What is a 3/1 ARM? - Definition
A 3/1 ARM (Adjustable Rate Mortgage) is a loan where the rate is fixed for a three year period, and then adjusts annually every year after until it reaches a predetermined

What is a Purchase? - Definition
A New Mortgage is considered a Purchase transaction when Money is given to a property owner to obtain a transfer of deed to a real estate property. Not every deed transfer is considered a

What is the Loan Purpose? - Definition
In the top portion of the loan application the loan purpose refers to the reason for the loan (what the money is going to be used for. Different
examples of this include; Purchase, Cash

What is Stated Documentation? - Definition
Stated Documentation can be used for both self employed or w2 wage earner’s. This documentation type is generally used because the borrower is not able to prove

What is Full Documentation? - Definition
Full Documentation implies that borrower is able to prove the income and assets that they are stating on the mortgage application. Documents used to verify

What is a Comp Check? - Definition
A Comp Check (or comparable check) is when an appraiser looks at recent comparable sales in the neighborhood (with out physically looking at the
property) to give a quick estimate on a

What does Amount refer to? - Definition
In the top portion of the first page of a mortgage application, the Amount refers to the total dollar amount of the financing the borrower is applying for. This is also known as the loan amount, and

What is a Fixed Rate
A mortgage with a fixed rate is a loan where the rate does not adjust at any point during the life of the loan. This loan should not to be confused with certain adjustable products where the rate may be

What does Number of Months Refer to? - Defintion
On the application the number of months can refer to two things. If there is only one number in this section of the application that the length of the loan and the repayment schedule are the same time

What is an Interest Rate? - Definition
An Interest Rate is the annual cost of borrowed money. The interest rate for a mortgage is generally determined by the risk of the transaction to the investor. Typical things that are used to determine

What is a Subject Property? - Definition
When referring to the application the subject property is the property for which a borrower is attempting to secure financing or refinancing. The property could be either a primary, secondary, or

What is a Temporary Interest Rate Buy Down? - Definition
A temporary interest buy down is one form of a graduated payment mortgage. The Borrower will pay a fixed fee at the front of the loan to buy the rate

What is a Land Contract? - Definition
A land contract exists when a seller acts as the bank (provides the financing) in a purchase transaction (typically on existing real estate). This type of transaction usually involves a significant cash down

What is a Primary Residence
A Primary Residence refers to the property or domicile in which a person lives on a full time basis. A house that is a primary residence is generally considered by lenders to be "owner occupied."

What is a Secondary Residence? - Definition
A Secondary Residence (also known as a second home) is a residence used for vacationing or secondary living purposes. The secondary residence is typically distinguished by distance and use from the

What is Construction-Permanent? - Defintion
Construction-Permanent (Construction to Permanent Loan) is a loan done to finance the building of a new property. This type of financing carries a regular amortization schedule, and does not require any

What is USDA? - Definition
The USDA (US Department of Agriculture/Rural Housing
services) is a government program through the USDA which provides purchase assistance and financing for farms and rural properties that otherwise would not

What is a Conventional Mortgage? - Definition
A Conventional Mortgage refers to any loan that is
not sponsored or insured by a government agency (such
as USDA, FHA, or VA). This type of loan is typically provided by either a bank, or a finance company, and

What is a Construction Loan? - Definition
A Construction loan is a loan done to finance the building of a home or building. Normally, it is a short term loan that is rewritten as a conventional loan once the work is complete.

What is the FHA? - Definition
The FHA (Federal Housing Administration)is the division of the US Department of Housing and Urban Development responsible for setting standards for lending and construction.