
the end of a fixed period, including accrued interest on the outstanding balance.
Is a interest rate reflecting the cost of a mortgage as a yearly rate. This rate
is likely to be higher than the stated note rate or advertised rate on the mortgage,
because it takes into account point and other credit cost. The APR allows home
buyers to compare different types of mortgages based on the annual cost for each
loan.
An estimate of the value of property, made by a qualified professional called
an "appraiser".
A local tax levied against a property for a specific purpose, such as a sewer
or street lights.
The agreement between buyer and seller where the buyer takes over the payments
on an existing mortgage from the seller. Assuming a loan can usually save the
buyer money since this is an existing mortgage debt, unlike a new mortgage where
closing cost and new, probably higher, market-rate interest charges will apply.
Usually a short-term fixed-rate loan which involves small payments for a certain
period of time and one large payment for the remaining amount of the principal
at a time specified in the contract.
A mortgage covering at least two pieces of real estate as security for the same
mortgage.
One who applies for and receives a loan in the form of a mortgage with the intention
of repaying the loan in full.
An individual in the business of assisting in arranging funding or negotiating
contracts for a client buy who does not loan the money himself. Brokers usually
charge a fee or receive a commission for their services.
When the lender and/or the home builder subsidized the mortgage by lowering the
interest rate during the first few years of the loan. While the payments are
initially low, they will increase when the subsidy expires.
The amount of cash derived over a certain period of time from an income-producing
property. The cash flow should be large enough to pay the expenses of the income
producing property (mortgage payment, maintenance, utilities, etc).
Consumer safeguards which limit the amount the interest rate on an adjustable
rate mortgage may change per year and/or the life of the loan.
Consumer safeguards which limit the amount monthly payments on an adjustable
rate mortgage may change.
The document given to qualified veterans which entitles them to VA guaranteed
loans for homes, business, and mobile homes. Certificates of eligibility may
be obtained by sending DD-214 (Separation Paper) to the local VA office with
VA form 1880 (request for Certificate of Eligibility).
An appraisal issued by the Veterans Administration showing the property's current
market value
The document given to veterans or reservists who have served 90 days of continuous
active duty (including training time) It may be obtained by sending DD 214 to
the local VA office with form 26-8261a (request for certificate of veteran status).
This document enables veterans to obtain lower down payments on certain FHA insured
loans.
The meeting between the buyer, seller and lender or their agents where the property
and funds legally change hands. Also called settlement. Closing costs usually
include an origination fee, discount points, appraisal fee, title search and
insurance, survey, taxes, deed recording fee, credit report charge and other
costs assessed at settlement. The cost of closing usually are about 3 percent
to 6 percent of the mortgage amount.
A promise by a lender to make a loan on specific terms or conditions to a borrower
or builder. A promise by an investor to purchase mortgages from a lender with
specific terms or conditions. An agreement, often in writing, between a lender
and a borrower to loan money at a future date subject to the completion of paper
work or compliance with stated conditions.
A short term interim loan to pay for the construction of buildings or homes.
These are usually designed to provide periodic disbursements to the builder as
he progresses.
A contract between purchaser and a seller of real estate to convey title after
certain
A mortgage not insured by FHA or guaranteed by the VA.
A report documenting the credit history and current status of a borrower's credit
standing.
The ratio, expressed as a percentage, which results when a borrower's monthly
payment obligation on long-term debts is divided by his or her gross monthly
In many states, this document is used in place of a mortgage to secure the payment
of a note.
Failure to meet legal obligations in a contract, specifically, failure to make
the monthly payments on a mortgage.
When a mortgage is written with a monthly payment that is less than required
to satisfy the note rate, the unpaid interest is deferred by adding it to the
loan balance. See negative amortization.
Failure to make payments on time. This can lead to foreclosure.
An independent agency of the federal government which guarantees long-term, low-or
no-down payment mortgages to eligible veterans.
See point.
Money paid to make up the difference between the purchase price and the mortgage
amount.
A provision in a mortgage or deed of trust that allows the lender to demand immediate
payment of the balance of the mortgage if the mortgage holder sells the home.
Money given by a buyer to a seller as part of the purchase price to bind a transaction
or assure payment.
The VA home loan benefit is called entitlement. Entitlement for a VA guaranteed
home loan. This is also known as eligibility.
Is a federal law that requires lenders and other creditors to make credit equally
available without discrimination based on race, color, religion, national origin,
age, sex, marital status or receipt of income from public assistance programs.
The difference between the fair market value and current indebtedness, also referred
to as the owner's interest. The value an owner has in real estate over and above
the obligation against the property.
An account held by the lender into which the home buyer pays money for tax or
insurance payments. Also earnest deposits held pending loan closing.
see Federal National Mortgage Association.
Provides financing to farmers and other qualified borrowers who are unable to
obtain loans elsewhere.
