Understand the most important lending and mortgage terms. Mortgages can be confusing for the first time home buyer, so let us help explain. Below you'll find explanations for most of the mortgage industry terms.

What is Sale agreement? A contract signed by buyer and seller stating the terms and conditions under which a property will be…
Written by Henry Gilbert
What is Satisfaction? The payment of a debt that satisfies an…
Written by Henry Gilbert
What is Second mortgage? A subordinate mortgage made in addition to a first…
Written by Henry Gilbert
What is Secondary mortgage market? The market into which primary mortgage lenders sell the mortgages they make to obtain funds to originate more new loans. This includes investors such as Fannie Mae and Freddie…
Written by Henry Gilbert
What is Security? The property that will be pledged as collateral for a…
Written by Henry Gilbert
What is Seller Carry-back? An agreement in which the owner of a property provides financing, often in combination with an assumable mortgage. See Owner…
Written by Henry Gilbert
What is Seller’s broker? An agent hired by a seller to represent him/her in negotiations to sell…
Written by Henry Gilbert
What is Seller’s market? Market conditions that favor sellers. With more buyers than sellers in the market, sellers have the negotiating power as demand exceeds…
Written by Henry Gilbert
What is Servicer? An organization that collects principle and interest payments from borrowers and manages borrowers’ escrow accounts. The servicer often services mortgages that have been purchased by an investor in…
Written by Henry Gilbert
What is Servicing (or Loan administration)? The collection of mortgage payments from borrowers and related responsibilities (such as handling escrows for property tax and insurance, foreclosing on defaulted loans and remitting payments to…
Written by Henry Gilbert
What is Settlement (or Closing)? A meeting between the buyer, seller and lender (or their agents) where property and funds legally change…
Written by Henry Gilbert
What is Settlement cost (HUD guide)? A booklet given to consumers after applying for a loan that provides an overview of the lending…
Written by Henry Gilbert
What is Settlement costs? See Closing…
Written by Henry Gilbert
What is Settlement sheet (HUD-1)? The computation of costs payable at closing that determines the seller's net proceeds and the buyer's net…
Written by Henry Gilbert
What is Short Sale? A short sale is a sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree…
Written by Henry Gilbert
What is Simple interest? Interest that is computed only on the principal…
Written by Henry Gilbert
What is Standard Payment Calculation? The method used to determine the monthly payment required to repay the remaining balance of a mortgage in substantially equal installments over the remaining term of the mortgage at the current…
Written by Henry Gilbert
What is Start rate? A pre-determined rate of interest that will be applied to the loan until the date of the first interest rate…
Written by Henry Gilbert
What is Step-Rate Mortgage? A mortgage that allows for the interest rate to increase according to a specified schedule (i.e., seven years), resulting in increased payments as well. At the end of the specified period, the rate…
Written by Henry Gilbert
What is Subsidized second mortgage? Alternative financing option for low- and moderate-income households that also includes a down payment and a first mortgage, with funds for the second mortgage provided by city, county or state…
Written by Henry Gilbert
What is Survey? A measurement of land, prepared by a licensed surveyor, showing a property's boundaries, elevations, improvements and relationship to surrounding…
Written by Henry Gilbert
What is Sweat equity? Value added to a property by improvements made by the…
Written by Henry Gilbert


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