Mortgage Glossary, Loan
Terms and Economic Terms for Interest Only Loans
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Mortgage Glossary - D Terms
Debt-to-income ratio: a
comparison of gross income to housing and non-housing expenses;
With the FHA, the-monthly mortgage payment should be no more than
29% of monthly gross income (before taxes) and the mortgage payment
combined with non-housing debts should not exceed 41% of income.
Deed: the document that transfers
ownership of a property.
Deed-in-lieu: to avoid
foreclosure ("in lieu" of foreclosure), a deed is given
to the lender to fulfill the obligation to repay the debt; this
process doesn't allow the borrower to remain in the house but helps
avoid the costs, time, and effort associated with foreclosure.
Default: the inability to
pay monthly mortgage payments in a timely manner or to otherwise
meet the mortgage terms.
Delinquency: failure
of a borrower to make timely mortgage payments under a loan agreement.
Discount point: normally
paid at closing and generally calculated to be equivalent to 1%
of the total loan amount, discount points are paid to reduce the
interest rate on a loan.
Down payment: the portion
of a home's purchase price that is paid in cash and is not part
of the mortgage loan.
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