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Should You Refinance

17 October, 2017



Should you refinance?

There are several reasons that might make someone consider refinancing their existing mortgage. One would be to get a lower interest rate than what they currently have, thereby reducing monthly payments and lowering the overall cost of the mortgage. Another is to shorten the length of the loan, which can save quite a bit in interest payments. Thirdly, someone may have other debts that they wish to pay off, and refinancing may provide them a means of consolidating that debt into one overall lower payment.
A lower interest rate isn’t the only thing that should be taken into account when thinking about refinancing. There are costs and fees associated with refinancing your mortgage. The bank will charge fees, there will be costs for a new inspection and a new appraisal, title search, and so on. The process that is gone through is very much like the process that one goes through on getting a first mortgage. It requires a new application with a new credit check, survey, and appraisal. As it is with a first mortgage, this can be a long and costly process.
In general, it makes sense to refinance if the interest rate on the new loan is at least two percentage points lower than that of the current loan, although this is not always the case. Some things that need to be taken into consideration are the total cost of the refinancing, the total monthly savings, and how long you plan to stay in your house after you refinance. You can calculate how long it will take you to break even on refinancing costs by dividing the total cost of the refinance by the monthly amount you will be saving. For example, if the cost is $2,500, and you reduce your monthly payments by $100, then it will take 25 months to start seeing the savings from the reduced mortgage rate. If you plan on staying in your house longer than this, then it may just make sense for you.
Another reason that someone might consider refinancing is if they are trying to consolidate debt. In such cases, there is also the tax impact that one should look at. Many loan types are not tax deductible, whereas mortgage loans are. Therefore for that reason alone it may be a good idea to consolidate outstanding credit card debt, student loans, car loans, as well as others.
Some people may not have a choice about refinancing, it is a must for them. This happens in cases where they have a loan with a balloon payment coming up and no conversion option. In instances like this the best bet is to refinance the mortgage a few months before the balloon payment is due.
If you do decide that the costs associated with doing a refinance outweigh the benefits, you should ask your bank or financial institution if you can get some of the terms that you want by agreeing to a modification of your current loan. However you choose to go, remember that it always makes sense to consult with a mortgage professional before making your move. This can end up saving you both time and money. You should also do research before making a decision. Spend some time on the web familiarizing yourself with what you are getting yourself into. Take the time to read up on and understand what your options are.
More on Mortgage Refinancing.

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Adsense Click Through Rate Ctr Advice

16 October, 2017

Milos Pesic asked:

Making real money using Google’s AdSense program can be done. The key to making it happen is to increase the AdSense click through rate (ctr) on a site. This means turning your traffic into visitors on advertisers’ web sites.

In theory, creating an increase an AdSense click through rate (ctr) is a fairly easy thing to do. Making that theory work in practice, however, requires a little time and energy. But, if the AdSense click through rate (ctr) is increased on a site, the money making possibilities can be quite surprising. In fact, many people who have mastered the art of working their AdSense click through rate (ctr) to their favor have left their day jobs far behind.

So, learning how to increase the AdSense click through rate (ctr) will be key. Let’s look at some of the ways to achieve this.

·Search Engine Optimization. This method of making a web site heavy in highly searched keywords can work well to generate traffic. To make this pay off with an increase in AdSense click through rate (ctr), this particular method plays a numbers game. The theory is the more traffic, the more likely a percentage of it will be willing to click through. This is a fairly sound theory for increasing AdSense click through rate (ctr), but it takes some time to master. Contents need to be relevant and engaging to keep people on the site long enough to entice them to actually click through to the ads. Content should also be rich in keywords while still offering good information to increase the AdSense click through rate (ctr).

·Make ads blend in. One of the ways to help increase AdSense click through rate (ctr) numbers is to make sure the ads look at home on a site. This means blending fonts, colors and borders for the best overall look.

·Reduce outgoing links. This is a fairly good way to increase AdSense click through rate (ctr) conversions. By limiting where viewers can go next, this theory can work to increase AdSense click through rate (ctr) figures by increasing the changes for people to actually click through.

