Matching Pairs Mortgage and Loans -T-YOnline version Match commonly used term in mortgage underwriting In English to their definitions. by Linda Asher 1 USDA mortgage 2 Title search 3 Title insurance 4 Yield-spread premium 5 Tangible net benefit 6 Upfront fee 7 Uniform Residential Loan Application 8 TILA 9 Variable rate 10 Underwriting 11 Verification 12 Teaser rate 13 Underwriter 14 Warranty deed 15 VA 16 Term 17 VA mortgage 18 USDA 19 Treasury bill Here's the acronym for the U.S. Department of Agriculture, also known as the Agriculture Department. Part of its mission is to help rural communities thrive. As a loan application is being processed, this stage is the evaluation of a borrower's loan application to determine whether to extend loan approval for the borrower's purchase. The evaluation includes scrutiny of the property appraisal and the borrower's financial information. Short for Truth in Lending Act, TILA was enacted into federal law in 1968 to protect consumers during dealings with lenders and creditors. It requires lenders to disclose the annual percentage rate (APR) to the borrower through the Truth in Lending disclosure. Sometimes called T-bill, this is the index used in many adjustable-rate mortgages to periodically calculate a borrower's interest rate. It is the short-term debt back by the United States federal government. This legal instrument transfers a seller's interest in a property to the buyer. The seller warrants that the seller is the valid owner of the property, no other party has a claim on the property and it can legally transfer the property. This is the amount of time it will take to repay the loan. For instance, for a typical fixed-rate mortgage it is 30 years. Also known as Form 1003, this is the standardized application a borrower completes to apply for a mortgage loan for a single-family property that Fannie Mae or Freddie Mac will guarantee or secure. When it is worth it to refinance a loan, the borrower captures this: the better terms and rates outweigh the costs of the refinance. For example, a borrower might determine that the long-term savings of refinancing to a lower interest rate outweigh the upfront closing costs of the refinance. These figures evaluate a borrower's creditworthiness for a loan. Their evaluation is based on the property appraisal, the borrower's loan application — which includes verifications and other financial documentation — to determine whether to approve the loan. A mortgage lender may use one within the company or outsource the evaluation to an outside service. Mortgage brokers are compensated with these. The borrower pays an interest rate above the market rate the borrower can qualify for with the mortgage lender. The borrower often receives in return lower upfront costs, or origination fees. Also known as YSP, the premium is paid by the mortgage lender. This is taken out to cover the potential loss of interest in property as a result of a legal defect. It covers the lender, and is usually required for a mortgage. The borrower pays for the policy. The borrower can also take out an owner's policy of this type at the borrower's or seller's cost. This is a short-term, introductory interest rate designed to entice borrowers to take a particular type of loan. This marketing tactic is often used for adjustable-rate mortgages. This rate is usually below the market rate and applies to the first few months of the loan term. Lenders confirm the information a borrower has provided in a loan application to be sure it is true and accurate. In this process the lender may confirm a borrower's income, employment and assets as well as the subject property's appraisal value. The Veterans' Administration offers a home mortgage loan guarantee program, resulting in this type of mortgages. A This mortgage is available to eligible veterans and surviving spouses to help them obtain affordable mortgages for the purchase of a home. These are interest rates that change and fluctuate, usually depending on the rise or fall of a market index. These are also known as floating or adjustable rates. These insured mortgages are available to finance the purchase of property in a suburban or rural area—typically an area with a population no larger than 20,000. If eligible, a borrower can obtain no-down payment financing with low interest rates. This is the acronym for the U.S. Department of Veterans Affairs, a cabinet-level executive department, whose mission is to serve and honor veterans. This one-time funding fee is paid by the borrower to the VA on VA loans (exemption is available for some borrowers with service-connected disabilities). Borrowers can choose to pay the fee upfront or roll it into the loan amount These companies research the history of property ownership to ensure that no other person or entity claims to own it or have a claim against it. Mortgage lenders want to know if there are any outstanding liens, restrictions, taxes or other claims on the property from the current owner and lien holders to previous owners and lien holders. The lender usually engages the services of a professional company or attorney of this type as part of the loan processing and underwriting requirements.
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