NMLS/MLO Terms 2022 – 2023 With Complete Solution
actual interest rate - annual interest rate paid on a loan (sometimes referred to as the note rate).
... [Show More] This rate is used to calculate the monthly mortgage payments. The actual interest rate is one of two interest rates applied to a mortgage loan. The other is the APR. See annual percentage rate (APR).
adjustable-rate mortgage (ARM) loans - Loans with interest rates that are adjusted periodically based on changes in a preselected index. As a result, the interest rate and monthly payment on these loans will rise and fall with increases and decreases in the market. These mortgage loans must specify how their interest rate changes, usually in relation to a national index such as (but not always) U.S. Treasury bill rates. If interest rates rise, monthly payments will rise. An interest rate cap limits the amount by which the interest rate can change—this is an important feature to consider in an ARM loan.
adjustment interval - The length of time between changes in the interest rate or monthly payment on an ARM loan.
alternative documentation - Instead of full income documentation such as full tax returns, some lenders offer alternative documentation such as bank statements.
amortization
Seppinni, Darrin J. (2005-12-16). The Mortgage Originator Success Kit : The Quick Way to a Six-Figure Income (Kindle Location 5541). McGraw-Hill. Kindle Edition. - Repayment of a loan with periodic payments of both principal and interest calculated to pay off the loan at the end of a fixed period of time.
amount financed - The figure that is used to calculate the APR. It represents the loan amount minus any prepaid finance charges and assumes the loan is kept to maturity and only the required monthly payments are made.
annual percentage rate (APR) - Mortgage interest rate that includes both interest and any additional costs or prepaid finance charges such as prepaid interest, private mortgage insurance, closing fees, and points. The APR represents the total cost of credit on a yearly basis after all charges are taken into consideration. It will usually be slightly higher than the actual interest rate because it includes these additional items and assumes the loan will be kept to maturity.
application - An initial statement of personal and financial information required when applying for a loan.
application fee - The fee charged by the lender to cover the initial costs of processing a loan application.
appraisal - A written analysis of the estimated value of a property. A qualified appraiser who has knowledge of, experience with, and insight into the marketplace prepares the document. It demonstrates approximate fair market value based on recent sales in the neighborhood and is required on purchases and refinances.
appraisal fee - A fee charged by a licensed, certified appraiser to render an opinion of market value as of a specific date..
assignment - The transfer of ownership, rights, or interests in property by one person, the assignor, to another, the assignee.
assignment recording fee - In many instances, after closing, the lender transfers the loan to a specialized loan "servicer" who handles the collection of the monthly payments. The assignment fee covers the cost of recording this transfer at the local recording office.
assumption - A method of selling real estate in which the buyer of the property agrees to become responsible for the repayment of an existing loan on the property. [Show Less]