Home Buyers Guide from Tammy Mitchell Hines & Co. Workbook for Home Buyers | Page 41

Glossary of Terms Lease Purchase Agreement: Lien: Loan-to-Value Ratio: Buyer makes a deposit for the future purchase of a property with the right to lease the property in the interim. A legal claim against a property that must be paid when the property is sold. The relationship between the amount of a home mortgage and the total value of the property. Lenders may limit their maximum mortgage to 80-95 percent of value. Lock-in Ratio: A commitment made by lenders on a mortgage loan to "lock-in" a civilian rate pending mortgage approval. Lock-in periods vary. Market Value: The highest price a buyer will pay for property and the lowest price the seller will accept. Mortgage: One type of document used to make property the security for the payment of a loan. Mortgage Broker: An individual or company that obtains mortgages for others by finding lending institutions, insurance companies, or private sources to lend the money; may also handle collections and disbursements. Mortgagee: The lender of money or the receiver of the mortgage. Mortgagor: The borrower of money or the giver of the mortgage document. Negative Amortization: An increase in the outstanding balance of a mortgage resulting from the failure of periodic debt service payment to cover required interest charges on the loan. Note: A written promise to pay a certain amount of money. Origination Fee: A fee or charge for work involved in the evaluation, preparation, and submission of a proposed mortgage loan. Prepayment Penalty: A fee paid to the mortgagee for paying the mortgage before it becomes due. Also know as prepayment fee or reinvestment fee. Private Mortgage Insurance (PMI): Insurance issued to a lender by a private company to protect the lender against loss on a defaulted mortgage loan. Its use is usually limited to loans with high loan-to-value ratios. The borrower pays the premiums. Promissory Note: A written contract containing a promise to pay a definite amount of money at a definite future time. Radon: A colorless, odorless gas formed by the breakdown of uranium in sub-soils. It can enter a house through cracks in the foundation or in water and is considered to be a health hazard. REALTOR and REALTORAssociate: Registered collective membership marks that identify real estate professionals who are members of the National Association of REALTORS and who subscribe to its strict Code of Ethics. Glossary Continued on next page www.CallTammy.com * 618-281-3959 * [email protected]