http://creditfederal.com/article en-us http://creditfederal.com/article N/A article@creditfederal.com Fri, 10 Feb 2012 19:15:42 CST 20 http://creditfederal.com/article/blogs/411/Online-Banking-Accounts Many people have discovered the benefits of online bank checking accounts. Mainly the 24 hour banking availability, the instant transfers, and the ease of bill paying and tracking expenses. FDIC Online Banking Suggestions:See if your current bank offers online account, and whether they are any fees. Most banks don't charge for basic Internet banking such as reviewing your account balances and transferring funds between accounts. If your bank doesn't offer Internet banking or the fees seem high, shop around. Visit the Web sites of other banks to compare their Internet banking services and the fees and limitations.Review ratings. Each year, independent consultants rate various institutions' Internet banking services for reliability, speed and ease of use. You may want to take a look at these ratings before you pick an institution for online banking. Consider mobile banking. That refers to the relatively recent ability to do your banking not just from your home computer but also from a smartphone or a tablet computer. Check the bank's Web site to confirm that your mobile device can be used and that you understand which services are available. Credit Federal Wed, 11 Jan 2012 00:00:00 CST http://creditfederal.com/article/blogs/410/Tax-Refund-Auto-Loan-Down-Payment If your car is constantly needing repair, instead of using your tax refund to cover maintenance costs you could use that money towards a down payment on a new car. Even if you intend to use your old car as a trade-in to cover the down payment, by adding your tax refund you can get a better deal, a lower interest rate, and your monthly payments will be lower. In addition to being more friendly to your budget, the lower installment payments also make it easier for you to occasionally include additional principle payments to get the loan paidoff quickly. And there's another huge benefit... the depreciation on your car will be lower as well. Cars lose a significant amount of value the very moment you drive it off the dealership parking lot. Typical down payments are 15-20% of the car price. Below is a handy chart to help you decide how much loan you can afford based upon your downpayment and/or trade-in value.   New or UsedVehicle Price15% DownPayment20% DownPayment   $8,000$1,200$1,600$10,000$1,500$2,000$15,000$2,250$3,000$20,000$3,000$4,000$25,000$3,750$5,000$30,000$4,500$6,000  Credit Federal Tue, 10 Jan 2012 00:00:00 CST http://creditfederal.com/article/blogs/409/Types-of-Secured-and-Unsecured-Personal-Loan-Applications Secured Auto Loan - There are multiply types of auto loans, including: financing for a brand new car, a second hand used car, refinancing an existing auto loan, or getting a loan on a car that is fully paid off.Secured Home Loan - This includes a new home purchase, refinancing an existing loan, or getting cash equity from a home that is 100% paid off.Secured Personal Loan - This type of loan typically uses property such as an auto or a home in order to secure the loan. Although the loan requires collateral, there are benefits such as lower interest and the largest personal loan amounts possible with very long term monthly installment payments.Unsecured Personal Loan - The benefit of this type of loan is that some are offered with absolutely no credit check, require no collateral and offer instant guaranteed approval for bad credit people. The cons; however, is that these high risk loans usually have limited amounts and are short term. Some lenders offer a pseudo long term of up to 2 years.Unsecured Line of Credit (Equity or Credit Card) - The most popular of these unsecured personal loans are in the form of unsecured credit cards which have a line of credit. Or, you can get a personal line of credit through your mortgage. Credit Federal Sat, 07 Jan 2012 00:00:00 CST http://creditfederal.com/article/blogs/407/Chargeoff-Christmas-credit-card-debt File bankruptcy or chargeoff Christmas credit card debt and other unsecured bills. If you've exhausted all solutions for meeting your financial obligations, it may be in your best interest to file bankruptcy. Although bankruptcy is much the same as simply not repaying debt, it's a legal chargeoff procedure. Both options; however, will have a severe negative impact on your credit score and will make it difficult to obtain new credit at favorable terms. Instead of charging off Christmas debt, consider a debt settlement agreement.   Credit Federal Tue, 03 Jan 2012 00:00:00 CST http://creditfederal.com/article/blogs/406/Christmas-Debt-Personal-Loans A long term debt consolidation loan to payoff Christmas credit card bills. Homeowners can use the equity in their homes to obtain a low interest, long term debt consolidation loan, and use that money to payoff high interest debt. Depending upon their current mortgage interest rate and their refinance rate, they may also be able to reduce their mortgage payments. Review lender Terms & Conditions before signing a loan agreement. Short term, no credit check unsecured loan for bad credit or good credit people to pay Christmas bills: Have a credit card payment or other bill due, but don't have money for the payment? If you need a short term loan so you can make a bill payment on time and avoid a late fee, consider a no credit check, unsecured payday loan. Be sure to repay the loan immediately to avoid excessive fees.   Credit Federal Tue, 03 Jan 2012 00:00:00 CST http://creditfederal.com/article/blogs/263/Get-Out-of-Christmas-Credit-Card-Debt Free tips and advice on how to get out of Christmas credit card debt. Did your credit cards gain a few pounds over the holidays along with you? It is fun to make charges on credit cards during the holidays and see the joy that gifts bring. That is until the credit card statements glare at you from inside the mailbox. Just like we put on extra pounds - so will credit card balances during the holidays. Just like we tackle loosing the fat pounds, we can attack credit card balances to gain control.