A&D MORTGAGE, LLC
Glossary of 60 Common Words Used in Wholesale Mortgage Lending
A mortgage loan with an interest rate that can change periodically, typically based on an index, resulting in varying monthly payments over time.
The process of gradually paying off a mortgage loan through regular monthly payments, which includes both principal and interest.
An evaluation of the property's value by a professional appraiser to determine its market worth.
A computerized system used by lenders to evaluate loan applications and determine the risk and eligibility of borrowers based on predefined criteria.
A type of refinancing where the borrower replaces an existing mortgage loan with a new loan for a higher amount, receiving the difference in cash.
Expenses associated with the closing of a mortgage loan, such as appraisal fees, title insurance, attorney fees, and prepaid items (property taxes, homeowner's insurance, etc.).
A document provided to the borrower before closing that outlines the final terms and costs of the mortgage loan.
The adherence to federal, state, and local laws, regulations, and guidelines governing the mortgage lending industry to ensure fair lending practices and consumer protection.
A mortgage loan that is not insured or guaranteed by a government agency, such as Fannie Mae or Freddie Mac.
A numerical representation of a borrower's creditworthiness, based on their credit history and various factors, used by lenders to assess risk
A financial metric used by lenders to assess the borrower's ability to cover debt obligations, calculated by dividing net operating income by the total debt service.
The ratio of a borrower's total monthly debt payments to their gross monthly income. It helps assess the borrower's ability to manage additional debt.
The initial payment made by the borrower towards the purchase price of a property, expressed as a percentage of the total price.
A mortgage loan insured by the Federal Housing Administration (FHA), typically offering more flexible qualification requirements and lower down payment options.
A mortgage loan with a constant interest rate throughout the loan term, providing consistent monthly payments.
The percentage charged by the lender to borrow the funds, expressed as an annual percentage rate (APR).
Additional underwriting requirements or guidelines imposed by an investor purchasing mortgage loans in the secondary market, which may be more stringent than the standard underwriting guidelines.
The financial institution or entity that provides the funds for the mortgage loan.
A standardized disclosure provided by the lender to the borrower within three business days of receiving a mortgage loan application, outlining the estimated costs and terms of the loan.
The process of creating and submitting a mortgage loan application to a lender for consideration.
The ratio of the mortgage loan amount to the appraised value of the property being financed. It helps determine the risk associated with the loan.
An agreement between the borrower and lender, specifying the terms and conditions, including the interest rate and loan program, for a specific period.
The fixed percentage added to the index rate in an adjustable-rate mortgage (ARM) to determine the interest rate charged to the borrower.
Investments that represent ownership in a pool of mortgage loans, providing investors with a share of the interest and principal
An intermediary who connects borrowers with lenders, helping borrowers find suitable mortgage loan products and assisting them through the application and approval process.
The intentional misrepresentation or omission of information during the mortgage loan application process for financial gain, deceiving the lender or other parties involved.
Insurance required for borrowers who put less than 20% down payment on a conventional mortgage loan to protect the lender against default.
A legal document that outlines the terms of the mortgage loan, including the borrower's promise to repay the loan amount, the interest rate, and the repayment schedule.
The right to service a mortgage loan, including collecting payments, managing escrow accounts, and handling customer service, typically sold by the original lender or servicer.
A secure online licensing system for mortgage loan originators, lenders, and servicers that provides a unique identifier for each registered individual or company, promoting transparency and accountability.
A type of mortgage loan that does not meet the qualified mortgage (QM) standards set by the Consumer Financial Protection Bureau (CFPB).
The source through which a mortgage loan is originated, such as retail (direct to consumers), wholesale (through mortgage brokers), or correspondent (lenders fund loans using their own funds).
A fee charged by the lender or mortgage broker for processing a loan application.
A fee charged by the lender or broker expressed as a percentage of the loan amount. Each point is equal to 1% of the loan amount and is paid upfront to reduce the interest rate.
A preliminary assessment of a borrower's creditworthiness and ability to qualify for a mortgage loan, based on a review of financial information.
An initial assessment of a borrower's eligibility for a mortgage loan, based on self-reported financial information provided by the borrower.
The original amount borrowed in a mortgage loan, excluding interest and other costs.
Insurance required for conventional loans with a down payment of less than 20% to protect the lender in case of borrower default.
A payment made by the borrower or a third party to the lender at closing to reduce the interest rate and monthly mortgage payments for a specified period.
A commitment from the lender to hold a specific interest rate and loan terms for a certain period, typically until the loan closes
A document provided by the lender or wholesale mortgage lender to mortgage brokers, outlining the available interest rates, loan programs, and pricing adjustments.
A loan available to homeowners aged 62 or older, allowing them to convert a portion of their home equity into loan proceeds, which are typically not repaid until the borrower sells the home or passes away.
Insurance that protects the lender and borrower against any potential disputes or claims on the property's ownership.
The process of examining public records to verify the legal ownership of a property and identify any existing liens, encumbrances, or other claims that may affect the property's ownership.
A federal law that requires lenders to disclose key terms and costs of a mortgage loan to borrowers, promoting transparency and consumer protection.
The process of evaluating a borrower's financial information, creditworthiness, and the property being financed to determine whether to approve or deny a mortgage loan application.
A mortgage loan guaranteed by the United States Department of Agriculture (USDA), designed to help low-to-moderate-income borrowers purchase homes in rural areas.
A line of credit provided by a financial institution to mortgage lenders to fund mortgage loans until they are sold on the secondary market.
The practice of providing mortgage loans to mortgage brokers or other financial institutions who then work directly with borrowers.