Repayment of a mortgage loan with periodic payments of principal and interest. The payments are calculated so that the debt is paid off at the end of a fixed period.
A report prepared by a qualified real estate appraiser which creates an estimate of the fair market value of a property.
An Interest Rate that is charged by Banks in Bermuda.
Interim financing.
A certificate issued by a local governmental entity responsible for the use of land in the community where the property is located stating that the structures on the property or any improvements made to those structures comply with the codes, ordinances and regulations of that governmental entity and that they may be occupied.
The final step in the mortgage loan process after loan commitment. The closing is a meeting between all parties involved in the mortgage transaction in which mortgage documents are signed. (Also known as, settlement)
Fees paid at a mortgage closing. Some examples of closing costs are title insurance, attorney fees, appraisal fees, recording fees and taxes.
Closing date
In most cases, the date which the sale of a property becomes final and the new owner takes possession.
Property pledged as security for repayment of a mortgage loan.
The transfer of property from one owner to another.
A numerical rating provided on a credit report that establishes creditworthiness based upon a person's past credit/payment history and their current credit standing.
Relationship of a borrower’s monthly payment obligation on long-term debts divided by gross monthly income, expressed as a percentage. (Also known as bottom ratio)
Failure to abide by the terms of a mortgage loan agreement.
A right granted for access to a particular part of your property.
The amount by which the value of the borrower's home exceeds the amount owed on the mortgage loan. If the borrower's home is worth $500,000 and the borrower owes $325,000 on the mortgage loan secured by the borrower's home, then the borrower's equity in that home is $175,000 or 35% equity in the home.
An account established with a mortgage lender comprising of funds from a borrower used to pay taxes and insurance premiums when they become due. (Also known as impounds or reserves)
First mortgage
A mortgage whose lien is superior to the lien of any other mortgage on the same property. This lien is superior either because it was recorded prior to all other mortgages or because the mortgagee of another mortgage, which had been recorded ahead of this mortgage, has agreed to have a lien subordinated to the lien of this mortgage.
Foreclosure
A legal procedure whereby the lender obtains ownership of the property following default by the borrower.
Interest owned by the borrower to the lender on the mortgage loan from the day of the closing to the date covered by the first payment.
The London Interbank Offered Rate Index is the average yield of interbank offered rates for one-year U.S. dollar denominated deposits in the London Market, as published in The Wall Street Journal.
Lien
An encumbrance on property, which acts as security for the payment of a debt or the performance of an obligation. A mortgage is a lien. A lender will want most, if not all, liens on the property removed before making a mortgage loan.
The mortgage amount divided by the lower of the purchase price or the appraised value of the property. This ratio is expressed as a percentage. A lender will use this ratio in determining the maximum mortgage loan that it will make on the property.
A pledge of real estate collateral to secure a debt. Also, the legal document describing and defining the pledge. The mortgage may also include the terms of repayment of the debt.
The lender in a mortgage transaction.
Mortgagor
The borrower in a mortgage transaction.
A written offer by the lender to the applicant, which states the terms under which the lender agrees to make a mortgage loan.
A process in which a conditional commitment is issued after a loan profile is underwritten with all standard documentation except a property appraisal and a title search.
The amount of money borrowed.
Ratios
Guidelines applied by the lender during underwriting a mortgage loan application to determine how large a loan to grant to an applicant. The ratios that lenders use are generally the Loan-to-Value Ratio, Housing-to-Income Ratio and Debt-to-Income Ratio.
An individual employed on a fee or commission basis as agent to bring buyers and sellers together and assist in negotiating real estate contracts between them.
Proceeds of a new loan used to pay off an existing mortgage on the same property.
A written contract setting out the terms under which the buyer agrees to buy. Upon acceptance by the seller, it becomes a legally binding contract subject to the terms and conditions outlined in the document.
Written evidence of the ownership of property, such as a property deed.
A process that examines local public records, laws and related court decisions to determine if any other parties have valid claims against the subject property (such as past due taxes, judgments or mechanics' liens). It also discloses past and current facts about the subject property's ownership.
In mortgage lending, the decision-making process used to determine whether the loan risk is acceptable to the lender. Underwriting involves the satisfactory review of the property appraisal and examination of the borrower's ability and willingness to repay the debt.
