Home Buyer and House Plan Terms and Definitions - Part V
Mortgage Broker - A broker who represents numerous lenders and helps consumers find affordable mortgages; the broker charges a fee only if the consumer finds a loan.
Mortgage Commitment - A formal written communication by a lender, agreeing to make a mortgage loan on a specific property, specifying the loan amount, length of time and conditions.
Mortgage Company (Mortgage Banker) - A company that borrows money from a bank, lends it to consumers who want to buy homes, then sells the loans to investors.
Mortgagee - The lender who makes a mortgage loan.
Mortgage Loan - A contract in which the borrower’s property is pledged a s collateral and which can be repaid in installments over a long period. The mortgagor (buyer) promises to repay principal and interest, to keep the home insured, to pay all taxes, and to keep the property in good condition.
Mortgage Origination Fee - A charge by a lender for the work involved in preparing and servicing a mortgage application (usually 1 percent of the loan amount).
Negative Amortization - An increase in the outstanding balance of a loan when a monthly payment is not large enough to cover all of the interest due.
Note - A formal document showing the existence of a debt and stating the terms of repayment.
PITI - Principal, interest, taxes, and insurance (the 4 major components of monthly housing payments).
Point - A charge of 1 percent of the mortgage amount. Points are a one-time charge assessed by the lender at closing to increase the interest yield on a mortgage loan.
Prepayment - Payment of all or part of a debt prior to its maturity.
Principal - The amount borrowed in a loan, excluding interest and other charges.
Property Survey - A survey to determine the boundaries of your property. The cost will depend on the complexity of the survey.
Rapid Payoff Mortgage - (See Growing Equity Mortgage).
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