The former namefor the regulatory and supervisory agency forfederally chartered
savings institutions. Agency is now called the Office of Thrift Supervision
Is a quasi-governmental agency that purchases conventional mortgage from insured
depository institutions and HUD-approved mortgage bankers.
A division of the Department of Housing and Urban Development. Its main activity
is the insuring of residential mortgage loans made by private lenders. FHA also
sets standards for underwriting mortgages.
A tax-paying corporation created by Congress that purchases and sells conventional
residential mortgages as well as those insured by FHA or guaranteed by VA. This
institution, which provides funds for one in seven mortgages, makes mortgage
money more available and more affordable.
A loan insured by the Federal Housing Administration open to all qualified home
purchasers. While there are limits to the size of FHA loans ($155,250 as of 1/1/96),
they are generous enough to handle moderately-priced homes almost anywhere in
the country.
Requires a fee (up to 2.25 percent of the loan amount) paid at closing to insure
the loan with FHA. In addition, FHA mortgage insurance requires an annual fee
of up to 0.5 percent of the current loan amount, paid in monthly installments.
The lower the down payment, the more years the fee must be paid.
The Federal Home Loan Mortgage Corporation provides a secondary market for savings
and loans by purchasing their conventional loans. Also known as "Freddie
Mac."
A promise by FHA to insure a mortgage loan for a specified property and borrower.
A promise from a lender to make a mortgage loan.
The mortgage interest rate will remain the same on these mortgages throughout
the term of the mortgage for the original borrower.
The Federal National Mortgage Association is a secondary mortgage institution
which is the largest single holder of home mortgages in the United States. FNMA
buys VA, FHA, and conventional mortgages from primary lenders. Also known as "Fannie
Mae."
A legal process by which the lender or the seller forces a sale of a mortgaged
property because the borrower has not met the terms of the mortgage. Also known
as a repossession of property.
See Federal Home Loan Mortgage Corporation.
See Government National Mortgage Association.
Government National Mortgage Association (GNMA)
A type of flexible-payment mortgage where the payments increase for a specified
period of time and then level off. This type of mortgage has negative amortization
built into it.
A promise by one party to pay a debt or perform an obligation contracted by another
if the original party fails to pay or perform according to a contract.
A form of insurance in which the insurance company protects the insured from
specified losses, such as fire, windstorm and the like.
The ratio, expressed as a percentage, which results when a borrower's housing
expenses are divided by his/her gross monthly income. See debt-to-income ratio.
Impound
That portion of a borrower's monthly payments held by the lender or servicer
to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other
items as they become due. Also known as reserves.
A published interest rate against which lenders measure the difference between
the current interest rate on an adjustable rate mortgage and that earned by other
investments (such as one- three-, and five-year U.S. Treasury security yields,
the monthly average interest rate on loans closed by savings and loan institutions,
and the monthly average costs-of-funds incurred by savings and loans), which
is then used to adjust the interest rate on an adjustable mortgage up or down.
A construction loan made during completion of a building or a project. A permanent
loan usually replaces this loan after completion.
A money source for a lender.
A loan which is larger (more than $214,600 as of 1/1/97) than the limits set
by the Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation. Because jumbo loans cannot be funded by these two agencies, they
usually carry a higher interest rate.
A claim upon a piece of property for the payment or satisfaction of a debt or
obligation.
The relationship between the amount of the mortgage loan and the appraised value
of the property expressed as a percentage.
The amount a lender adds to the index on an adjustable rate mortgage to establish
the adjusted interest rate.
The highest price that a buyer would pay and the lowest price a seller would
accept on a property. Market value may be different from the price a property
could actually be sold for at a given time.
It is insurance from FHA to the lender against incurring a loss on account of
the borrower's default.
Money paid to insure the mortgage when the down payment is less than 20 percent.
See private mortgage insurance, FHA mortgage insurance.
The lender.
The borrower or homeowner.
Occurs when your monthly payments are not large enough to pay all the interest
due on the loan. This unpaid interest is added to the unpaid balance of the loan.
The danger of negative amortization is that the home buyer ends up owing more
than the original amount of the loan.
The borrower's gross income minus federal income tax.
A statement in a mortgage contract forbidding the assumption of the mortgage
without the prior approval of the lender. Note: The signed obligation to pay
a debt, as a mortgage note.
The regulatory and supervisory agency for federally chartered savings institutions.
Formally known as Federal Home Loan Bank Board.
The fee charged by a lender to prepare loan documents, make credit checks, inspect
and sometimes appraise a property; usually computed as a percentage of the face
value of the loan.
A long term mortgage, usually ten years or more. Also called an "end loan."
Principal, Interest, Taxes and Insurance. Also called monthly housing expense.
Money is placed in a pledged savings account and this fund plus earned interest
is gradually used to reduce mortgage payments.
Prepaid interest assessed at closing by the lender. Each point is equal to 1
percent of the loan amount (e.g., two points on a $100,000 mortgage would cost
$2,000).
A legal document authorizing one person to act on behalf of another.
