Ginnie Mae
See Government
National Mortgage Association.
Also
known as Ginnie Mae, provides sources of
funds for residential mortgages, insured
or guaranteed by FHA or VA.
Graduated Payment
Mortgage (GPM)
A
type of flexible-payment mortgage where
the payments increase for a specified period
of time and then level off. This type of
mortgage has negative amortization built
into it.
Gross Monthly Income
The
total amount the borrower earns per month,
before any expenses are deducted.
Guarantee
A
promise by one party to pay a debt or perform
an obligation contracted by another if
the original party fails to pay or perform
according to a contract.
Hazard Insurance
A
form of insurance in which the insurance
company protects the insured from specified
losses, such as fire, windstorm and the
like.
Housing Expenses-to-Income
Ratio
The
ratio, expressed as a percentage, which
results when a borrower's housing expenses
are divided by his/her gross monthly
income.
Impound
That
portion of a borrower's monthly payments
held by the lender or servicer to pay for
taxes, hazard insurance, mortgage insurance,
lease payments, and other items as they
become due. Also known as reserves.
Index
A
published interest rate against which lenders
measure the difference between the current
interest rate on an adjustable rate mortgage
and that earned by other investments (such
as one,- three-, and five-year U.S. Treasury
Security yields, the monthly average interest
rate on loans closed by savings and loan
institutions, and the monthly average Costs-of-Funds
incurred by savings and loans), which is
then used to adjust the interest rate on
an adjustable mortgage up or down.
Investor
Money
source for a lender.
Jumbo Loan
A
loan which is larger than the limits set
by the Federal National Mortgage Association
and the Federal Home Loan Mortgage Corporation.
Because jumbo loans cannot be funded by
these two agencies, they usually carry
a higher interest rate.
Lien
A
claim upon a piece of property for the
payment of satisfaction of a debt or obligation.
Loan-To-Value Ratio
The
relationship between the amount of the
mortgage loan and the appraised value of
the property expressed as a percentage.
Margin
The
amount a lender adds to the index on an
adjustable rate mortgage to establish the
adjusted interest rate.
Market Value
The
highest price that a buyer would pay and
the lowest price a seller would accept
on a property. Market value may be different
from the price a property could actually
be sold for at a given time.
Mortgage Insurance
Money
paid to insure the mortgage when the down
payment is less than 20 percent. See Private
Mortgage Insurance.
Mortgagee
The
lender.
Mortgagor
The
borrower or homeowner.
Negative Amortization
Occurs
when your monthly payments are not large
enough to pay all the interest due on the
loan. This unpaid interest is added to
the unpaid balance of the loan. The danger
of negative amortization is that the homebuyer
ends up owing more than the original amount
of the loan.
Net Income
The
borrower's gross income minus federal income
tax.
Non-Assumption Clause
A
statement in a mortgage contract forbidding
the assumption of the mortgage without
the prior approval of the lender.
Origination Fee
The
fee charged by a lender to prepare loan
documents, make credit checks, inspect
and sometimes appraise a property; usually
computed as a percentage of face value
of the loan.
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