Refinancing for an amount in excess of the balance on the old loan plus settlement costs. The borrower takes “cash-out” of the transaction. This way of raising cash is usually an alternative to taking out a home equity loan.
On a home purchase, the process of transferring ownership from the seller to the buyer, the disbursement of funds from the buyer and the lender to the seller, and the execution of all the documents associated with the sale and the loan. On a refinance, there is no transfer of ownership, but the closing includes repayment of the old lender.
Costs that the borrower must pay at the time of closing, in addition to the down payment. These costs ordinarily include origination fees, appraisal fees, underwriting fees, title fees, etc.
One or more persons who have signed the note, and are equally responsible for repaying the loan.
A loan eligible for purchase by the two major Federal agencies that buy mortgages, Fannie Mae and Freddie Mac. The loan must follow their specialized underwriting guidelines for eligibility.
A lender (mortgage company) with capabilities allowing them to approve and fund their own loans. This gives them a competitive advantage over mortgage brokers, who are required to have their loans approved and funded by third party financial institutions.
A report from a credit bureau containing detailed information bearing on credit-worthiness, including the individual’s credit history.
A numerical score, based on an individual’s credit history, that measures an individual’s credit worthiness. A credit score can range anywhere between 350-800. Any score over 720 is considered excellent credit. Main factors that determine an individual’s score are account balances, account history, payment history, number of revolving accounts, etc. The most widely used credit score is called FICO for Fair Issac Co. which developed it.
The sum of all interest payments to date or over the life of the loan.