Information Center

Mortgage Industry Terminology

Information Talking
Escrow account:

This is an account held separately by the mortgage company from which required property bills are paid. A certain portion of your total monthly payment is deposited into this account for disbursement to bills for things like property taxes and homeowner’s insurance.

Discount points:

A point is a measure of interest; 1 point = 1% of the value of the home loan. You may be able to pay points up front to be able to lower your overall interest rate and consequent mortgage payment.

Annual percentage rate (APR):

All mortgage lenders must disclose their current APR which may include fees such as documentation fees, private mortgage insurance and more. This is mandated by the Truth in Lending Act. The APR provides the most accurate cost of a home loan.

Assumable mortgage:

This type of mortgage may be transferred, interest rate and all, from seller to buyer.

Closing:

The actual legal documented sale of a home that includes the signing of all paperwork associated with the exchange and payment of required closing fees. A closing agent usually conducts this final transaction in the home purchase/selling process. Bring your patience, your checkbook, and read everything before you sign.

Closing costs:

These are real estate transaction fees paid by both the buyer and seller during the closing transaction. Fees included are usually items such as title search, origination fees, attorney's fees, origination fees, documentation (doc stamp) fees and more.

Conventional mortgage:

A mortgage offered by any one of the Government sponsored entities, different from an FHA loan. They are usually conforming loans.

Lender fees:

Lender fees are typically included in fees associated with closing costs, and are sometimes called processing fees. Lender fees are designed to cover costs incurred by the mortgage company during the loan application process.

Warranty deed:

A warranty deed indicates that no past liens or disputes have been filed against the property and that the current holder of the property deed has the right to sell it to someone else.

Rate lock:

This is a short-term agreement from a bank, or other type of mortgage lender to "hold" a certain interest rate on a home loan while the buyer negotiates the sale. If interests seem to be trending upwards, a rate lock can help to you save money over the life of the loan terms.


Mortgage Industry Terminology

mortgage information

 
 

Escrow account:

This is an account held separately by the mortgage company from which required property bills are paid. A certain portion of your total monthly payment is deposited into this account for disbursement to bills for things like property taxes and homeowner’s insurance.
 

Discount points:

A point is a measure of interest; 1 point = 1% of the value of the home loan. You may be able to pay points up front to be able to lower your overall interest rate and consequent mortgage payment.
 

Annual percentage rate (APR):

All mortgage lenders must disclose their current APR which may include fees such as documentation fees, private mortgage insurance and more. This is mandated by the Truth in Lending Act. The APR provides the most accurate cost of a home loan.
 

Assumable mortgage:

This type of mortgage may be transferred, interest rate and all, from seller to buyer.
 

Closing:

The actual legal documented sale of a home that includes the signing of all paperwork associated with the exchange and payment of required closing fees. A closing agent usually conducts this final transaction in the home purchase/selling process. Bring your patience, your checkbook, and read everything before you sign.
 

Closing costs:

These are real estate transaction fees paid by both the buyer and seller during the closing transaction. Fees included are usually items such as title search, origination fees, attorney's fees, origination fees, documentation (doc stamp) fees and more.
 

Conventional mortgage:

A mortgage offered by any one of the Government sponsored entities, different from an FHA loan. They are usually conforming loans.
 

Lender fees:

Lender fees are typically included in fees associated with closing costs, and are sometimes called processing fees. Lender fees are designed to cover costs incurred by the mortgage company during the loan application process.

 

Warranty deed:

A warranty deed indicates that no past liens or disputes have been filed against the property and that the current holder of the property deed has the right to sell it to someone else.

 
Rate lock:

This is a short-term agreement from a bank, or other type of mortgage lender to “hold” a certain interest rate on a home loan while the buyer negotiates the sale. If interests seem to be trending upwards, a rate lock can help to you save money over the life of the loan terms.