Phone: 407-539-3476 x234
Email: jt@jimtaggart.com

The Mortgage Firm
921 Douglas Ave, Suite 200
Altamonte Springs, FL 32714

Adjustable-Rate Mortgage - A home loan with an interest rate tied to a financial index which can increase or decrease at pre-determined adjustment periods - typically semi-annually or annually.

Adjustment Period - The interval at which the loan rate and/or monthly payment can change on an adjustable-rate mortgage, usually one or more times per year.

Amortization - The gradual repayment of debt through periodic payments of principal and interest over a prescribed period until there is a zero balance.

Annual Percentage Rate - The true annual interest rate. The total cost or finance charge for a loan per year, expressed as a percentage.

Appraisal - An opinion or estimate of value, or the process whereby that opinion is reached.

Appraised Value - An opinion of value reached by an appraiser based upon study of pertinent data.

Assessed Value - Value placed upon property for tax purposes by the tax assessor.

Balloon Mortgage - A mortgage with monthly payments of principal and interest that do not fully amortize the loan. The balance of the mortgage is due in a lump sum at a specified date.

Balloon Payment - the unpaid principal amount of a mortgage due on a specified date in a lump sum.

Buydown - An interest rate subsidy in the form of additional discount points usually paid by the builder, lender, seller or buyer.

Cap - A limit on how much the interest rate or monthly payment can change, either during the adjustment period or over the life of the loan.

Closing - The delivery of a deed, signing of notes, and disbursement of funds necessary to consummate a real estate sale or loan transaction.

Closing Costs - Expenses incurred by the buyer and seller during the purchase and sale of real estate such as title fees, loan fees, etc.

Co-Borrower - A second borrower who signs a mortgage loan with the borrower. The co-borrower-s income, assets, and debt are combined with that of the borrowers for the sake of qualifying and underwriting purposes. The co-borrower-s name must also appear on the mortgage or deed of trust.

Comparables - Properties sold recently that are similar to property being considered for purchase. Comparables should be in the same general location and of similar size, character and construction type.

Conventional Mortgage - A mortgage made by a lender without the backing provided by government guarantees such as VA or FHA.

Conveyance - The document, such as a deed or mortgage, used to effect a transfer.

Deed of Trust - A security instrument conveying title in trust to a neutral third party. In some states this is used in place of a mortgage.

Equity - The difference between the actual value of a property and the outstanding loan balance.

Escrow - The temporary holding by a neutral third party of deposited funds pending completion of agreed terms in a transaction.

FHA Mortgage - A low down payment loan insured by the Federal Housing Administration. The FHA protects the lender against loss in case the borrower defaults.

Fixed-Rate Mortgage - A loan with an interest rate that remains unchanged over the term of the loan.

Gift Letter - A letter from the donor of gift funds certifying to the underwriter that funds in a borrower-s account are a gift and do not need to be repaid.

Hazard Insurance - Insurance coverage providing compensation to the insured in case of a loss or damage to a property.

Impound Account - Account held by a lender for payment of taxes, insurance, mortgage insurance, and other debts against property. The borrower pays an apportioned amount with each monthly payment.

Index - A base for determining the interest rate adjustment of an ARM, such as the interest rate on U.S. Treasury securities. Indexes generally reflect prevailing market conditions.

Investor - A person or institution that invests in mortgages or mortgage-backed securities.

Lien - A claim against property for debt, such as a mortgage.

Loan-to-Value Ratio (LTV) - The ratio of mortgage amount to the lower appraised value or sales price. Used by lenders to determine maximum loan amounts.

Margin - The amount, expressed as a percentage, that a lender adds to an index to arrive at the effective interest rate on an ARM.

Market Value - The current value of a property that a buyer is willing to pay and the seller is willing to accept.

Mortgage Insurance - Insurance obtained from a non-governmental insurer that provides the lender with protection in case the borrower defaults.

Non-Conforming Loan - A conventional loan is considered non-conforming when the loan amount is too large or underwriting practices are outside the guidelines established by the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC). A jumbo loan or a loan for borrowers with less-than-perfect credit are examples of non-conforming loans.

Note - A general term for an instrument signed by the borrower that is an acknowledgment of the debt and a promise to pay.

PITI - An acronym for the items included in a monthly payment: Principal, Interest, Taxes, and Insurance.

Point - An amount equal to one percent of the loan amount. The origination fee is often expressed in points.

Purchase and Sale Contract - The formal agreement in which the seller agrees to sell and the buyer agrees to buy the property.

Refinancing - A new borrowing against a property that is currently mortgaged, with the intention of retiring the previous debt.

Second Mortgage - A second lien on a property.

Term - The period or duration of a note or loan.

Title Insurance - Insurance written by a title company to protect the lender or owner against loss in the case of undisclosed liens or defects in title to the property.

Underwriting - In mortgage banking, the analysis of risk involved in making a mortgage loan to determine whether the risk is acceptable to the lender.

VA Mortgage - A low down payment loan guaranteed by the Department of Veterans Affairs.