 James Balletta, Owner/Broker
(516) 921-5025
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C.R.B., G.R.I., C.R.S., President, Licensed Real Estate Broker
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REAL ESTATE GLOSSARY
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Mortgage
A legal document
that pledges a property to the lender as security for
payment of a debt.
Simply put, the mortgage is the legal document that
gives the lender a legal claim against your house should
you default on your loan payments. The mortgage
indicates that a specific amount of money will be loaned
at a specific interest rate so that you can buy your
home. Another way of thinking of the mortgage is that
you have possession of the property but the lender has
ownership until you have repaid your loan.
The items stated in the mortgage include the homeowner's
responsibility to:
-- pay principal
-- pay interest
-- pay taxes,
-- pay insurance on time,
-- pay to maintain hazard insurance on the property, and
-- adequately maintain the property.
The mortgage also includes the basic information found
in the note.
Should you consistently fail to meet these requirements,
your lender can seek full repayment of the balance of
the loan, foreclose on the property,
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Mortgage
Banker
A company that
originates mortgages exclusively for resale in the
secondary mortgage market.
Mortgage companies originate and service mortgages. In
other words, they make loans to consumers. Mortgage
companies then typically sell these loans to other
lenders and investors.
Some mortgage companies may be subsidiaries of
depository institutions or their holding companies but
do not receive money from individual depositors.
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Mortgage
Banking Companies
Mortgage
companies originate and service mortgages. In other
words, they make loans to consumers. Mortgage companies
then typically sell these loans to other lenders and
investors.
Some mortgage companies may be subsidiaries of
depository institutions or their holding companies but
do not receive money from individual depositors.
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Mortgage
Broker
An individual or
company that brings borrowers and lenders together for
the purpose of loan origination. Mortgage brokers
typically require a fee or a commission for their
services.
The National Association of Mortgage Brokers defines a
mortgage broker as "an independent real estate financing
professional who specializes in the origination of
residential and/or commercial mortgages."
There are an estimated 20,000 mortgage brokerage
operations from coast to coast. They originate more than
half of the residential loans in the U.S.
A mortgage broker has professional expertise that can
assist mortgage seekers in finding the best loan for
them. The mortgage broker is also experienced in
offering many applicable financing options for a
consumer's specific needs.
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Mortgage
Insurance
A contract that
insures the lender against loss caused by a mortgagor's
default on a government mortgage or conventional
mortgage. Mortgage insurance can be issued by a private
company or by a government agency such as the Federal
Housing Administration (FHA). Depending on the type of
mortgage insurance, the insurance may cover a percentage
of or virtually all of the mortgage loan.
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Mortgage
Insurance Premium (MIP)
The amount paid
by a mortgagor for mortgage insurance, either to a
government agency such as the Federal Housing
Administration (FHA) or to a private mortgage insurance
(MI) company.
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Mortgage-Related Closing
Costs
Mortgage-related closing
costs generally are costs associated with your loan application.
They vary, but here are some of the most common ones:
-- Loan origination fee: This fee covers the administrative costs
of processing the loan. It may be expressed as a percentage of the
loan (for example, 1 percent of the mortgage amount).
-- Loan discount points: These points are additional funds you pay
the lender at closing to get a lower interest rate on your
mortgage. Typically, each point you pay for a 30-year loan lowers
your interest rate by .125 of a percentage point. If the current
interest rate on a no-point, 30-year mortgage is 7.75 percent,
paying one point would lower the interest rate to 7.625. Each
point is one percent of the mortgage (for example, if your
mortgage is $200,000, one point equals $2,000).
-- Appraisal fee: This fee pays for the appraisal, which the
lender uses to determine whether the value of the property secures
the loan should you default. The home buyer usually pays this fee.
It may appear on the settlement form as "POC," or "paid outside
closing."
-- Credit report fee: This covers the cost of the credit report,
which the lender uses to determine your creditworthiness.
-- Assumption fee: This fee is charged if you take over the
payments on the seller's existing loan. It may range from hundreds
of dollars to one percent of the loan amount.
-- Prepaid interest: You are charged interest when you borrow
money from a lender, and you will pay interest on the mortgage
amount from the date of settlement to the beginning of the period
covered by the first monthly mortgage payment. At closing, you may
be required to pay in advance the interest for the period.
-- Escrow accounts: Also called reserves, these accounts are
required if your lender will be paying your homeowner's insurance
and property taxes. Your lender sets up the escrow account by
adding the cost of the insurance and taxes to your monthly
mortgage payments. It is kept in reserve until the bills are due.
The bills are sent directly to your lender, who makes the payments
for you.
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Mortgagee
The lender
in a mortgage agreement.
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Mortgagor
The
borrower in a mortgage agreement.
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Multi-dwelling Units
Properties
that provide separate housing units for more than
one family, although they secure only a single
mortgage.
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Multifamily Properties
We provide
financing for multifamily (buildings with five or
more units) rental properties through a nationwide
network of mortgage lenders.
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Multifamily Mortgage
A
residential mortgage on a dwelling that is
designed to house more than four families, such as
a high-rise apartment complex.
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Lex Realty - Long Island's Oldest Real Estate Office
Serving Syosset, Woodbury, Jericho, Bethpage, Plainview, Muttontown, Laurel Hollow, the Brookvilles, Oyster Bay, Oyster Bay Cove and all of the New York Area Real Estate Communities
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