*Don't ignore credit card debts - it can only harm your credit scores when debts are paid late - not to mention late fees can be as high as $35.00 - why add more fees onto the balance? It is not worth the stress. Pay more than the minimum due and do it quick.*Divide and conquer credit card debts - get all those credit card statements and place them on the table in order from greatest to least - yes this will help so do it! Start paying more on the credit card with the lowest balance and work hard to pay it off as soon as possible so you have pride in accomplishing the first credit card on the list. Another option is to balance transfer all the balances of all credit cards onto ONE, LOW interest credit card so you only have one credit card balance to focus on paying  off.*Hide, freeze, or file away all credit cards - Do not make any more Charges until you have paid off holiday debts. Why be stressed over having credit card balances and then keep charging so that it takes longer to pay off even more debts?*Credit card power tip - knowing what debts are owed on credit cards is half the battle. Taking control by knowing when you owe and how much is owed is enpowering. Get in the habit of paying something as soon as you get a statement. It takes about three to four times of doing something to make it a habit - so after about three months you should not have only made a good habit of paying credit card balances on time - you will have made a dent in conquering credit card debts - Give yourself a pat on the back. Don't let the joy of giving during the holidays be taken away after the holidays by credit card debts. Download our free expense tracking software. Credit Federal Mon, 02 Jan 2012 00:00:00 CST http://creditfederal.com/article/blogs/408/Top-10-New-Year%26%2339%3Bs-Financial-Resolutions%3A Serious Version:I will not write a check if I haven't balanced my checkbook within the past 30 days.I will not make any credit card charges which I cannot payoff quickly.I will put money into savings every paycheck.I will pay down on outstanding debt by making additional payments or adding extra principal payments.I will secure financial protection by getting car, home/renter, medical and life insurance policies.I will invest for my retirement.I will focus on getting a promotion/pay raise by working harder, by keeping my resume updated, and by obtaining continued education.I will pay all my bills timely to avoid late payments.I will review my credit reports to ensure they are accurate and; if not, I will fix errors, get outdated entries removed, and will satisify legitimate bad credit entries.I will discuss finances with my spouse and children so we can all make sound financial decisions together.Funny Version:Before paying with a check, first I will drop the check to see if it bounces.Before I charge a purchase to a credit card, I will first flip a coin to decide if I might be able to repay timely.I will stop robbing my piggy bank (sofa cushions) to fund my daily latte.I will pay down on debt whenever there are no decent videos to rent.I'll try not to drive my car when the insurance lapses, while also hoping I don't get sick or have a fire.I will prepare for retirement by marrying a rich spouse.I will increase my hourly pay rate ratio by arriving late to work and sneaking out early.If I don't have enough money to pay a bill on time, in the meantime I'll mail the creditor a check which I 'accidentally' forgot to sign.I will use the Social Security Number of a family member who has better credit whenever I apply for a loan.I will point out when my spouse or children spend more than I do, and blame them for our financial ruin. Credit Federal Fri, 30 Dec 2011 00:00:00 CST http://creditfederal.com/article/blogs/403/How-much-money-can-I-borrow%3F To find out what the maximum loan amount you can get based upon your ability to repay, our newest loan installment calculator can quickly help you. All you have to do is decide how much you can afford to pay in bi-weekly or monthly installments, input the interest rate charged by the lender, and the calculator will reveal the max loan amount you can get based upon your repayment ability and the interest rate. Credit Federal Mon, 10 Oct 2011 00:00:00 CDT http://creditfederal.com/article/blogs/402/Mortgage-Terminology---Mortgage-industry-jargon 7/23 and 5/25 Mortgages - Mortgages with a one time rate adjustment after seven years and five years respectively.3/1 5/1 7/1 and 10/1 ARMs - Adjustable rate mortgages in which rate is fixed for three year five year seven year and 10-year periods respectively but may adjust annually after that.Acceleration - The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor (borrower) or by using the right vested in the Due on Sale Clause.Adjustable Rate Mortgage (ARM) - A mortgage in which the interest rate is adjusted periodically based on a pre-selected index. Also sometimes known as a renegotiable rate mortgage variable rate mortgage or Canadian rollover mortgage.Adjusted Basis - The cost of a property plus the value of any capital expenditures for improvements to the property minus any depreciation taken.Adjustment Date - The date that the interest rate changes on an adjustable rate mortgage (ARM).Adjustment Interval - On an adjustable rate mortgage the time between changes in the interest rate and/or monthly payment typically one three or five years depending on the index.Adjustment Period - The period elapsing between adjustment dates for an adjustable rate mortgage (ARM).Affordability Analysis - An analysis of a buyer liabilities and available funds and considers the type of mortgage you plan to use the area where you want to purchase a home and the closing costs that are likely.Amortization - Loan payment divided into equal periodic payments calculated to pay off the debt at the end of a fixed period including accrued interest on the outstanding balance.Amortization Term - The length of time required to amortize the mortgage loan expressed as a number of months. For example 360 months is the amortization term for a 30-year fixed rate mortgage.Annual Percentage Rate (APR) - The measurement