·Try different ad sizes. This is another way to help increase the AdSense click through rate (ctr). Experiment to see which kinds of ads get the best rates and stick with those.

Learning to increase the AdSense click through rate (ctr) can take a little time, but it’s an effort that can really pay off for web site publishers and owners. The idea is to make a site relevant and enticing enough that visitors will want to click through on the ads to learn more about potential products and services related to the content.

Blog and Earn – Take it to the bank!



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Many College Graduates Can Now Stay On Parents Health Insurance Plan

15 October, 2017



Normally student health insurance will be less costly than if you went with a industrial insurance provider because a university student generally does not file as many claims as somebody who is part of the common population. It is short period type of insurance coverage which is the primary cause why premiums are reduced. Nowadays, there are large numbers of health insurance for pregnant women in Ohio and some other parts of the nation.

College Going Young Adults can get Health Insurance in 3 ways:

As a college or university student, usually you’ve 3 options to obtain health insurance policy.

Family Protection Benefits

Among the inexpensive and most complete student health coverage comes when the college students remain on their parent’s health insurance plan while enrolled full time in school or attend high school. Generally, the parent pays the price of some or all the premiums, which may cost a number of hundreds of dollars per month per pupil. But by including children coverage, the price of the deductible might be higher. These policies generally have low premiums. But they don’t provide drug and doctor’s visit benefits.

College/University Offered Health Insurance Policy

Most colleges and universities have their own healthcare centers and facilities. These services are compulsory for college students. However, if there is a pre-existing condition, which can need constant hospital care; this may not usually be covered. In such instances, having private health insurance coverage is much more beneficial. But if you’ve to undergo professional treatment which are non-urgent, you may need to wait around for six months or lengthier.

Having Individual Health Insurance Coverage

Individual insurance policies may be little expensive, but carriers will evaluate an applicant’s health danger factors before making a decision to issue protection. It means that if you have a severe medical condition, or are predisposed towards a certain condition, a carrier might decline to issue protection. But you should make sure that the company is licensed before purchasing such insurance as some of them might be fake. Verifying license will protect you from frauds. Although the premium is much more than other two types of health plans, you will enjoy much more advantages. If you purchase from unlicensed entity, you might have to pay the prices of any claims your self.

Health insurance is extremely important and selecting the top rated insurance company is as essential. Find out more tricks to select right health insurance for young adults in Georgia at our web site.



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Heard of P2p Payments

14 October, 2017



By

Rosemary White

, July 2, 2010 6:09 am

I really can’t keep up with all the changes going on out there in the world of finances (I know…it’s my job…).  In the last several months, there have been “peer-to-peer payment services” popping up all around the country.  And, if you can believe this, banks are in the forefront of this.  Basically, a business owner, rather than write a check for a good or service, is now able to transfer money to a customer’s account.  All you need is a mobile phone number and an email address.  The transaction occurs directly from one bank to another.  Why didn’t I think of this?

Five years ago, this probably wouldn’t have been possible.  But as consumers and businesses become more comfortable paying bills online or making purchases online, I guess this is just the natural next step.  Javelin Research reports that nearly 44% (38 million) of the 86 million households online made at least one online P2P fund transfer in 2009.  That’s up 27% from 2008.  This is fast, direct and safe.  What’s not to love about it? 

If a bank offers the P2P system, a business owner can login to his/her bank account, input an email address and send a message to the recipient before transferring the money.  The transfer can be done online or via a browser-enabled mobile phone.  The recipient then goes online to claim the money which is automatically deposited into his/her account usually within 24 hours.  So, no more writing checks, buying stamps, dropping in the P. O. box and waiting for it to clear.  If your cash flow tends to be tight, this isn’t for the faint of heart.  The dough moves quickly, so just make sure you’ve got enough to cover the payment in your bank account.  Until next time, have a great July 4th holiday and here’s to good planning!



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Social Housing Finance for Housing the Poor

13 October, 2017



Social Housing Finance for Housing the Poor ?

