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Terms H-OHazard InsuranceAlso called Homeowners Insurance, it is designed to cover
damage due to fire, wind, vandalism, theft, etc. Heavy IndustrialManufacturing 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. High-Rise ApartmentsA descriptive term for an apartment building in excess of ten
stories, with underground parking, security, and a standard
floor plan. Home Warranty InsurancePrivate 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. Income RatioUsed to determine qualification for mortgage loans, this
ratio accesses the allowable housing costs in relationship to a
borrower's monthly income. IndexAny 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. Initial Note RateThe 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. Insurance of TitleInsurance 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. Interest CapIt 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. Interest Rate BuydownA 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. Interim FinancingA 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. Investment ReturnThe 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.). Life of Loan CapLimits 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. Light Industrial/AssemblyProduction lines that assemble components produced elsewhere
and light manufacturing are based in light industrial/assembly
facilities. Office space is usually less than ten percent. Loan Origination FeeA one-time set-up fee charged by the lender to cover the
direct costs of arranging the loan. Lock-In RateSome 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. Market ValueA 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. Mechanics LienA 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. Mid-Rise ApartmentsSix 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. MortgageA 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. Mortgage YoursIndividual 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. 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. Mortgage NoteA written agreement, secured by a mortgage, serves as proof
of indebtedness, and states the manner in which a loan is
repaid. Mortgagee (Lender)The lender of money to purchase real estate in a mortgage
transaction. One who holds a mortgage on real estate. 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. 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. Negative AmortizationWhen 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. Note RateThe interest rate as set out in the mortgage that must be
paid back on the mortgage note in addition to the principal
amount owed. Office/Warehouse or Research & DevelopmentProperties 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. Origination FeeA 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. |