of the full cost of a loan including interest and loan fees expressed as a yearly percentage rate. Because all lenders apply the same rules in calculating the annual percentage rate it provides consumers with a good basis for comparing the cost of different loans.Appraisal - An estimate of the value of property made by a qualified professional called an "appraiser. based on an appraiser's knowledge experience and analysis of the property.Assessment - A local tax levied against a property for a specific purpose such as a sewer or street lights.Assignment - The transfer of a mortgage from one person to another.Assumability - An assumable mortgage can be transferred from the seller to the new buyer. Generally requires a credit review of the new borrower and lenders may charge a fee for the assumption. If a mortgage contains a due on sale clause it may not be assumed by a new buyer.Assumption - The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt unlike a new mortgage where closing cost and new probably higher market rate interest charges will apply.Assumption Fee - The fee paid to a lender (usually by the purchaser of real property) when an assumption takes place.Balloon Mortgage - A loan which is amortized for a longer period than the term of the loan. Usually this refers to a thirty year amortization and a five or seven year term. At the end of the term of the loan the remaining outstanding principal on the loan is due. This final payment is known as a balloon payment.Balloon Payment - The final lump sum paid at the maturity date of a balloon mortgage.Biweekly Payment Mortgage - A plan to reduce the debt every two weeks (instead of the standard monthly payment schedule). The 26 (or possibly 27) biweekly payments are each equal to one half of the monthly payment required if the loan were a standard 30-year fixed rate mortgage. The result for the borrower is a substantial savings in interest.Blanket Mortgage - A mortgage covering at least two pieces of real estate as security for the same mortgage.Borrower (Mortgagor) - One who applies for and receives a loan in the form of a mortgage with the intention of repaying the loan in full.Bridge Loan - A second trust that is collateralized by the borrower's present home allowing the proceeds to be used to close on a new house before the present home is sold. Also known as "swing loan."Broker - An individual in the business of assisting in arranging funding or negotiating contracts for a client but who does not loan the money himself. Brokers usually charge a fee or receive a commission for their services.Buy Down - When the lender and/or the home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low they will increase when the subsidy expires.Cash Flow - The amount of cash derived over a certain period of time from an income producing property. The cash flow should be large enough to pay the expenses of the income producing property (mortgage payment maintenance utilities etc...).Caps (interest) - Consumer safeguards which limit the amount of change to the interest rate for an adjustable rate mortgage.Caps (payment) - Consumer safeguards which limit the amount of change to the monthly payments for an adjustable rate mortgage.Certificate of Eligibility - The document given to qualified veterans which entitles them to VA guaranteed loans for homes business and mobile homes. Certificates of eligibility may be obtained by sending form DADA (Separation Paper) to the local VA office with VA form 1880 (Request for Certificate of Eligibility).Certificate of Reasonable Value (CRV) - An appraisal issued by the Veterans Administration showing the property's current market value.Certificate of Veteran Status - The document given to veterans or reservists who have served 90 days of continuous active duty (including training time). It may be obtained by sending DD 214 to the local VA office with form 26-8261a (Request for Certificate of Veteran Status). This document enables veterans to obtain lower down payments on certain FHA insured loans.Change Frequency - The frequency (in months) of payment and/or interest rate changes in an adjustable rate mortgage (ARM).Closing - The meeting between the buyer seller and lender or their agents where the property and funds legally change hands also called settlement. Closing costs usually include an origination fee discount points appraisal fee title search and insurance survey taxes deed recording fee credit report charge and other costs assessed at settlement. The cost of closing usually are about 3 percent to 6 percent of the mortgage amount.Closing Costs - Expenses over and above the price of the property that are incurred by buyers and sellers when transferring ownership of a property. Closing costs normally include an origination fee property taxes charges for title insurance and escrow costs appraisal fees etc. Closing costs will vary according to the area country and the lenders used.COFI - An adjustable-rate mortgage with a rate that adjusts based on a cost-of-funds index often the 11th District Cost of Funds.Construction Loan - A short term interim loan to pay for the construction of buildings or homes. These are usually designed to provide periodic disbursements to the builder as he or she progresses.Consumer Reporting Agency (or Bureau) - An organization that handles the preparation of reports used by lenders to determine a potential borrower's credit history. The agency gets data for these reports from a credit repository and other sources.Contract Sale or Deed: - A contract between purchaser and a seller of real estate to convey title after certain conditions have been met. It is a form of installment sale.Conventional Loan - A mortgage not insured by FHA or guaranteed by VA.Conversion Clause - A provision in an ARM allowing the loan to be converted to a fixed-rate at some point during the term. Usually conversion is allowed at the end of the first adjustment period. The conversion feature may cost extra.Credit Report - A report documenting the credit history and current status of a borrower's credit standing.Credit Risk Score - A credit risk score is a statistical summary