Copyright 2006 Vincent Wilmot

The need for affordable housing for the relatively poor.

In many countries, including the UK and USA, acceptable housing
cannot be afforded by lower-income families unless subsidised
rent ‘affordable housing’ or ‘social housing’ is made available.
Developers of new social housing face the financial problem of
somehow subsidising their rents, as with housing grants or maybe
using cheaper prefabricated housing.

Rent Subsidy Grants.

The USA and some other countries subsidise affordable housing
only with rent subsidy grants, for which there may often be
severe competition.

Housing Development Grants.

In other countries like the UK new social housing is subsidised
chiefly by up front development grants. There the main grant
funders now favour fewer bigger developers, and there is
increasing grant bidding competition for such housing
development grants.

Bidding for Housing Grants.

Affordable housing developers need successful bidding strategies
for grant applications, and they often need to be appropriate to
changing bidding situations. Needed new affordable housing or
‘social housing’ will generally only be developed if the
developers, subsidy providers and all others involved are
satisfied that a proposed new development project is financially
viable and is good value for money – as well as being for needed
housing.

Demand for Social Housing.

Some areas of a country may get excessive demand for affordable
housing while others get unsustainable low demand. This can
happen when social rents are set way below low-market rents in
some areas and close to low-market rents in other areas –
especially when low-income families face relocation difficulty
that prevents natural market corrections from working.

Social Exclusion in Social Housing.

Social housing development for the poor will tend towards
concentrating unemployed, welfare dependant and problem families
in a disadvantaged socially excluded sub-society. And this often
involves housing problems for the landlord which can include
non-sustainability – needing appropriate social inclusion
strategies.

Social housing developers will generally need some good
financial calculation system for new project appraisal – often
an appropriate Excel calculator spreadsheet. And other
calculator spreadsheets may have other uses, as to help show if
prospective tenants can afford a particular property. These
systems may be developed in-house, but can often be developed
much more cheaply by a specialist.

About the author:

Vincent Wilmot currently lives in Grimsby UK and has several


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Creditrepair2020 Impressions4ucom

12 October, 2017



CreditRepair 2020 
will walk you, step-by-step, through every legal–and we mean EVERY–method
used to remove negative information from credit records.

There is no good
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to pay a consumer credit report repair
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segregation (creating alternative files with a bogus social
security number or federal ID as some would suggest). This is a
solid program that outlines a proven system that has helped
thousands improve their credit reports, and reacquainted them with
the power of financial leverage.

Honestly, no one can
promise you perfect credit overnight. It requires diligently
applying this information over a period of time. Everything you
need to set your credit record straight is thoroughly explained in
this complete resource. It is THE Authoritative Guide To
Consumer Credit Repair! And we guarantee it to be the most
complete, up-to-date, self-help program of its kind.

According
to Consumer Reports magazine, 48% of consumers have errors in
their credit files, and 12% of those errors are severe enough to
result in credit denial. Many more families have been faced with a
recent financial hardship that has left their credit in a
shambles. The reality is that most Americans must face these
conditions at least once in a working life–if not more. Even
though the actual crisis may only last a few months, the credit
fallout can last for 7 to 10 years! That is…if you do nothing.

Regardless of who’s
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about it. You can restore good credit and stop paying thousands of
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Kids and Money Love and Money Tips

11 October, 2017



Parents are not only interested in their children receive knowledge, and develop specific skills but also learn about the values ​​that are required in a rapidly changing society to provide a meaningful life as human beings. Today, the values are still relevant in the lives of adults and young people and their education and reinforcement are a guarantee for a better world.

Why to Teach Children About Money?

By teaching kids about money, they realize that money is important in society and to learn its management is vital, but always associating it with positive values. Parents and school, along with other sectors of society, must take over the teaching of responsible money management and financial culture.

What is the Best Age to Start Learning about Money?

Since they are small, children should start learning what money is and how to manage it with wisdom and maturity. Children are able to understand the concept of money at the age of four years. During this stage they can establish a relationship between the value of a coin and what they can achieve with it. However, very few parents talk about money with their children.

