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Flashcards in Mortgages Defined Deck (9)
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Mortgage Loan

Loan used by borrowers to either purchase a residual property using a purchase money mortgage or to refinance or replace that mortgage


Rate and Term Refinance

Allows them to lower the interest rate or change the duration of the loan (or both) IOT lower monthly payments


Cash out Refinance

Allows borrower to increase his loan amount by accessing or tapping into the equity in his property to use that cash for a number of reasons



Loan pays itself off including the amount borrowed and the interest charge by the end of the loan term



Principal, interest, taxes, and insurance: most mortgages today also require that a borrower remit a portion of their annual property taxes and homeowners insurance (T&I)


Loan to Value (LTV)

If a home is valued at $100,000 and the mortgage loan is for $75,000 the LTV is %75. The remaining $25,000 is the borrowers equity and not subject to a mortgage lien.


Three (3) documents involved in taking out a mortgage loan

1. Deed: borrowers title (ownership) of property
2. The Promissory Note: promise to pay over a specified time at specified rate of interest.
3. Mortgage/Deed of Trust: creates a security interest and evidences a lien or encumbrance on the property.



legal claim of a lender against the property of a borrower to guarantee the repayment of debt


Deficiency Judgement

If funds recouped from a sale of a foreclosed home are insufficient to cover the debt, the borrower is still responsible for repayment.