of the information contained in a consumer's credit report. The most well known type of credit risk score is the Fair Isaac or FICO score. This form of credit scoring is a mathematical summary calculation that assigns numerical values to various pieces of information in the credit report. The overall credit risk score is highly relative in the credit underwriting process for a mortgage loan.Debt-to-Income Ratio - The ratio expressed as a percentage which results when a borrower's monthly payment obligation on long term debts is divided by his or her gross monthly income. See housing expenses-to-income ratio.Deed of Trust - In many states this document is used in place of a mortgage to secure the payment of a note.Default - Failure to meet legal obligations in a contract specifically failure to make the monthly payments on a mortgage.Deferred Interest - When a mortgage is written with a monthly payment that is less than required to satisfy the note rate the unpaid interest is deferred by adding it to the loan balance. See negative amortization.Delinquency - Failure to make payments on time. This can lead to foreclosure.Department of Veterans Affairs (VA) - An independent agency of the federal government which guarantees long term low-or-no-down payment mortgages to eligible veterans.Discount Point - See pointDown Payment - Money paid to make up the difference between the purchase price and the mortgage amount.Due-on-Sale-Clause - A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home.Earnest Money - Money given by a buyer to a seller as part of the purchase price to bind a transaction or assure payment.Entitlement - The VA home loan benefit is called an entitlement (i.e. entitlement for a VA guaranteed home loan). This is also known as eligibility.Equal Credit Opportunity Act (ECOA) - A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race color religion national origin age sex marital status or receipt of income from public assistance programs.Equity - The difference between the fair market value and current indebtedness also referred to as the owner's interest. The value an owner has in real estate over and above the obligation against the property.Escrow - An account held by the lender into which the home buyer pays money for tax or insurance payments. Also earnest deposits held pending loan closing.Escrow Disbursements - The use of escrow funds to pay real estate taxes hazard insurance mortgage insurance and other property expenses as they become due.Escrow Payment - The part of a mortgagor hazard insurance mortgage insurance lease payments and other items as they become due.Fannie Mae - See Federal National Mortgage Association.Farmers Home Administration (FmHA) - Provides financing to farmers and other qualified borrowers who are unable to obtain loans elsewhere.Federal Home Loan Bank Board (FHLBB) - The former name for the regulatory and supervisory agency for federally chartered savings institutions. The agency is now called the Office of Thrift SupervisionFederal Home Loan Mortgage Corporation(FHLMC) also called "Freddie Mac"A government sponsored entity that purchases conventional mortgage from insured depository institutions and HUD-approved mortgage bankers.Federal Housing Administration (FHA) - A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders. FHA also sets standards for underwriting mortgages.Federal National Mortgage Association (FNMA) also know as "Fannie Mae" - A government sponsored entity that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA.FHA Loan - A loan insured by the Federal Housing Administration open to all qualified home purchasers. While there are limits to the size of FHA loans they are generous enough to handle moderately priced homes almost anywhere in the country.FHA Mortgage Insurance - Requires a fee (up to 2.25 percent of the loan amount) paid at closing to insure the loan with FHA. In addition FHA mortgage insurance requires an annual fee of up to 0.5 percent of the current loan amount paid in monthly installments. The lower the down payment the more years the fee must be paid.FHLMC - The Federal Home Loan Mortgage Corporation provides a secondary market for savings and loans by purchasing their conventional loans. Also known as "Freddie Mac."Firm Commitment - A promise by FHA to insure a mortgage loan for a specified property and borrower. A promise from a lender to make a mortgage loan.First Mortgage - The primary lien against a property.Fixed Installment - The monthly payment due on a mortgage loan including payment of both principal and interest.Fixed Rate Mortgage - The mortgage interest rate will remain the same on these mortgages throughout the term of the mortgage for the original borrower.Fully Amortized ARM - An adjustable rate mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balance at the interest accrual rate over the amortization term.FNMA - The Federal National Mortgage Association is a secondary mortgage institution. FNMA buys VA FHA and conventional mortgages from primary lenders. Also known as "Fannie Mae."Foreclosure - A legal process by which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage. Also known as a repossession of property.Freddie Mac - See Federal Home Loan Mortgage CorporationGinnie Mae - See Government National Mortgage Association.Government National Mortgage Association (GNMA) - Also known as "Ginnie Mae." Provides sources of funds for residential mortgages insured or guaranteed by FHA or VA.Graduated Payment Mortgage (GPM) - A type of flexible payment mortgage where the payments increase for a specified period of time and then level off. This type of mortgage has negative amortization built into it.Growing Equity Mortgage (GEM) - A fixed rate mortgage that provides scheduled payment increases over an established period of time. The increased amount of the monthly payment is applied directly toward reducing the remaining balance of the mortgage.Guaranty - A promise by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract.Guarantee Mortgage - A mortgage that is guaranteed by a third party.Hazard Insurance - A form of insurance in which the insurance company