What does “Teaching Kids about Money”?

Teaching children to handle money is much more than prepare them for a lifetime of work and savings. Some parents do not teach their children how to handle or use the money because they think they should not talk about money matters with children, or believe they have enough money to make it a topic of conversation, or even think it is better than children do not know how much money their parents have.

What Things can you do as a Father to your Child Learn to properly use the Money?

• As soon as children can count, start them in the use of money. Observation and repetition are two important ways in Teaching Kids about Money.

• As children grow, let them know your values ​​concerning money such as how to earn it, how to save it and, most importantly, how to spend it wisely. As in other areas of life, the example is the best school.

• Help them understand the difference between needs, desires and wishes. This will prepare them to become responsible consumers and make good spending decisions in the future. This is a great way to Teaching Kids about Money.

• When you give money to kids, give it in bills that encourage savings. For example, if the amount is $ 20.00, give it in bills of $ 1.00 or $ 5.00 and encourage them to save at least one of the bills.

Teaching Kids about Money

•Take the kids to the bank to open their own savings account. Starting early the habit of regular saving is one of the keys to successful savings, but you do not forbid them withdraw part of their savings if they wish to make a purchase, because this could discourage them completely.

• Use regular purchases to teach the value of money. Grocery shopping is often the first experience of spending. Show them how to plan purchases in advance by making a list of needs, avoid waste and compare prices.

• Let your children make decisions about their spending. Even when they do right or wrong, they will learn from their purchasing choices. Join them in their decisions, not decide for them. Give elements to help them deal with the constant pressure from the media and society, this is essential when you are teaching kids about money.

Continue reading up on Teaching Kids about Money here, where there is more tips.



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Mortgage Glossary

10 October, 2017

Mortgage Glossary MasterMoneyTipscom


Please click on the letter below to skip to the definition of the word you are looking for.

ABCDEFGHIJKLMNOPQRSTUVWXYZ

A & D LOAN Acquisition and development loan- a loan for the purchase of raw land for the purpose development.

Abstract Title A written history of the ownership of a parcel of land.

Acceleration Clause Allows the lender to speed up the rate at which your loan comes due or even to demand immediate payment of the entire outstanding balance of the loan should your default on you loan.

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Acknowledgment A declaration by a notary, certifying, by way of personal knowledge or written identification, the identity of the signer.

Adjustable Rate Mortgage A mortgage in which the interest rate is adjusted periodically based on a pre-selected index. Also sometimes known as the renegotiable rate mortgage, the variable rate mortgage or the Canadian rollover mortgage. (ARM)

Adjustment Interval On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, typically one, three or five years, depending on the index.

Affidavit A sworn statement in writing.

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ALTA American Land Title Association An organization of title companies specializing in Real Property Law which has standardized forms and coverage on a national basis. This is standardized coverage.

Amortized / Amortization Amortization refers to the principal portion of the loan payment and is the loan payment by equal periodic payments calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance. A fully amortized loan will be completely paid off at the end of the loan term.

Annual Percentage Rate An interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account points and other credit costs. The APR allows homebuyers to compare different types of mortgages based on the annual cost for each loan. (APR)

Appraisal An estimate of the value of real property, made by a qualified professional called an “appraiser.” An appraisal will be needed to determine the value of your property.

APR Annual Percentage Rate A form of disclosure on the truth and lending form that explains the interest rate after factoring in the cost of obtaining the loan. It is a measure of the cost of credit, expressed as a yearly rate.

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ARM Adjustable Rate Mortgage A mortgage loan where the interest rate is not fixed for the entire term of the loan, but changes during the life of the loan in line with movements in an index rate.

Assumption The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. This must be approved by the lender and be allowed by the note, which was originally signed by the seller.

Back End Ratio This refers to the debt-to-income ratio calculated using principal, interest, taxes, insurance and consumer credit obligations divided by gross monthly income. It is expressed as a percentage.

Balloon Usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract.

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Beneficiary The entity funding the loan. This is the entity to which the loan is owed.

