Terms you may need

A mortgage loan is a loan to finance the purchaseof real estate, usually with specified payment periods and interest rates. The borrower (mortgagor) gives the lender (mortgagee) a lien on the property as collateral for the loan. The mortgagor's lien on the property expires when the mortgage is paid off in full.

To amortize - 1. To liquidate (a debt, such as a mortgage) by installment payments or payment into a sinking fund.2. To write off an expenditure for (office equipment, for example) by prorating (пропорційне росподілення) over a certain period.

To pay off - to pay the full amount on (a debt).

A credit union - is a cooperative financial institution that is owned and managed by its members, and is closely regulated just like any other financial institution. Usually, credit unions provide services to groups that share common interests or something in common. (such as a workplace), an area where they live, or a church they visit.

Mortgage Servicing Rights (MSR) is a contractual agreement where the right, or rights, to service an existing mortgage are sold by the original lender to another party who specializes in the various functions of servicing mortgages. Common rights included are the right to collect mortgage payments monthly, set aside taxes and insurance premiums in escrow, and forward interest and principal to the mortgage lender.

A down payment is a type of payment made in cash during the onset of the purchase of an expensive good/service. The payment typically represents only a percentage of the full purchase price; in some cases it is not refundable if the deal falls through.

An underlying mortgage is the first mortgage taken out by a housing cooperative. The mortgage is secured by the land and the building owned by the cooperative. Also called blanket loans or blanket debt.

Clear title is1. a title that is free of liens and legalquestions as to ownershipof the property. A requirement for the sale of real estate also called just title or good title or free and clear. 2. The right to the ownership and possession of any item that may be legally recognized as belonging to someone or something. In its most basic sense, title is the recognition of ownership.

A deed is a legal document conveying title to a property. A legal document that grants the bearer a right or privilege, provided that he or she meets a number of conditions.

Title Search is an examination of public records to determine and confirm property's legal ownership, and find out what claims are on the property. A title search is usually performed by a title company or an attorney, who researches the vested owner, the liens or other judgments on the property, the loans on the property and the property taxes due.

Title Insurance is an insurance that covers the loss of an interest in a property due to legal defects and that is required if the property is under mortgage. Most title insurance is lender's title insurance, which is paid for by the borrower but protects only the lender. Owner's title insurance is a separate policy; in some areas it is paid for by the seller to protect the buyer's equity in the property.

Private mortgage insurance (PMI) is a mortgage insurance provided by non government insurers that protects a lender against loss if the borrower defaults. Mortgage originator is an institution or individual that works with a borrower to complete a mortgage transaction. A mortgage originator can be either a mortgage broker or a mortgage banker, and is the original mortgage lender. Mortgage originators are part of the primary mortgage market.

Mortgage aggregator is part of the second mortgage market. They buy mortgages from financial institutions and then secure them with mortgage-backed securities.

An insurance company is a company that offers insurance policies to the public, either by selling directly to an individual or through another source such as an employee's benefit plan. An insurance company is usually comprised of multiple insurance agents. An insurance company can specialize in one type of insurance, such as life insurance, health insurance, or auto insurance, or offer multiple types of insurance.

Hedge funds - portfolio of investments that uses advanced investment strategies such as leveraged, long, short and derivative positions in both domestic and international markets with the goal of generating high returns.

Collateral is property or other assets that a borrower offers a lender to secure a loan. If the borrower stops making the promised loan payments, the lender can seize the collateral to recoup its losses. Collateral offers some security to the lender in case the borrower fails to pay back the loan.

A lien is the legal right of a creditor to sell the collateral property of a debtor who fails to meet the obligations of a loan contract. A lien exists, for example, when an individual takes out an automobile loan. Another type of lien is a mechanic's lien, which can be attached to real property if the property owner fails to pay a contractor for services rendered. If the debtor never pays, the property can be auctioned off to pay the lien holder.

A borrower qualification is a preliminary assessment by a lender of the amount it will lend to a potential homebuyer. The process of determining how much money a prospective home buyer may be eligible to borrow before he or she applies for a loan.

Discount points is a type of prepaid interest mortgage borrowers can purchase that lowers the amount of interest they will have to pay on subsequent payments. Each discount point generally costs 1% of the total loan amount and depending on the borrower, each point lowers your interest rate by one-eighth to one one-quarter of your interest rate. Discount points are tax deductible only for the year in which they were paid.

For example, on a $200,000 loan, each point would cost $2,000. Assuming the interest rate on the mortgage is 5% and each point lowers the interest rate by 0.25%. Buying 2 points will cost $4,000 and will result in an interest rate of 4.50%.  Both lenders and borrowers gain benefits from discount points. Borrowers gain the benefit of lowered interest payments down the road, but the benefit applies only if the borrower plans on holding onto the mortgage long enough to save money from the decreased interest payments. Lenders benefit by receiving cash upfront instead of waiting for money in the form of interest payments over time, which enhances the lenders liquidity situation.