We have developed a working relationship with select lenders who offer competitive mortgage programs and provide excellent service. These lenders are very familiar with our homes, the home financing process and our requirements. Please contact a Preferred Lender at the neighborhood you are interested in and submit an application for loan pre-approval. Town of Scotia Company will request that a current loan pre-approval accompany any offer submitted. Please note that you are under no obligation to obtain a loan from our Preferred Lenders.
Annual Percentage Rate (APR): The rate of interest on a yearly basis, which includes charges on the mortgage loan and the interest payment.
Adjustable Rate Mortgage (ARM): A home loan program in which the interest rate and the monthly payment are adjusted at regular intervals according to the changes in a specified index.
Bridge loan: A short-term loan used to quickly effect a sale while pending more conventional real estate financing. While not popular, a bridge loan can be useful particularly for certain commercial real estate deals.
Credit Score: A numerical quantity reflecting a borrower’s credit worthiness. Used by lenders to find out the risk in approving a home loan.
Closing: The final step in the loan process when the seller transfers title to the buyer, the buyer signs the loan documents and receives the loan amount from the lender.
Closing Costs: Fees paid by the borrower at closing. These include charges for originating and processing the loan.
Closing Disclosure (CD): This will replace final Truth-In-Lending Disclosure (TIL) and final HUD-1.
Contingency: Any one of a number of common clauses added to real estate agreements that provide buyer or seller rights during various stages of a transaction.
Deed: An official and public document that establishes property ownership.
Default: Inability of borrower to make regular and consecutive payments on a loan.
Depreciation: The measure of loss in value of a home or property. Depreciation could be driven by poor economic factors or property damage.
Down Payment: The amount of cash, which the homebuyer pays towards the purchase price at closing.
Debt-to-income ratio (DTI): The ratio of the monthly debt to the pre-tax gross monthly income.
Escrow Account: Bank account into which lender deposits part of the monthly payments made by borrower. The deposits include payments towards property taxes, homeowners insurance and mortgage insurance.
Fixed Rate Mortgage: A home loan program on which the interest rate does not vary throughout the life of the loan.
FHA: Federal Housing Administration.
Housing Ratio: The ratio of the monthly housing costs to the pre-tax gross monthly income.
Intent To Proceed (ITP): No fee may be collected other than for a credit report before (ITP) is received.
Loan Estimate (LE): This will replace initial Truth-In-Lending Disclosure (TIL) and Good Faith Estimate (GFE).
Maturity: Typically applied to the term of a home loan or mortgage; the life span of a mortgage; for example, a 15-year loan matures in 15 years, the period of time in which the debt must be paid off.
Mortgagee and Mortgagor: The former is the lender offering the loan and the latter is the borrower.
Mortgage: A legal process by which you can take out a loan against your own property – residential or commercial. The same property is held as the security for the repayment of the debt.
Mortgage Note: It is your written promise to pay off the loan amount on certain terms and conditions. The note also mentions what the lender is likely to do if you default.
Payment Cap: For an adjustable rate mortgage, this is the maximum payment amount a buyer could ever be expected to pay per month.
Pre-qualification: The process in which a homebuyer may find out how much of a home loan he or she would be approved for with a lender; gives many buyers more flexibility when shopping for a home.
Private Mortgage Insurance: Insurance policy offered by an insurance company in order to protect the lender from losses if the borrower defaults on his payments.
Rate lock/Lock-in: A written commitment, which guarantees a fixed rate on your loan for a certain time period before closing. Usually, rates are locked for 30, 45 or 90 days till the closing date.
Short sale: Useful tool for lenders and homeowners when foreclosure could be a worst-case scenario. In a real estate short-sale lenders give homeowners permission to discount the home value (an outstanding loan balance) to affect a quick sale, thereby averting foreclosure.
Title: The official document used in the real estate industry that specifies at any one time that owns a piece of property.
Title Company: A title company typically handles all tasks associated with the property title, including insurance and search.
Title insurance: Insurance taken out on the property title that protects both borrower and lender in the event of a title dispute.
Total Interest Percentage (TIP): The total amount of interest paid over the loan term as a percentage of the loan amount.
Underwriter: The company or service that evaluates a borrower’s creditworthiness prior to loan and mortgage approval.