BK / Bankruptcy A reorganization or discharge of debts. Could also be referred to as Chapter 7, 11 or 13.

Broker An individual in the business of assisting in arranging funding or negotiating contracts for a client but who does not loan the money himself. Brokers usually charge a fee or receive a commission for their services.

Buy Down When the lender and/or the home builder subsidizes the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires.

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Cap The highest rate that an adjustable rate mortgage may reach. It can be expressed as the actual rate or as the amount of change allowed above the start rate. For example, a 7.99 % start rate with a 6% rate change cap would have a maximum interest rate cap of 13.99%.

Cash Out Any funds disbursed directly to the borrower.

Certificate of Occupancy A certificate issued by local city government to a builder, stating that the building is in proper condition to be occupied.

Certified Copy A true copy, attested to be true by the officer holding the original. It should have a stamp and signature stating that it is a true copy.

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Clear-to-close Loan is ready to be closed with no additional conditions.

Closing The meeting between the buyer, seller and lender or their agents where the property and funds legally change hands. Also called settlement.

Closing Costs Usually include an origination fee, discount points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. The costs of closing usually are about 3 percent to 6 percent of the total mortgage amount. Or any costs being charged to facilitate granting of the credit request.

Commitment An agreement, often in writing, between a lender and a borrower to loan money at a future date subject to the completion of paperwork or compliance with stated conditions.

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Community Property Property owned in common by a husband and wife, which was not acquired as separate property. A classification of property peculiar to certain states. In community property states, assets may be owned in part by a spouse even if their name does not appear on the title.

Comp. / Comparable A property with the same basic characteristics as the property you are attempting to find the value of (usually a real estate appraisal.) It should have been sold recently and be as similar as possible.

Condominium A property owned as a group, with rights to occupy specific units of the structure. An overseeing board, often referred to as a Homeowners Association, governs the property.

Construction Loan A short term interim loan for financing the cost of construction. The lender advances funds to the builder at periodic intervals as the work progresses.

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Consumer Credit Credit owed by the individual, not secured by real estate.

Conventional Loan A mortgage not insured by FHA or guarantee by the VA or Farmers Home Administration (FMHA).

Conversion Clause A provision in some ARMS, (Adjustable Rate Mortgage) that allows you to change the ARM to a fixed-rate loan at some point during the loan term.

Credit Ratio The ratio, expressed as a percentage, which results when a borrower’s monthly payment obligation on long-term debts is divided by his or her net effective income (FHA/VA loans) or gross monthly income (Conventional loans).

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Credit Report History of buyers past credit performance.

Credit Score The score given to an individual to determine the credit worthiness. These scores come from TRW, Equifax and Trans Union.

D.R. / Debt Ratio The customer’s monthly obligations divided by their monthly gross income. See also Back End.

Deed Legal document which conveys the title to a property.

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Deed of Trust A document used which pledges real property to secure a debt. In some cases a deed of trust can replace a mortgage.

Default Failure to meet legal obligations in a contract, specifically, failure to make the monthly payments on a mortgage.

Deferred Interest See Negative Amortization

Delinquency Failure to make payments on time. This can lead to foreclosure.

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Department of Veterans Affairs An independent agency of the federal government which guarantees long-term, low- or no-down payment mortgages to eligible veterans. (VA)

Derog Letter A letter written by the borrower giving an explanation for any derogatory credit.

Derog This is short for derogatory and refers to negative credit items.

Discharge Following a completed bankruptcy proceeding, discharged debts are no longer owed or collectable. We will require copies of the discharge papers on any prior bankruptcy filings.

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Discount Points Prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g. two points on a $100,000 mortgage would cost $2,000).

Dismissal If a bankruptcy is dropped without being completed, a Bankruptcy Dismissal document will be needed to proceed with the loan. Either the court or the debtor can prompt the dismissal.

Down Payment Money paid to make up the difference between the purchase price and mortgage amount. Down payments usually are 10 percent to 20 percent of the sales price on Conventional loans, and no money down up to 5 percent on FHA and VA loans.

Due-On-Sale Clause A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home.

