| Hazard Insurance |
| Also called Homeowners Insurance, it is designed to cover
damage due to fire, wind, vandalism, theft, etc. |
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| Heavy Industrial |
| Manufacturing properties comprise the heavy industrial
segment. Frequent uses of such properties are: auto making,
textiles, steel, chemicals, and food processing. Typically
zero to five percent office space. |
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| High-Rise Apartments
|
| A descriptive term for an apartment building in excess of
ten stories, with underground parking, security, and a
standard floor plan. |
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| Home Warranty
Insurance |
| Private insurance insuring a buyer against defects
(usually in plumbing, heating and electrical) in the home
purchased. Although the period of insurance varies and both
new and used homes may be insured. |
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| Impound Account |
| See Escrow |
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| Income Ratio |
| Used to determine qualification for mortgage loans, this
ratio accesses the allowable housing costs in relationship to
a borrower's monthly income. |
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| Index |
| Any rate published by an independent third party (the
government, the federal bank, etc.) which serves as the
measuring device used to determine if interest rates have gone
up or down over time. A wide variety of indexes may be used
with Adjustable Rate Mortgages. |
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| Initial Note Rate |
| The mortgage note rate at the inception of the mortgage.
This rate will change periodically according to the index and
the period of time for which it is guaranteed. |
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| Insurance of
Title |
| Insurance as to who owns a specified interest in
designated real estate, and showing as exceptions to the
insured interest the defects, liens and encumbrances which
exist as against that insured interest. |
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| Interest Cap |
| It is a type of consumer protection that limits the amount
of interest that a loan may be increased or decreased. Yearly
interest caps and life of loan caps are available with many
loans today. |
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| Interest Rate
Buydown |
| A technique of reducing the effective interest charged to
a borrower. It involves the payment of money to a lender to
reduce the borrower's interest rate either temporarily or
permanently. This would help reduce the buyer's payments and
help him qualify for the loan. |
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| Interim
Financing |
| A temporary construction loan made during the completion
of a home or building, which is usually replaced by a
permanent loan after completion and/or sale of the property.
It also may be referred to as a short-term loan or a bridge
loan. |
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| Investment Return
|
| The amount by which your investment gains or loses
(capital appreciation/depreciation and dividend or coupon
income) over a given period of time. Usually expressed as a
percentage of the original amount invested. A five-percent
return means you earned five dollars for every $100 you
invested in the stated time period. Investment return can be
measured over a variety of timeframes (i.e., one-year,
five-years, 10-years, etc.) |
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| Lien |
| A legal claim or security instrument against property for
moneys owed. |
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| Life of Loan Cap |
| Limits the amount that a loan rate can change throughout
the entire life or term of the loan. A typical life of the
loan in use today would be a 5% interest rate cap. |
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| Light Industrial/Assembly
|
| Production lines that assemble components produced
elsewhere and light manufacturing are based in light
industrial/assembly facilities. Office space is usually less
than ten percent. |
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| Loan Origination Fee
|
| A one-time set-up fee charged by the lender to cover the
direct costs of arranging the loan. |
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| Lock-In Rate |
| Some lenders will obtain a commitment from a lender to
guarantee a certain interest rate or other loan feature for a
set period of time, usually from thirty days to one year for a
prepaid fee. This can protect a borrower from interest rates
rising while the application and closing takes place. |
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| Market Value |
| A price estimate obtained for a particular asset if it
were sold in an arm's length transaction on the current
market. For Real Estate: The likely price a buyer is willing
to pay for a property and the likely price a seller will
accept for the property in question. |
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| Mechanics Lien |
| A lien or claim placed on a property as security for
payment for work performed in the construction of the property
and is not compensated for that work. |
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| Mid-Rise Apartments
|
| Six to ten story buildings that are serviced by elevators,
usually have an inner city or dense suburb, and have a limited
range of unit types. |
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| Mortgage |
| A legal document secured against property to the lender
for payment of a debt. It is a two party agreement as opposed
to the three party agreement of a deed of trust. |
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| Mortgage Yours |
| Individual lenders who originate mortgages exclusively for
resale in the secondary mortgage market. These are often sold
to investors such as insurance companies and Fannie Mae. |
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| Mortgage Insurance Premium
(MIP) |
| An insurance premium paid by the borrower on a policy that
promises to pay out the amount owing in the event that the
borrower defaults. |
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| Mortgage Note |
| A written agreement, secured by a mortgage, serves as
proof of indebtedness, and states the manner in which a loan
is repaid. |
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| Mortgagee (Lender) |
| The lender of money to purchase real estate in a mortgage
transaction. One who holds a mortgage on real estate. |
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| Mortgagor |
| The borrower of money to purchase real estate in a
mortgage transaction |
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| Mortgage Information Letter
(MIL) |
| A letter issued by the lender indicating the payoff
balance of a loan as well as any other requirements of loan
payoff. |
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| Multiple Listing Service (MLS)
|
| The service created and run by professionals which
combines the all available listings in an area, except For
Sale By Owner (FSBO) properties, in one directory or
database. |
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| Negative
Amortization |
| When the periodic payments on a loan are not sufficient to
pay the interest which has accumulated. This results in an
increase rather than a decrease in the amount owing on the
mortgage. Also referred to as a deferred interest. |
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| Note |
| A legal document that obligates a borrower to repay a
debt, such as a mortgage note. |
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| Note Rate |
| The interest rate as set out in the mortgage that must be
paid back on the mortgage note in addition to the principal
amount owed. |
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| Office/Warehouse or Research
& Development |
| Properties that have lab facilities, offices, warehouse
facilities, or personal services such as carpentry or machine
repair are typically research and development or
office/warehouse properties. Each property usually allows a
variable combination of office and other uses. |
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| Origination Fee |
| A fee paid to the lender for processing a loan
application. The origination fee is stated in the form of
points and usually amounts to 1% of the loan applied for. |
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