protects the insured from specified losses such as fire windstorm and the like.Housing Expenses-to-Income Ratio - The ratio expressed as a percentage which results when a borrower's housing expenses are divided by his/her gross monthly income. See debt-to-income ratio.HUD-1 Statement - A document that provides an itemized listing of the funds that are payable at closing. Items that appear on the statement include real estate commissions loan fees points and initial escrow amounts. Each item on the statement is represented by a separate number within a standardized numbering system. The totals at the bottom of the HUD-1 statement define the seller's net proceeds and the buyer's net payment at closing.Impound - The portion of a borrower's monthly payments held by the lender or servicer to pay for taxes hazard insurance mortgage insurance lease payments and other items as they become due. Also known as reserves.Index - A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments (such as one three and five year U.S. Treasury security yields the monthly average interest rate on loans closed by savings and loan institutions and the monthly average costs-of-funds incurred by savings and loans) which is then used to adjust the interest rate on an adjustable mortgage up or down.Indexed Rate - The sum of the published index plus the margin. For example if the index is 4% and the margin is 2.75% the indexed rate would be 6.75%. Often lenders charge less than the indexed rate the first year of an adjustable rate mortgage.Initial Interest Rate - This refers to the original interest rate of the mortgage at the time of closing. This rate changes for an adjustable rate mortgage (ARM). It's also known as "start rate" or "teaser."Installment - The regular periodic payment that a borrower agrees to make to a lender.Insured Mortgage - A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (MI).Interest - The fee charged for borrowing money.Interest Accrual Rate - The percentage rate at which interest accrues on the mortgage. In most cases it is also the rate used to calculate the monthly payments.Interest Rate Buydown Plan - An arrangement that allows the property seller to deposit money to an account. That money is then released each month to reduce the mortgagor's monthly payments during the early years of a mortgage.Interest Rate Ceiling - For an adjustable rate mortgage (ARM) the maximum interest rate as specified in the mortgage note.Interest Rate Floor - For an adjustable rate mortgage (ARM) the minimum interest rate as specified in the mortgage note.Interim Financing - A construction loan made during completion of a building or a project. A permanent loan usually replaces this loan after completion.Investor - A money source for a lender.Jumbo Loan - A loan which is larger than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans cannot be funded by these two agencies they usually carry a higher interest rate.Late Charge - The penalty a borrower must pay when a payment is made a stated number of days after the due date.Lease-Purchase Mortgage Loan - An alternative financing option that allows low and moderate income home buyers to lease a home with an option to buy. Each month's rent payment consists of principal interest taxes and insurance (PITI) payments on the first mortgage plus an extra amount that accumulates in a savings account for a down payment.Liabilities - A person's financial obligations. Liabilities include long term and short term debt.Lien - A claim upon a piece of property for the payment or satisfaction of a debt or obligation.Lifetime Payment Cap - For an adjustable rate mortgage (ARM) a limit on the amount that payments can increase or decrease over the life of the mortgage.Lifetime Rate Cap - For an adjustable rate mortgage (ARM) a limit on the amount that the interest rate can increase or decrease over the life of the loan. See cap.Loan - A sum of borrowed money (principal) that is generally repaid with interest.Loan to Value Ratio - The relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage.Lock - A lender's guarantee that the mortgage rate quoted will be good for a specific number of days from the day of application.Margin - The amount a lender adds to the index on an adjustable rate mortgage to establish the adjusted interest rate.Market Value - The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a given time.Maturity - The date on which the principal balance of a loan becomes due and payable.MIP (Mortgage Insurance Premium) - Insurance from FHA to the lender against incurring a loss on account of the borrower's default.Monthly Fixed Installment - The portion of the total monthly payment that is applied toward principal and interest. When a mortgage negatively amortizes the monthly fixed installment does not include any amount for principal reduction and doesn't cover all of the interest. The loan balance therefore increases instead of decreasing.Mortgage - A legal document that pledges a property to the lender as security for payment of a debt.Mortgage Banker - A company that originates mortgages for resale in the secondary mortgage market.Mortgage Broker - An individual or company that charges a service fee to bring borrowers and lenders together for the purpose of loan origination.Mortgagee - The lender.Mortgage Insurance - Money paid to insure the mortgage when the down payment is less than 20 percent. See private mortgage insurance FHA mortgage insurance.Mortgage Life Insurance - A type of term life insurance. In the event that the borrower dies while the policy is in force the mortgage debt is automatically paid by insurance proceeds.Mortgagor - The borrower or homeowner.Negative Amortization - When your monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the unpaid balance of the loan. The home buyer ends up owing more than the original amount of the loan.Net Effective Income - The borrower's gross income minus federal income tax.Non Assumption Clause - A statement in a mortgage contract forbidding the assumption of the mortgage without the prior approval of the lender.Note - A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.Office