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Earnest Money Money given by a buyer to a seller as part of the purchase price to bind a transaction or assure payment.

Easements An interest in property, owned by another that entitles the holder to a specific limited use or privilege, such as the right to cross or to build adjoining structures on the property.

Encroachment A fixture of a piece of property which intrudes on another’s property.

Equal Credit Opportunity Act Is a federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs. (ECOA)

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Equity The difference between the fair market value and current indebtedness, also referred to as the owner’s interest.

Escrow Instructions Instructions to the escrow agent giving the parameters and contingencies involved in the transaction and agreed upon by both parties.

Escrow Waiver The Request for a borrower to pay their own taxes and insurance. Escrow wavers are rarely granted with less than a 25% equity position (<75 LTV).

Escrow Refers to a neutral third party who carries out the instructions of both the buyer and seller to handle all the paperwork of settlement or “closing.” Escrow may also refer to an account held by the lender into which the homebuyer pays money for tax or insurance payments.

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Fannie Mae See Federal National Mortgage Association.

Farmers Home Administration Provides financing to farmers and other qualified borrowers who are unable to obtain loans elsewhere. (FMHA)

Federal Home Loan Mortgage Corporation Also called Freddie Mac, is a quasi-governmental agency that purchases conventional mortgages from insured depository institutions and HUD-approved mortgage bankers. (FHLMC)

Federal Housing Administration A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders. FHA also sets standard for underwriting mortgages. (FHA)

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Federal National Mortgage Association Also known as Fannie Mae. A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA. This institution, which provides funds for one in seven mortgages, makes mortgage money more available and more affordable. (FNMA)

Fee Simple The most common form of ownership where the vestee owns both the land and the structures.

FHA See FEDERAL HOUSING ADMINISTRATION

FHA Loan A loan insured by the Federal Housing Administration open to all qualified home purchasers. While there are limits to the size of FHA loans, they are generous enough to handle moderate-priced homes almost anywhere in the country.

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FHA Mortgage Insurance Requires a small fee (up to 3 percent of the loan amount) paid at closing or a portion of this fee added to each monthly payment of an FHA loan to insure the loan with FHA. On a 9.5 percent $75,000 30-year fixed-rate FHA loan, this fee would amount t o either $2,250 at closing or an extra $31 a month for the life of the loan. In addition, FHA mortgage insurance requires an annual fee of 0.5 percent of the current loan amount, the more years the fee must be paid.

FHLMC (FREDDIE-MAC) Federal Home Loan Mortgage Corporation.

Fixed-Rate Mortgage A mortgage on which the interest rate is set for the term of the loan.

Flood Insurance A mandatory insurance for some homeowners whose property is built in a designated flood zone.

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FNMA – (FANNIE-MAE) Federal National Mortgage Association.

Foreclosure A legal procedure in which property securing debt is sold by the lender to pay a defaulting borrower’s debt.

Free and Clear This means the property is completely paid for and has no liens attached.

Functional Obsolescence A detraction from the property value due to the design or material being less functional than the norm.

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GFE Good Faith Estimate of Buyers Loan Charges.

Ginnie Mae See Government National Mortgage Association.

Government National Mortgage Association (GNMA) Also known as Ginnie Mae, provides sources of funds for residential mortgages, insured or guaranteed by FHA or VA.

Graduated Payment Mortgage (GPM) A type of flexible-payment mortgage where the payments increase for a specified period of time and then level off. This type of mortgage has negative amortization built into it.

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Grant Deed A Grant Deed is the most common form of title transfer deed. A Grant Deed contains warranties against prior conveyances or encumbrances.

Gross Monthly Income The total amount the borrower earns per month, before any expenses are deducted.

Guarantee A promise by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract.

Hazard Insurance A form of insurance in which the insurance company protects the insured from specified losses, such as fire, windstorm and the like, it would not cover earthquake, riot, or flood damage.

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Homestead The dwelling (house and contiguous land) of the head of the family. Some states grant statutory exemptions, protecting homestead property (usually to a set maximum amount) against the rights of the creditors. Property tax exemptions are also available in some states.

