- No out of pocket cost loan
A loan in which the fees the borrower(s) are not
required to pay cash out-of-pocket at closing for the normal closing costs. The
lender typically includes the closing costs in the principal balance or charges
a higher interest rate than for a loan with closing costs to cover the advance
of closing costs.
- Non Owner Occupied
- A classification used in
mortgage origination, risk-based pricing and housing statistics for one to
four-unit investment properties. The property is not occupied by the
owner. The term non-owner occupied is not typically used for multi-family
rental properties, such as apartment buildings.
- Non-liquid asset
An asset that cannot easily be converted into cash.
- Non-Recurring Closing Closts
-
Non-recurring
closing costs are
those one time costs associated with the home buying and mortgage qualifying
process. These closing costs only occur once at the close of
the transaction. Typical non-recurring closing costs include
Mortgage Points, Title, Escrow, Appraisal, Credit Report, Document
Preparation, Property Inspection, Termite Inspection, Underwriting and
other miscellaneous charges.
- Notary
- A notary is a person licensed by the state to witness the signing of
your loan documents. Mobile notary service is available to have you
sign docs in the comfort of your own home.
- Note
A legal document that obligates a borrower to repay a
mortgage loan at a stated interest rate during a specified period of time.
- Note Rate
The interest rate stated on a mortgage note.
- Notice of Default
A formal written notice to a borrower that a default
has occurred and that legal action may be taken
- Open End Mortgage
- A mortgage permitting the mortgagor to borrow
additional money under the same mortgage, with certain conditions,
usually as to the assets of the mortgage.
- Original Principal Balance
The total amount of principal owed on a mortgage
before any payments are made
- Origination fee
A fee paid to a lender for processing a loan
application, making a home loan, and recording a mortgage against the
borrower's real property as security for repayment of the loan. The origination
fee is stated in the form of points. One point is 1% of the mortgage amount
(e.g., 1,000 on a $100,000 loan).
- Partial Payment
A payment that is not sufficient to cover the
scheduled monthly principal and interest payment on a mortgage loan.
- Payment Change Date
The date when a new monthly payment amount takes
effect on an adjustable rate mortgage (ARM). Generally, the payment change date
occurs in the month immediately after the adjustment date and the borrower is
notified 30 days prior as to the new rate
- Payoff
To pay the outstanding balance of a loan in full.
- Payoff Statement (or Demand)
A document
detailing the remaining balance of a loan to be paid off. This is provided by the current lender or
note holder.
- Periodic Payment cap
A provision of an adjustable-rate mortgage (ARM) that
limits how much the interest rate or loan payments may increase or decrease. In
upward rate markets, it protects the borrower from large increases in the
interest rate or monthly payment at each adjustment period. See cap.
- Periodic Rate Cap
A provision of an adjustable-rate mortgage (ARM) that
limits how much the interest rate or loan payments may increase or decrease. In
upward rate markets, it protects the borrower from large increases in the
interest rate or monthly payment at each adjustment period. See cap.
- Personal Property
Any property that is not real property or is not
permanently fixed to land. Cash, furniture, and cars are all examples of
personal property.
- Piggyback
A combination of two loans. Example: A loan is made
for 90% of the home price. 80% of the purchase price is supplied by a 1st
mortgage and 10% by a 2nd mortgage. The 2nd mortgage is piggybacked on the 1st.
- PITI
See principal, interest, taxes, and insurance (PITI).
- PITI reserves
A cash amount that a borrower must
have on hand after making a down payment and paying all closing costs for the
purchase of a home. The principal, interest, taxes, and insurance (PITI)
reserves must equal the amount that the borrower would have to pay for PITI for
a predefined number of months.
- Point
A one-time charge by the lender for originating a
loan. A point is 1% of the amount of the mortgage (e.g., 1,000 on a $100,000
loan).
- Points
- A fee charged by the lender as additional compensation for making the
loan. One "point" is equal to 1% of the principal amount of the loan.
- Power of Attorney
A legal document authorizing one person to act on
another's behalf. A power of attorney can grant complete authority or can be
limited to certain acts and/or certain periods of time.
- Pre-approval
A lender's conditional agreement to
lend a specific amount on specific terms to a homebuyer. The commitment remains
as long as the borrower still meets the qualification requirements at the time
of purchase.
Loan Glossary 