of Thrift Supervision (OTS) - The regulatory and supervisory agency for federally chartered savings institutions. Formally known as Federal Home Loan Bank BoardOne Year Adjustable Rate Mortgage - Mortgage where the annual rate changes yearly. The rate is usually based on movements of a published index plus a specified margin chosen by the lender.Origination Fee - The fee charged by a lender to prepare loan documents make credit checks inspect and sometimes appraise a property; usually computed as a percentage of the face value of the loan.Owner Financing - A property purchase transaction in which the party selling the property provides all or part of the financing.Payment Change Date - The date when a new monthly payment amount takes effect on an adjustable rate mortgage (ARM) or a graduated-payment mortgage (GPM). Generally the payment change date occurs in the month immediately after the adjustment date.Periodic Payment Cap - A limit on the amount that payments can increase or decrease during any one adjustment period.Periodic Rate Cap - A limit on the amount that the interest rate can increase or decrease during any one adjustment period regardless of how high or low the index might be.Permanent Loan - A long term mortgage usually ten years or more. Also called an "end loan."PITI - Principal interest taxes and insurance. Also called monthly housing expense.Pledged Account Mortgage (PAM):Money is placed in a pledged savings account and this fund plus earned interest is gradually used to reduce mortgage payments.Points (Loan Discount Points) - Prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g. two points on a $100000 mortgage would cost $2000).Power of Attorney - A legal document authorizing one person to act on behalf of another.Preapproval - The process of determining how much money you will be eligible to borrow before you apply for a loan.Prepaid Expenses - Necessary to create an escrow account or to adjust the seller's existing escrow account. Can include taxes hazard insurance private mortgage insurance and special assessments.Prepayment - A privilege in a mortgage permitting the borrower to make payments in advance of their due date.Prepayment Penalty - Money charged for an early repayment of debt. Prepayment penalties are allowed in some form (but not necessarily imposed) in many states.Primary Mortgage Market - Lenders such as savings and loan associations commercial banks and mortgage companies who make mortgage loans directly to borrowers. These lenders sometimes sell their mortgages to the secondary mortgage markets such as FNMA or GNMA etc Interest Taxes and Insurance (PITI) The four components of a monthly mortgage payment. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the monthly cost of property taxes and homeowners insurance whether these amounts are paid into an escrow account each month or not.Private Mortgage Insurance (PMI) - In the event that you do not have a 20 percent down payment lenders will allow a smaller down payment - as low as 3 percent in some cases. With the smaller down payment loans however borrowers are usually required to carry private mortgage insurance. Private mortgage insurance will usually require an initial premium payment and may require an additional monthly fee depending on your loan's structure.Qualifying Ratios - Calculations used to determine if a borrower can qualify for a mortgage. They consist of two separate calculations: a housing expense as a percent of income ratio and total debt obligations as a percent of income ratio.Rate Lock - A commitment issued by a lender to a borrower or another mortgage originator guaranteeing a specified interest rate and lender costs for a specified period of time.Realtor® - A real estate broker or an associate holding active membership in a local real estate board affiliated with the National Association of Realtors.Real Estate Agent - A person licensed to negotiate and transact the sale of real estate on behalf of the property owner.Real Estate Settlement Procedures Act (RESPA) - A consumer protection law that requires lenders to give borrowers advance notice of closing costs.Recission - The cancellation of a contract. With respect to mortgage refinancing the law that gives the homeowner three days to cancel a contract in some cases once it is signed if the transaction uses equity in the home as security.Recording Fees - Money paid to the lender for recording a home sale with the local authorities thereby making it part of the public records.Refinance - Obtaining a new mortgage loan on a property already owned often to replace existing loans on the property.Renegotiable Rate Mortgage - A loan in which the interest rate is adjusted periodically. See adjustable rate mortgage.RESPA - Short for the Real Estate Settlement Procedures Act. RESPA is a federal law that allows consumers to review information on known or estimated settlement costs once after application and once prior to or at settlement. The law requires lenders to furnish the information after application only.Reverse Annuity Mortgage (RAM) - A form of mortgage in which the lender makes periodic payments to the borrower using the borrower's equity in the home as collateral for and repayment of the loan.Revolving Liability - A credit arrangement such as a credit card that allows a customer to borrow against a pre-approved line of credit when purchasing goods and services.Satisfaction of Mortgage - The document issued by the mortgagee when the mortgage loan is paid in full. Also called a "release of mortgage."Second Mortgage - A mortgage made subsequent to another mortgage and subordinate to the first one.Secondary Mortgage Market - The place where primary mortgage lenders sell the mortgages they make to obtain more funds to originate more new loans. It provides liquidity for the lenders.Security - The property that will be pledged as collateral for a loan.Seller Carry Back - An agreement in which the owner of a property provides financing often in combination with an assumable mortgage. See owner financing.Servicer - An organization that collects principal and interest payments from borrowers and manages borrower escrow accounts. The servicer often services mortgages that have been purchased by an investor in the secondary mortgage market.Servicing - All the steps and operations a lender performs to keep a loan in good standing such as collection of payments payment of taxes insurance property inspections and the like.Settlement/Settlement Costs - See closing/closing costsShared Appreciation Mortgage (SAM) - A mortgage in which a borrower receives a below market interest rate in return for which the lender (or another investor such as a family member or other partner) receives a portion of the future appreciation in the value of the property. May also apply to mortgage where the borrowers shares the monthly principal and interest payments with another party in exchange for part of the appreciation.Simple Interest - Interest which is computed only on the principle balance.