Key Mortgage Terms

Acceleration:
The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor (borrower), or by using the right vested in the Due-on-Sale Clause.

Fixed Rate Mortgage
A mortgage where the interest rate remains the same through the life of the loan.

Interest Only
A mortgage option which allows the borrower to pay only the interest portion of their payment for some period of time.

Mortgage
A written document which shows evidence of a lien on a property by a lender as security that the loan will be repaid.

PITI
An abbreviation for total payment meaning principal, interest, taxes, and insurance.

Amortization
This is the repayment of a loan through a schedule of periodic and timely payments.

Appraisal
A professional estimate of value. This is based on most recent sold comparable properties. It is necessary for the Mortgage Lender to determine the amount of money it will loan. This is performed by a qualified professional Appraiser.

Annual percentage rate (A. P. R.)
Is the interest rate reflecting the cost of a mortgage as a yearly rate? This measurement of rates is likely to be a little higher than the stated mortgage note rate or advertised rate on the mortgage. It takes into account points and other mortgage related origination costs. You can find the A.P.R. on the mortgage disclosure document.

Closing Costs
Cost associated with applying and closing for a mortgage, these are the fees on the Good Faith Estimate ( GFE )

Borrowers Authorization
A written authorization from the borrower in favor of the lender to gather the necessary informaition about them.

B/C Loan
A loan with many different possible disqualifying charactaristics. These may include larger loan amounts, property type (such as number of units or zoning), or credit problems, etc..

Caps (interest)
Consumer safeguards put in place to limit the amount the interest rate on an adjustable rate mortgage may change per adjustment period. It is in effect for the life on the mortgage.

Closing
The meeting between all parties to the loan or their agents, where the property and mortgage funds change hands.

Census Tract

A geographic region whose boundaries are defined by the census bureau based on the number of people who live within the area. Used when determining neighborhood characteristics on appraisals.

Caps (payment)
Consumer safeguards limiting the amount monthly payments on an adjustable rate mortgage may change during the life on the mortgage.

Adjustable Rate Mortgage (ARM)
A mortgage that is tied to an index that will adjust based on changes in the economy. ARMs commonly come in 2, 3, 5, and 7 year terms. The number of years your ARM is, is the number of years it will be fixed for. These loans are still amortized for the full 30 years.

Equity
The difference between what is owed on the property, and what the property could be sold for.

Blanket Mortgage
A mortgage which covers two pieces of real estate under one note.

Accrued Interest:
Interest accumulated on a loan since the last interest payment was made. The interest portion of a mortgage payment is used for the accrued interest in the prior month. For example your February 1st payment will pay for interest accrued in January.

Margin
The number of percentage points a lender adds to the index rate to calculate the ARM interest rate at each adjustment.

Balloon Mortgage:
Any mortgage that has amortized payments due for a specified term but has a lump sum payment due at an earlier stated term. For example a mortgage with payments based on a 30 year term but the loan is due in 20 years. This would mean that the remaining balance on the loan would be due in the 20th year

Discount Points

A discount point is a percentage of the total loan amount that is paid for a lower interest rate. Example 1 point would be 1% of the loan amount or $1000 dollars on a $100,000 loan.

Conforming Loan
a mortgage underwritten within the risk assessment guidelines promulgated by Fannie Mae and Freddie Mac, thereby eligible to be sold to the two secondary market powerhouses.

Deed of Trust
A recorded security instrument that is used instead of a mortgage in the states of Alaska, Arizona, California, Colorado, Georgia, Idaho, Illinois, Mississippi, Missouri, Montana, North Carolina, Texas, Virginia and West Virginia. A DOT differs from a mortgage in that there is a third party, known as the trustee who holds the title to the property in trust for the lender, otherwise known as the beneficiary. By having the property in trust, the process of foreclosure is somewhat more expedient should the borrower, or trustor, default on the loan.

Available Mortgage Loan Products

Purchase Transactions including first and second trust mortgages
Refinance Transactions for Rate and Term as well as Cash-Out Refinances
Stand-Alone Second Mortgages (Home Equity Loans -HELOAN and Home Equity Lines of Credit -HELOC)
Construction Loans
Government Loans such as VA and FHA

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FDIC Equal Housing Lender.  Jacob Dean Mortgage 1604 Spring Hill Rd, Second Floor, Vienna, VA 22182. Licensed by the NH Banking Department; Licensed Mortgage Banker, NJ Department of Banking & Insurance; Licensed Mortgage Broker, NYS Banking Department; Licensed by the PA Department of Banking.