Necessary to create an escrow account or to adjust the seller's existing escrow
account. Can include taxes, hazard insurance, private mortgage insurance and
special assessments.
A privilege in a mortgage permitting the borrower to make payments in advance
of their due date.
Money charged for an early repayment of debt. Prepayment penalties are allowed
in some form (but not necessarily imposed) in many states.
Lenders making mortgage loans directly to borrower's such as savings and loan
associations, commercial banks, and mortgage companies. These lenders sometimes
sell their mortgages into the secondary mortgage markets such as to FNMA or GNMA,
etc.
The amount of debt, not counting interest, left on a loan.
In the event that you do not have a 20 percent down payment, lenders will allow
a smaller down payment - as low as 5 percent in some cases. With the smaller
down payment loans, however, borrowers are usually required to carry private
mortgage insurance. Private mortgage insurance will usually require an initial
premium payment and may require an additional monthly fee depending on you loan's
structure.
A real estate broker or an associate holding active membership in a local real
estate board affiliated with the National Association of Realtors.
The cancellation of a contract. With respect to mortgage refinancing, the law
that gives the homeowner three days to cancel a contract in some cases once it
is signed if the transaction uses equity in the home as security.
Money paid to the lender for recording a home sale with the local authorities,
thereby making it part of the public records.
Obtaining a new mortgage loan on a property already owned. Often to replace existing
loans on the property.
A loan in which the interest rate is adjusted periodically. See adjustable rate
mortgage.
Short for the Real Estate Settlement Procedures Act. RESPA is a federal law that
allows consumers to review information on known or estimated settlement cost
once after application and once prior to or at a settlement. The law requires
lenders to furnish the information after application only.
A form of mortgage in which the lender makes periodic payments to the borrower
using the borrower's equity in the home as Satisfaction of Mortgage: The document
issued by the mortgagee when the mortgage loan is paid in full. Also called a "release
of mortgage."
A mortgage made subsequent to another mortgage and subordinate to the first one.
The place where primary mortgage lenders sell the mortgages they make to obtain
more funds to originate more new loans. It provides liquidity for the lenders.
Security.
All the steps and operations a lender performs to keep a loan in good standing,
such as collection of payments, payment of taxes, insurance, property inspections
and the like.
Settlement/Settlement
Costs
See closing/closing costs.
A mortgage in which a borrower receives a below-market interest rate in return
for which the lender (or another investor such as a family member or other partner)
receives a portion of the future appreciation in the value of the property. May
also apply to mortgage where the borrowers shares the monthly principal and interest
payments with another party in exchange for part of the appreciation.
Interest which is computed only on the principle balance.
A measurement of land, prepared by a registered land surveyor, showing the location
of the land with reference to know points, its dimensions, and the location and
dimensions of any buildings.
Equity created by a purchaser performing work on a property being purchased.
A document that gives evidence of an individual's ownership of property.
A policy, usually issued by a title insurance company, which insures a home buyer
against errors in the title search. The cost of the policy is usually a function
of the value of the property, and is often borne by the purchaser and/or seller.
Policies are also available to protect the lender's interests.
An examination of municipal records to determine the legal ownership of property.
Usually is performed by a title company.
A federal law requiring disclosure of the Annual Percentage Rate to home buyers
shortly after they apply for the loan. Also known as Regulation Z.
A mortgage in which the borrower receives a below-market interest rate for a
specified number of years (most often seven or 10), and then receives a new interest
rate adjusted (within certain limits) to market conditions at that time. The
lender sometimes has the option to call the loan due with 30 days notice at the
end of seven or 10 years. Also called "Super Seven" or "Premier" mortgage.
The decision whether to make a loan to a potential home buyer based on credit,
employment, assets, and other factors and the matching of this risk to an appropriate
rate and term or loan amount.
Interest charged in excess of the legal rate established by law.
A long-term, low-or no-down payment loan guaranteed by the Department of Veterans
Affairs. Restricted to individuals qualified by military service or other entitlements.
A premium of up to 1-7/8 percent (depending on the size of the down payment)
paid on a VA-backed loan. On a $75,000 fixed-rate mortgage with no down payment,
this would amount to $1,406 either paid at closing or added to the amount financed.
See adjustable rate mortgage.
A document signed by the borrower's financial institution verifying the status
and balance of his/her financial accounts.
A document signed by the borrower's employer verifying his/her position and salary.
Many mortgage firms must borrow funds on a short term basis in order to originate
loans which are to be sold later in the secondary mortgage market (or to investors).
When the prime rate of interest is higher on short term loans than on mortgage
loans, the mortgage firm has an economic loss which is offset by charging a warehouse
fee.
Results when an existing assumable loan is combined with a new loan, resulting
in an interest rate somewhere between the old rate and the current market rate.
The payments are made to a second lender or the previous homeowner, who then
forwards the payments to the first lender after taking the additional amount
off the top.
|
