Matching Pairs

This evaluates each property during the loan approval process to assign a dollar value to the property for confirming a suitable loan-value ratio. This value can affect the amount of money the lender is willing to lend to the borrower for that purchase.

This is not to be confused with an appraisal and is calculated by the property assessor in the town, city or municipality where the property is located. Property taxes are based on this value, which includes numerous factors, including recent sale price, improvements to the property, and local market conditions.

The interest rate is typically fixed for the first several years of the mortgage, often a low rate, and then changes on a monthly, annual or other set interval basis, typically after three to five years.

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 prime.

The payment of principal and interest in regular intervals over a period to pay off a debt.

This loan category is assigned to borrowers who are higher risk than A-paper but less risky than subprime. They often have good credit, but the borrowers might have inadequate or limited documentation supporting their incomes.

The original borrower can transfer the loan to a new owner of that same property, without the buyer having to qualify for a new mortgage.

Borrowers completethese, usually with the lender's assistance. They contain personal and financial information including assets, debt, income, expenses and employment details and are the borrower's formal request for financing. The lender uses the information they contain to make a loan approval decision.

Requires immediate repayment of the outstanding loan balance, excluding interest when a borrower misses too many payments; defaults on the mortgage; or otherwise breaches the contract.

An underwriter's tool to calculate a borrower's debt to income ratio in situations where the borrower owns significant assets but insufficient income to qualify for a loan. To qualify, the present value of the asset must be determinable (such as a retirement account) the assets must be liquid, such as cash, bonds, or stock, and the borrower is not already receiving income from the assets. The underwriter assumes the borrower would repay the loan by withdrawing funds from their liquid assets over the term of the loan..

Application

A-paper

Amortization

Asset depletion

Alt-A paper

Adjustable-rate mortgage (ARM)

Acceleration clause

Appraisal

Assessed value

Assumable mortgage