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 interest rate.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 and payments will remain constant for the remainder of the loan.Survey - A measurement of land prepared by a registered land surveyor showing the location of the land with reference to known points its dimensions and the location and dimensions of any buildings.Sweat Equity - Equity created by a purchaser performing work on a property being purchased.Third Party Origination - When a lender uses another party to completely or partially originate process underwrite close fund or package the mortgages it plans to deliver to the secondary mortgage market.Title - A document that gives evidence of an individual's ownership of property.Title Insurance - A policy usually issued by a title insurance company which insures a home buyer against errors in the title search. The cost of the policy is usually a function of the value of the property and is often borne by the purchaser and/or seller. Policies are also available to protect the lender's interests.Title Search - An examination of municipal records to determine the legal ownership of property. Usually is performed by a title company.Total Expense Ratio - Total obligations as a percentage of gross monthly income including monthly housing expenses plus other monthly debts.Truth in Lending - A federal law requiring disclosure of the Annual Percentage Rate to home buyers shortly after they apply for the loan. Also known as Regulation Z.Two Step Mortgage - A mortgage in which the borrower receives a-below-market interest rate for a specified number of years (most often seven or 10) and then receives a new interest rate adjusted (within certain limits) to market conditions at that time. The lender sometimes has the option to call the loan due with 30 days notice at the end of seven or 10 years. Also called "Super Seven" or "Premier" mortgage.Underwriting - The decision whether to make a loan to a potential home buyer based on credit employment assets and other factors and the matching of this risk to an appropriate rate and term or loan amount.Usury - Interest charged in excess of the legal rate established by law.VA Loan - A long term low-or-no down payment loan guaranteed by the Department of Veterans Affairs. Restricted to individuals qualified by military service or other entitlements.VA Mortgage Funding Fee - A premium of up to 1-7/8 percent (depending on the size of the down payment) paid on a fixed rate loan. On a $75000 fixed-rate mortgage with no down payment this would amount to $1406 either paid at closing or added to the amount financed.Variable Rate Mortgage (VRM) - See adjustable rate mortgageVerification of Deposit (VOD) - A document signed by the borrower's financial institution verifying the status and balance of his/her financial accounts.Verification of Employment (VOE) - A document signed by the borrower's employer verifying his/her position and salary.Warehouse Fee - Many mortgage firms must borrow funds on a short term basis in order to originate loans which are to be sold later in the secondary mortgage market (or to investors). When the prime rate of interest is higher on short term loans than on mortgage loans the mortgage firm has an economic loss which is offset by charging a warehouse fee.Wraparound Mortgage - Results when an existing assumable loan is combined with a new loan resulting in an interest rate somewhere between the old rate and the current market rate. The payments are made to a second lender or the previous homeowner who then forwards the payments to the first lender after taking the additional amount off the top. Credit Federal Mon, 03 Oct 2011 00:00:00 CDT http://creditfederal.com/article/blogs/401/Auto-loan-lingo---Definitions-of-common-auto-loan-terminology%3A Auto loan lingo - Definitions of common auto loan terminology:Accrue - To accumulate interest charges.Amortization - The repayment of a loan by installments with regular payments to cover the principal and interest.Amortization Table - A table showing the amount of a principal and interest due at regular payment intervals and the corresponding unpaid balance of the loan after each payment.Amortization Term - The amount of time required to amortize the loan. The amortization term is expressed as a number of months. For example, for a 3-year fixed-rate loan, the amortization term is 36 months.Amount Financed - The amount of credit provided by a lender.Annual Percentage Rate (APR) - The Annual Percentage Rate (APR) is a yearly rate of interest that includes all of the fees and expenses paid to acquire the loan. A term used in the Truth-in-Lending Act to represent the percentage relationship of the total finance charge to the amount of the loan.Auto Test Drive - A hands-on research tool in which the potential buyer drives the auto to test for overall handling, feel, and performance.Base Price - The cost of an auto before a franchised dealer adds options. Includes the standard equipment and the manufacturer's warranty.Basis Point - An interest rate or yield expressed as 1/100 of one percent.Book Value - The value of a used auto in a specific market area. A recognized wholesale appraisal guidebook provides guidance on the auto's