Housing Expenses-to-Income Ratio The ratio, expressed as a percentage, which results when a borrower’s housing expenses are divided by his/her net effective income (FHA/VA loans) or gross monthly income (Conventional loans).

Impound That portion of a borrower’s monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Also known as reserves.

Index A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments (such as one- three-, and five-year U.S. Treasury Security yields, the monthly average interest rate on loans closed by savings and loan institutions, and the monthly average Costs-of-Funds incurred by savings and loans), which is then used to adjust the interest rate on an adjustable mortgage up or down.

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Interest Bearing A form of interest calculation where the loan is charged at a daily or monthly rate (1/365 or 1/12 of the annual interest rate) on the current outstanding balance.

Investor Money source for a lender.

Joint Tenants A form of holding title where the owners have 100% rights of survivorship unless redirected by a will.

Jumbo Loan A loan which is larger (more than $417,000) than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate.

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Land Contract An agreement between the seller and the buyer where the title is withheld until a time where the required payments have been completed.

Leasehold Estate A kind of real estate ownership where the lessor does not hold title to the property but has use of the property subject to the terms of the lease.

Legal Description A method of geographically locating a piece or parcel of land, which is acceptable in a court of law.

LIBOR London InterBank Offered Rate. LIBOR is the base interest rate paid on deposits between banks in the Eurodollar market.

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Lien A claim upon a piece of property for the payment or satisfaction of a debt or obligation.

Loan Committee Generally the Underwriting process.

Loan Risk The rate category assigned to the loan, which estimates the probable risk of delinquency and loss in the future.

Loan-To-Value Ratio The relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage. (LTV)

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Margin The number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment.

Market Value The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a given time.

Mortgage Escrow Accounts The account set by the Lender to pay Taxes and Insurance on behalf of the Borrower.

Mortgage Insurance Money paid to insure the mortgage when the down payment is less than 20 percent. See Private Mortgage Insurance or FHA Mortgage Insurance.

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Mortgagee The lender.

Mortgagor The borrower or homeowner.

Negative Amortization Amortization means that monthly payments are large enough to pay the interest and reduce the principal on a mortgage. Negative amortization occurs when the monthly payments do not cover all of the interest cost. The interest cost that isn’t covered is added to the unpaid principal balance. This means that even after making many payments, a borrower may owe more than was owed at the beginning of the loan.

Net Effective Income The borrower’s gross income minus federal income tax.

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Non-Assumption Clause Statements in the mortgage contract forbidding the assumption of the mortgage without the prior approval of the lender.

Non-Owner Occupied A property not used as a residence by the owner of the property.

Notary Public A person, designated by the state, which can certify the identity of a person when signing various documents.

Note Short for promissory note. This document gives the parameters of the loan and legally obligates the borrower to pay back the debt.

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Obligations Any debt, or recurring payment the borrower is obligated to pay, including mortgage payments.

Origination Fee The fee charged by a lender to prepare loan documents, make credit checks, inspect and sometimes appraise a property; usually computed as a percentage of face value of the loan.

Owner Occupied Designation given to property used as the owner’s residence.

Owners Policy A policy of the title insurance which protects the buyer against problems with the title.

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P & I Principal and Interest. This refers to the principal and interest portions of the monthly mortgage payment.

P & L / Profit and Loss A statement of a businesses gross income, cost of goods, operating costs and net profit or loss.

P.I.T.I. Principal, interest, taxes and insurance. The complete monthly cost associated with financing a property.

P.U.D. Planned Unit Development. Property owned as a group, where individuals own the specific piece of land and structure they occupy, but also have a divided interest in a common area. A board, often referred to as a Homeowners Association, will govern the development.

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Piggy Back Loan Financing obtained, subordinate to the first mortgage, to facilitate closing the first mortgage. Also known as a Secondary Financing.

PMI Private Mortgage Insurance A way for lenders and the buyers to insure their exposure on the loan to no less than 20% equity in a property.

