Matching Pairs Mortgage and Loans -O-P-Online version Match common mortagage underwriting terms in English to their definitions. by Linda Asher 1 Principal limit factor 2 Prepayment 3 Pre-approval 4 Pre-qualified 5 Prepayment penalty 6 Overlay 7 PMI 8 Principal 9 Pre-qualification 10 Portfolio lender 11 Pre-approved 12 Processing 13 Prime 14 Par rate 15 Payment option ARM 16 Origination fee 17 Purchase money mortgage 18 PITI 19 Paper 20 Originator Borrowers gain this label when a lender has stated that they will be able to obtain financing for a specified loan amount, assuming the personal and financial information the borrower supplied to the lender is true and accurate. Shorthand for the classification of mortgage loans that lenders use to describe varying levels of borrower default risk, it is usually expressed in terms of A-paper or Alt-a paper. This is the lender, mortgage broker or other party that works with a borrower to complete the loan application process . The process carried out by this figure for a loan typically requires submitting the loan application, gathering documentation, sending the loan to underwriting and completing the transaction with a closing. This is a requirement or condition loan originators add to the minimum standard required by the mortgage insurer (such as the FHA, VA, or USDA) or the loan buyer (usually Freddie Mac or Fannie Mae). A common one is credit score Borrowers who prepay often must pay fees to the lender. Clauses in the loan note determine whether this penalty applies to a borrower's mortgage. A home loan lender that originates, funds, and services a home loan for the life of the loan. Borrowers gain this label when a lender has verified that they will be able to obtain financing for a specified loan amount. This is paying off the mortgage early, either in part or whole. This acronym summarizes the components of a borrower's mortgage payment: principal, interest, taxes, insurance. A borrower pays this fee to cover the lender's cost of processing a loan application. They are typically expressed as a percentage of the loan amount. Short for private mortgage insurance, it is insurance paid by a borrower of a conventional loan that protects a lender against a loss incurred by a borrower default. A loan-to-value ratio above 80 percent for a conventional loan usually triggers a this requirement. Lenders complete these steps to move a borrower's loan application submission to the final closing. It includes gathering and collecting of all documentation — including financial, employment or property information — necessary for the underwriting of the loan. In FHA reverse mortgages, this is expressed as a percentage of the maximum amount the borrower can draw. It varies with the expected interest rate and the age of the youngest borrower. The younger the borrower, the lower the factor, and the less available for the homeowner to borrow. Borrowers who meet specific criteria, such as a minimum credit score of 680, likely earn a place in this loan category. Other criteria include a minimum reserve equal to two months of mortgage payments; no late mortgage, rent or car payments in the past two years; no collections or judgments in the past two years; and no more than two credit card payments made more than 30 days late. It is also called A-paper. This is the amount of the loan balance. Typically, it is included in the monthly mortgage payment paid by the borrower. For a 30-year fixed-rate mortgage, for instance, it is paid monthly so that by the end of the 30-year term, the entire loan amount will have been paid back to the lender. This is the interest rate that a borrower can qualify for with a mortgage lender. It doesn't require a mortgage lender to pay a yield spread premium nor does it require the borrower to pay any discount points to secure that interest rate. It is based on factors such as the borrower's loan amount, credit score and LTV ratio. Lenders issue these statements to spell out the maximum loan amount a borrower can secure financing for based on personal and financial information the borrower has supplied to the lender. The borrower does not submit a loan application and the lender does not verify the information. Often used by a borrower in a hot market to make an offer more enticing to a seller. With this type of adjustable-rate mortgage, the borrower owes more, thanks to a negative amortization structure. A conditional commitment from a lender stating that a borrower can secure financing for a specified loan amount, it is based on the borrower's personal and financial information that the lender has verified to be true. In this process, the borrower completes a loan application and the lender verifies the information. Often used by borrower in a hot market to assure seller that a deal will not fall through because of the buyer's failure to obtain financing. This carries more weight than a pre-qualification This is the mortgage loan a borrower takes out to finance the purchase of real estate property.
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