value at any given time. Examples of these guidebooks include Black Book, Kelley Blue Book, or NADA Guides.Branded Titles - A title labeled by a state titling agency with one of the following comments: Not Actual Mileage, True Mileage Unknown; Reconditioned, Salvage; Rebuilt, Flood, Manufactured Buyback; Lemon Law Buyback; Warranty Return; Exceeds Mechanical Limits; or Reconstructed Prior Collision.Cash Price - The price at which a seller offers to sell the property or service that is the subject of the transaction.Certificate of Title - A document issued by a state to provide evidence of motor vehicle ownership and any lien holder's security interest.Clear Title - A title that is free of liens or legal questions as to ownership of the property.Co-Buyer - An individual who purchases an auto jointly with a Buyer. This individual is jointly liable for repayment of the loan and has ownership rights in the property purchased.Co-Owner - A second owner of the auto.Co-Signer - An individual who agrees to pay the amount due (payment) and to perform all the agreements stated on the contract if the buyer fails to meet contractual obligations.Collateral - An asset (such as an auto) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.Credit Life Insurance - An insurance policy that may be purchased by the borrower to provide protection in the event of death. The insurance company may pay off the account according to the terms of the policy. This protects the borrower's estate from the liability of the debt.Dealer Invoice - The amount the dealer pays the manufacturer for an auto.Dealer Sticker Price - The total price of the auto. Dealer sticker price is also known as sticker price, or MSRP.Depreciation - A decline in the value of an auto over time.Destination Charge - The price added into the dealer invoice for moving the auto from the manufacturer to the dealer.Down Payment - The part of the purchase price that the buyer pays in cash and does not finance with a loan.Due Date - The date in a given month that a loan payment is due.Duplicate Title - The request by an applicant to reissue a Certificate of Title when the original has been lost or destroyed.Extended Warranty - A contract that covers specified breakdowns after a manufacturer's warranty expires. Manufacturers and independent companies sell extended warranties.Fair Market Value - The amount that a willing buyer would pay at a given point in time for the auto in a realistic transaction.Finance Charge - The cost of consumer credit expressed as a dollar amount.Fixed Rate Loan - A loan in which the interest rate remains constant throughout the life of a loan.Franchised Dealership - An automobile dealership authorized by a manufacturer to sell the manufacturer's products.Guarantee of Title (GOT) - A letter that guarantees delivery of a properly completed Certificate of Title.Guaranteed Automobile Protection (GAP) - A product that pays any remaining balance owed on a loan after payment of a total loss insurance claim.Installment Plan - A method of buying an auto on credit and making payments at regular intervals for a specific period of time.Lemon Law - A blanket term used to refer to various state laws that protect consumers against the purchase of an auto found to be persistently defective.Lien - A security interest in property, such as an auto, to secure the payment of an obligation.Loan-to-Value Ratio (LTV) - A ratio used to determine the amount of money a lender will loan based on the value of the auto. It is calculated by dividing the loan amount by the Retail Value or Manufacturer's Suggested Retail Price (MSRP).Manufacturer's Suggested Retail Price (MSRP) - The auto sales price suggested by the manufacturer.Maturity Date - The date on which the balance of the loan becomes due and payable.Options - Features that are added to a base model. For automobiles, examples include a sunroof, standard or automatic transmission, and bucket seats. Options are also referred to as add-ons.Preferred Placement Form - The form that is completed with an individual's financial information in order to submit and search for the best matched lender to the individual's specific credit needs.Principal - The amount of the auto loan without the interest factored in. In other words, the amount you are financing and will be paying interest on.Principal Balance - The unpaid balance of a loan.Rebate - A manufacturer's reduction to the price of an auto, which serves as an incentive to buyers. May also be referred to as a manufacturer's rebate or customer incentive.Regulation Z - A regulation that implements the Truth-In-Lending Act. It applies to all lenders and requires disclosure of credit terms.Retail Blue Book Value - The value of a used auto in a specific market area. See Book Value.Retail Price - The amount the buyer pays the seller for an auto.Service Contract - These are contracts that provide financial coverage to repair or replace any failure or breakdown within the limits of the policy.Sticker Price - Refer to Dealer Sticker Price.Title - The evidence one has of right to possession. See Certificate of Title.Total Sales Price - The total price of a credit purchase including any down payment equal to the total of payments plus any down payment.Trade-In - An auto exchanged for a credit amount on the purchase of a new auto.Trade-In Allowance - A credit amount given to a customer upon purchase of a new auto, in exchange for their old auto. This credit amount may reduce the cash price of the new purchase.Vehicle Identification Number (VIN) - An individual serial number assigned by the manufacturer to a motor vehicle. The alphanumeric number consists of seventeen (17) digits is located on the auto's dashboard and visible through the windshield.Warranty - A guarantee from the dealer or manufacturer that an auto will perform as expected or specified. Warranties usually cover specific mechanical problems for a specific number of miles or amount of time.Wholesale Book Value - The amount the dealership usually pays for a used auto in markets other than retail, typically auctions and broker transactions. Credit Federal Sun, 02 Oct 2011 00:00:00 CDT