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11 Cards in this Set
- Front
- Back
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PITI |
Principal, interest, real estate taxes, and hazard insurance. The basic cost of owning a home. |
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Debt to income ratio (DTI) |
Information about an applicant's gross income and total debt that lenders generally look at as a percentage to determine qualification for a loan. |
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Equity |
The difference between the market value of the property and the amount still owed on it |
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Promissory note |
A borrower's personal promise to repay a date according to the agreed terms |
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Loan-to-value ratio (LTV) |
The relationship between the amount of the mortgage loan and the value of the real estate being pledged as collateral |
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Usury |
Charging interest at a higher rate than the maximum rate established by state law. |
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Loan origination fee |
A fee charged to the borrower by the lender for making a mortgage loan. The fee is usually computed as a percentage of the loan amount. |
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Discount points |
A unit of measurement used for various loan charges; one point equals 1% of the amount of the loan |
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Prepayment penalty |
A charge imposed on a borrower who pays off the loan principal early. This penalty compensates the lender for charges that would otherwise be lost |
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Hypothecation |
To pledge property as security for an obligation or loan without giving up possession of it |
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Lien theory |
Some states interpret a mortgage as being purely a lien on Real Property. The mortgagee thus has no right of possession but most foreclose the lien and sell the property if the mortgagor defaults |
