Application Process

Helping to explain the application process with examples and easy to understand mortgage glossary terms.

What is Stated Documentation? - Definition

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

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 does Amount refer to? - Definition

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? - Definition

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? - Definition

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

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

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

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

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? - Definition

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

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? - Definition

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

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

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

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

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.

What is a VA Loan? - Definition

What is a VA Loan? - Definition
VA (Veterans Administration) Loan – A loan program overseen by the US Department of Veterans Affairs,
that assists veterans with loans for both purchase
and refinance transactions. This benefit for

What is a Adjustable Rate Mortgage (ARM)? - Definition

What is a Adjustable Rate Mortgage (ARM)? - Definition
A ARM (Adjustable Rate Mortgage)is a mortgage that has payments that can adjust according to preset terms. The periodic changes to the interest rate are generally based on changes to the index on which the

What is Amortization Type? - Definition

What is Amortization Type? - Definition
Amortization Type is the basis for how a loan will
be repaid. It usually eludes to things that would influence and change repayment terms during the life

What is Amortization? - Definition

What is Amortization? - Definition
Amortization is the repayment of a loan’s
principle and interest according to an agreed
schedule. The amortization can be determined by the
length of the term and whether or not the loan is a

What is a GPM? - Definition

What is a GPM? - Definition
GPM (Graduated Payment Mortgage) – A mortgage in which the terms allow for a steady increase in rate and payment over a preset term (generally the first
several years). At the end of the preset term the

What is a Legal Description? - Definition

What is a Legal Description? - Definition
Legal Description – A Legal Description of the property identifies the properties location, boundaries, and contents. This includes such things as streams and ponds. The description on the deed or

What is an FHA Loan? - Definition

What is a FHA Loan? - Definition
FHA(Federal Housing Administration) Loan – A loan provided by a lender sponsored by the Federal Housing Administration that typically requires a smaller down

What is A Betterment? - Definition

What is A Betterment? - Definition
Betterment can be a form of mortgage. It is typically a situation where a town requires an upgrade to something such as either your septic and or sewage, and because the town is requiring it they

What is a Mortgage? - Definition

Mortgage - Definition
Lenders view a mortgage as any loan or debt that has a property being used as collateral. A mortgage can also be referred to as a lien, and frequently the type of mortgage is referred to by its position on the deed of the property. The position on the deed