Sunday, October 02, 2011
Conventional Mortgage Loan
: Any mortgage loan not guaranteed or insured by the government (typically through FHA or VA programs).
Thursday, August 19, 2010
Dictionary: Real Property
1. Rights, interests, and benefits inherent in the ownership of real estate, as distinguished from personal property; frequently thought of as a bundle of rights.
2. Real estate may be loosely defined as land (including air rights) and other properties that are permanently attached to land such as houses, fences, and landscaping.
3. The terms real property and Real Estate are often used interchangeably.
2. Real estate may be loosely defined as land (including air rights) and other properties that are permanently attached to land such as houses, fences, and landscaping.
3. The terms real property and Real Estate are often used interchangeably.
Tuesday, December 30, 2008
What is Alt-A, does it still exist?
If you ask 5 different mortgage persons what they are, you are likely to get 5 different answers. However, most will probably be pretty close, just a bit different perspective.
"A classification of mortgages where the risk profile falls between prime and subprime. The borrowers behind these mortgages will typically have clean credit histories, but the mortgage itself will generally have some issues that increase its risk profile. These issues include higher loan-to-value and debt-to-income ratios or inadequate documentation of the borrower's income."
As real estate professionals or consumers using the services of a real estate professional you will be exposed to an onslaught of acronyms. The Alt-A -- or Alternative A-Paper (also known as prime and conforming) mortgage type is not lacking. Falling in the middle of the three general categories (oh, don't forget the government categories FHA and VA :), these are famous for their acronyms which bleed over to the Prime and sub-prime arena as well:
1. SIVA -- Stated Income, Verified Assets -- also known as "Stated"
Your income is stated, your job (not income) is verified and so are your assets
2. SISA -- Stated Income, Stated Assets
Both your income and assets are stated, but not verified, job is verified
3. NIVA -- No Income, Verified Assets
No job verification but assets are verified
4. NINA -- No Income, No Assets
Neither your job nor your assets are verified (can't understand why this caused a problem in the mortgage market :)
5. No Ratio -- No Ratio
Your Debt-To-Income Ratio is not taken into consideration
6. No Doc-- No Documentation (clever with that one)
They don't care anything about, job or assets, just credit score
All of the above are credit score driven and were as investopedia said these mortgages were typically given to clients with clean credit histories.
Many, many lenders have temporarily or permanently shut down these type of loan programs and others were put out of business b/c of their use. We still have a few brave lenders out there willing to fund these loans. Since the secondary market (where lenders and bank sell these loans and replenish their funds) lost their appetite for these, the rates have begun to climb dramatically. Only time will tell whether these loans will come back. I believe they will, but we are not likely to see the near Prime rates that we once had.
The virtues, or lack thereof, of these programs can be discussed 'til the cows come home. Feel free to comment, but I hope this provides a little introduction as to what these products were/are.
How to Become a Million Dollar Real Estate Agent in Your First Year: What Smart Agents Need to Know Explained Simply
"A classification of mortgages where the risk profile falls between prime and subprime. The borrowers behind these mortgages will typically have clean credit histories, but the mortgage itself will generally have some issues that increase its risk profile. These issues include higher loan-to-value and debt-to-income ratios or inadequate documentation of the borrower's income."
As real estate professionals or consumers using the services of a real estate professional you will be exposed to an onslaught of acronyms. The Alt-A -- or Alternative A-Paper (also known as prime and conforming) mortgage type is not lacking. Falling in the middle of the three general categories (oh, don't forget the government categories FHA and VA :), these are famous for their acronyms which bleed over to the Prime and sub-prime arena as well:
1. SIVA -- Stated Income, Verified Assets -- also known as "Stated"
Your income is stated, your job (not income) is verified and so are your assets
2. SISA -- Stated Income, Stated Assets
Both your income and assets are stated, but not verified, job is verified
3. NIVA -- No Income, Verified Assets
No job verification but assets are verified
4. NINA -- No Income, No Assets
Neither your job nor your assets are verified (can't understand why this caused a problem in the mortgage market :)
5. No Ratio -- No Ratio
Your Debt-To-Income Ratio is not taken into consideration
6. No Doc-- No Documentation (clever with that one)
They don't care anything about, job or assets, just credit score
All of the above are credit score driven and were as investopedia said these mortgages were typically given to clients with clean credit histories.
