| Hazard
Insurance |
| Also called Homeowners Insurance,
it is designed to cover damage due to fire, wind, vandalism, theft, etc. |
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| Heavy
Industrial |
| Manufacturing properties comprise
the heavy industrial segment. Frequent uses of such properties are: auto
making, textiles, steel, chemicals, and food processing. Typically zero
to five percent office space. |
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| High-Rise
Apartments |
| A descriptive term for an
apartment building in excess of ten stories, with underground parking,
security, and a standard floor plan. |
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| Home
Warranty Insurance |
| Private insurance insuring
a buyer against defects (usually in plumbing, heating and electrical)
in the home purchased. Although the period of insurance varies and both
new and used homes may be insured. |
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| Impound
Account |
| See Escrow |
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| Income
Ratio |
| Used to determine qualification
for mortgage loans, this ratio accesses the allowable housing costs in
relationship to a borrower's monthly income. |
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| Index |
| Any rate published by an independent
third party (the government, the federal bank, etc.) which serves as the
measuring device used to determine if interest rates have gone up or down
over time. A wide variety of indexes may be used with Adjustable Rate
Mortgages. |
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| Initial
Note Rate |
| The mortgage note rate at
the inception of the mortgage. This rate will change periodically according
to the index and the period of time for which it is guaranteed. |
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| Insurance
of Title |
| Insurance as to who owns a
specified interest in designated real estate, and showing as exceptions
to the insured interest the defects, liens and encumbrances which exist
as against that insured interest. |
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| Interest
Cap |
| It is a type of consumer protection
that limits the amount of interest that a loan may be increased or decreased.
Yearly interest caps and life of loan caps are available with many loans
today. |
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| Interest
Rate Buydown |
| A technique of reducing the
effective interest charged to a borrower. It involves the payment of money
to a lender to reduce the borrower's interest rate either temporarily
or permanently. This would help reduce the buyer's payments and help him
qualify for the loan. |
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| Interim
Financing |
| A temporary construction loan
made during the completion of a home or building, which is usually replaced
by a permanent loan after completion and/or sale of the property. It also
may be referred to as a short-term loan or a bridge loan. |
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| Investment
Return |
| The amount by which your investment
gains or loses (capital appreciation/depreciation and dividend or coupon
income) over a given period of time. Usually expressed as a percentage
of the original amount invested. A five-percent return means you earned
five dollars for every $100 you invested in the stated time period. Investment
return can be measured over a variety of timeframes (i.e., one-year, five-years,
10-years, etc.) |
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| Lien |
| A legal claim or security
instrument against property for moneys owed. |
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| Life
of Loan Cap |
| Limits the amount that a loan
rate can change throughout the entire life or term of the loan. A typical
life of the loan in use today would be a 5% interest rate cap. |
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| Light
Industrial/Assembly |
| Production lines that assemble
components produced elsewhere and light manufacturing are based in light
industrial/assembly facilities. Office space is usually less than ten
percent. |
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| Loan
Origination Fee |
| A one-time set-up fee charged
by the lender to cover the direct costs of arranging the loan. |
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| Lock-In
Rate |
| Some lenders will obtain a
commitment from a lender to guarantee a certain interest rate or other
loan feature for a set period of time, usually from thirty days to one
year for a prepaid fee. This can protect a borrower from interest rates
rising while the application and closing takes place. |
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| Market
Value |
| A price estimate obtained
for a particular asset if it were sold in an arm's length transaction
on the current market. For Real Estate: The likely price a buyer is willing
to pay for a property and the likely price a seller will accept for the
property in question. |
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| Mechanics
Lien |
| A lien or claim placed on
a property as security for payment for work performed in the construction
of the property and is not compensated for that work. |
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| Mid-Rise
Apartments |
| Six to ten story buildings
that are serviced by elevators, usually have an inner city or dense suburb,
and have a limited range of unit types. |
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| Mortgage
|
| A legal document secured against
property to the lender for payment of a debt. It is a two party agreement
as opposed to the three party agreement of a deed of trust. |
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| Mortgage
Yours |
| Individual lenders who originate
mortgages exclusively for resale in the secondary mortgage market. These
are often sold to investors such as insurance companies and Fannie Mae. |
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| Mortgage
Insurance Premium (MIP) |
| An insurance premium paid
by the borrower on a policy that promises to pay out the amount owing
in the event that the borrower defaults. |
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| Mortgage
Note |
| A written agreement, secured
by a mortgage, serves as proof of indebtedness, and states the manner
in which a loan is repaid. |
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| Mortgagee
(Lender) |
| The lender of money to purchase
real estate in a mortgage transaction. One who holds a mortgage on real
estate. |
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| Mortgagor |
| The borrower of money to purchase
real estate in a mortgage transaction |
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| Mortgage
Information Letter (MIL) |
| A letter issued by the lender
indicating the payoff balance of a loan as well as any other requirements
of loan payoff. |
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| Multiple
Listing Service (MLS) |
| The service created and run
by professionals which combines the all available listings in an area,
except For Sale By Owner (FSBO) properties, in one directory or database. |
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| Negative
Amortization |
| When the periodic payments
on a loan are not sufficient to pay the interest which has accumulated.
This results in an increase rather than a decrease in the amount owing
on the mortgage. Also referred to as a deferred interest. |
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| Note |
| A legal document that obligates
a borrower to repay a debt, such as a mortgage note. |
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| Note
Rate |
| The interest rate as set out
in the mortgage that must be paid back on the mortgage note in addition
to the principal amount owed. |
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| Office/Warehouse
or Research & Development |
| Properties that have lab facilities,
offices, warehouse facilities, or personal services such as carpentry
or machine repair are typically research and development or office/warehouse
properties. Each property usually allows a variable combination of office
and other uses. |
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| Origination
Fee |
| A fee paid to the lender for
processing a loan application. The origination fee is stated in the form
of points and usually amounts to 1% of the loan applied for. |
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