Points A point is equal to one percent of the principal amount of a mortgage, see also Discount Points.

Power of Attorney An authority by which one person enables another to act on his or her behalf. Power of attorney can be limited to specific areas or be general in some cases.

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PRE-Approval The Buyer has actually begun the application process and an underwriter has approved their income, funds and credit. Beware of any conditions on the approval.

Prelim. / Preliminary Title Report The title report generated at the beginning of the application process. It tells the mortgage company what liens are on the property and gives advice as to what will need to be done to gain clear title prior to recording the trust deed.

Prepaid Interest Charge The portion of interest, collected at loan closing, which covers the time period between funding and the beginning of the first 30-day period covered by the first payment. For example, if the loan closed on 2/15, the first payment due on 4/1 would pay interest from 3/1 to 4/1. The prepaid interest would cover the period from 2/15 to 2/28.

Prepaids Expenses necessary to create an escrow account or to adjust the seller’s existing escrow account. Can include taxes, hazard insurance, private mortgage insurance and special assessments.

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Prepayment Penalty Money charged for an early repayment of debt. Prepayment penalties are allowed in some form (but not necessarily imposed) in 36 states and the District of Columbia.

Prepayment A privilege in a mortgage permitting the borrower to make payments in advance of their due date.

PRE-Qualified Buyer has discussed their financial situation with a loan expert. No attempt has been made to verify the validity of any of the borrowers information. PRE-Qualification is only an indication of what the buyer should qualify for.

Principal The amount of debt, not counting interest, left on a loan.

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Private Mortgage Insurance In the event that you do not have a 20 percent down payments, lenders will allow a smaller down payment-as low as 5 percent in some cases. With the smaller down payments loans, however, borrowers are usually required to carry private mortgage insurance. Private mortgage insurance will require an initial premium payment of 1.0 percent to 5.0 percent of your mortgage amount and may require an additional monthly fee depending on your loan’s structure. On a $75,000 house with a 10 percent down payments, this would mean either an initial premium payment of $2,025 to $3,375, or an initial premium of $675 to $1,130 combined with a monthly payment of $25 to $30. (PMI)

Purchase Agreement The agreement made between the buyer and seller of a property, containing the purchase price and contingencies of the sale.

Quit Claim A deed operating as a release; intended to pass any title, interest or claim, which the grantor may have in the property, but not containing any warranty of a valid interest or title in the grantor.

Rate Float Assuming market risk on an interest rate in the hopes that it will go lower prior to closing.

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Rate Lock Choosing to have no change to a rate for a specific length of time.

Ratios How a buyers housing expense and debt picture relates to their income.

Real Estate Settlement Procedures Act (RESPA) RESPA is a federal law that allows consumers to review information on know future appreciation in the value of the property. May also apply to mortgages where the borrower shares the monthly principal and interest payments with another party in exchange for a part of the appreciation.

Submission This refers to a complete loan application package submitted for approval to the underwriting department.

Subordination Agreement The agreement deta

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VA VETERANS ADMINISTRATION

VA Loan A long-term, low-or no-down payment loan guaranteed by the Department of Veterans Affairs. Restricted to individuals qualified by military service or other entitlements.

VA Mortgage Funding Fee A premium of up to 2 percent (depending on the size of the down payment) paid on a VA-backed loan. On a $75,000 30-year fixed-rate mortgage with no down payment, this would amount to $1,406 either paid at closing or added to the amount financed.

Variable Rate Mortgage (VRM) See Adjustable Rate Mortgage.

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Verification of Deposit (VOD) A document signed by the borrower’s financial institution verifying the status and balance of his/her financial accounts.

Verification of Employment (VOE) A document signed by the borrower’s employer verifying his/her position and salary.

Wraparound Results when an existing assumable loan is combined with a new loan, resulting in an interest rate somewhere between the old rate and the current market rate. The payments are made to a second lender or the previous homeowner, who then forwards the payments to the first lender after taking the additional amount off the top.

Zoning The division of a city or county by legislative regulations into areas (zones) specifying the uses allowable for the real property in these areas.

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