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Negative
Amortization
When monthly payments are not enough to cover interests
costs, they are added to the principal balance, and you
may end up owing more than when you started. This is most
likely to occur with ARMs that have payment caps.
Notary
Public
One who is authorized by federal or local government to
attest authentic signatures and administer oaths.
Note
A written instrument acknowledging a debt and promising
payment
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O -
Offer
A presentation to form a contract or agreement.
Option
A right given, for consideration, to purchase or lease
property upon stipulated terms within a specific period
of time
Origination
Fee
Application fee(s) for processing a proposed mortgage.
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P -
Plat
A map or chart of a lot, subdivision or community drawn
by a surveyor showing boundary lines, buildings, improvements
on the land, and easements.
P.M.I.
(Private Mortgage Insurance)
Insurance which covers a portion of the first mortgage
allowing the lender to offer more lenient terms to a borrower.
Points
Sometimes called "discount points." A point
is one percent of the amount of the mortgage loan. For
example, if a loan is for $25,000, one point is $250.
Points are charged by a lender to raise the yield on his
loan at a time when money is tight, interest rates are
high, and there is a legal limit to the interest rate
that can be charged on a mortgage. Buyers are prohibited
from paying points on HUD or Veterans' Administration
guaranteed loans (sellers can pay, however). On a conventional
mortgage, points may be paid by either buyer or seller
or split between them.
Prepayment
Payment of mortgage loan, or part of it, before due date.
Mortgage agreements often restrict the right of prepayment
either by limiting the amount that can be prepaid in any
one year or charging a penalty for prepayment. The Federal
Housing Administration does not permit such restrictions
in FHA insured mortgages.
Prepayment
Penalty
A penalty within a note, mortgage, or deed of trust imposing
a penalty if the debt is paid in full before the end of
its terms.
Principal
The basic element of the loan as distinguished from interest
and mortgage insurance premium. In other words, principal
is the amount upon which interest is paid.
Purchase
Agreement
An agreement between buyer and seller denoting price and
terms of the sale.
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Q -
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R -
Real
Estate Agent
a licensed person who works under the direction of a broker
selling and renting real estate.
Real
Estate Broker
A middle man or agent who buys and sells real estate for
a company, firm, or individual on a commission basis.
The broker does not have title to the property, but generally
represents the owner.
Realtor
A real estate broker holding membership with the National
Association of Realtors.
Refinancing
The process of the same mortgagor paying off one loan
with the proceeds from another loan.
Restrictive
Covenants
Private restrictions limiting the use of real property.
Restrictive covenants are created by deed and may "run
with the land," binding all subsequent purchasers
of the land, or may be "personal" and binding
only between the original seller and buyer. The determination
whether a covenant runs with the land or is personal is
governed by the language of the covenant, the intent of
the parties, and the law in the State where the land is
situated. Restrictive covenants that run with the land
are encumbrances and may affect the value and marketability
of title. Restrictive covenants may limit the density
of buildings per acre, regulate size, style or price range
of buildings to be erected, or prevent particular businesses
from operating or minority groups from owning or occupying
homes in a given area. (This latter discriminatory covenant
is unconstitutional and has been declared unenforceable
by the U.S. Supreme Court.)
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