Many, many lenders have temporarily or permanently shut down these type of loan programs and others were put out of business b/c of their use. We still have a few brave lenders out there willing to fund these loans. Since the secondary market (where lenders and bank sell these loans and replenish their funds) lost their appetite for these, the rates have begun to climb dramatically. Only time will tell whether these loans will come back. I believe they will, but we are not likely to see the near Prime rates that we once had.
The virtues, or lack thereof, of these programs can be discussed 'til the cows come home. Feel free to comment, but I hope this provides a little introduction as to what these products were/are.
How to Become a Million Dollar Real Estate Agent in Your First Year: What Smart Agents Need to Know Explained Simply
Tuesday, July 22, 2008
Estates & ownership interests defined
The law recognizes different sorts of interests, called estates, in real property. The type of estate is generally determined by the language of the deed, lease, or bill of sale through which the estate was acquired. Estates are distinguished by the varying property rights that vest in each, and that determine the duration and transferability of the various estates. A party enjoying an estate is called a "tenant."
Some important types of estates in land include:
Fee simple: An estate of indefinite duration, that can be freely transferred. The most common and perhaps most absolute type of estate, under which the tenant enjoys the greatest discretion over the disposition of the property.
Conditional Fee simple: An estate lasting forever as long as one or more conditions stipulated by the deed's grantor does not occur. If such a condition does occur, the property reverts to the grantor, or a remainder interest is passed on to a third party.
Fee tail: An estate which, upon the death of the tenant, is transferred to his heirs.
Life estate: An estate lasting for the natural life of the grantee, called a "life tenant." If a life estate can be sold, a sale does not change its duration, which is limited by the natural life of the original grantee.
Leasehold: An estate of limited duration, as set out in a contract, called a lease, between the party granted the leasehold, called the lessee, and another party, called the lessor, having a longer lived estate in the property.
For example, an apartment-dweller with a one year lease has a leasehold estate in her apartment. Lessees typically agree to pay a stated rent to the lessor.
A tenant enjoying an undivided estate in some property after the termination of some estate of limited duration, is said to have a "future interest."
Two important types of future interests are:
Reversion: A reversion arises when a tenant grants an estate of lesser maximum duration than his own. Ownership of the land returns to the original tenant when the grantee's estate expires. The original tenant's future interest is a reversion.
Remainder: A remainder arises when a tenant with a fee simple grants someone a life estate or conditional fee simple, and specifies a third party to whom the land goes when the life estate ends or the condition occurs. The third party is said to have a remainder. The third party may have a legal right to limit the life tenant's use of the land.
Estates may be held jointly as joint tenants with rights of survivorship or as tenants in common. The difference in these two types of joint ownership of an estate in land is basically the inheritability of the estate. In joint tenancy (sometimes called tenancy of the entirety when the tenants are married to each other) the surviving tenant (or tenants) become the sole owner (or owners) of the estate.
Nothing passes to the heirs of the deceased tenant. In some jurisdictions the magic words "with right of survivorship" must be used or the tenancy will assumed to be tenants in common. Tenants in common will have a heritable portion of the estate in proportion to their ownership interest which is presumed to be equal amongst tenants unless otherwise stated in the transfer deed.
Real property may be owned jointly with several tenants, through devices such as the condominium, housing cooperative, and building cooperative.
Some important types of estates in land include:
Fee simple: An estate of indefinite duration, that can be freely transferred. The most common and perhaps most absolute type of estate, under which the tenant enjoys the greatest discretion over the disposition of the property.
Conditional Fee simple: An estate lasting forever as long as one or more conditions stipulated by the deed's grantor does not occur. If such a condition does occur, the property reverts to the grantor, or a remainder interest is passed on to a third party.
Fee tail: An estate which, upon the death of the tenant, is transferred to his heirs.
Life estate: An estate lasting for the natural life of the grantee, called a "life tenant." If a life estate can be sold, a sale does not change its duration, which is limited by the natural life of the original grantee.
Leasehold: An estate of limited duration, as set out in a contract, called a lease, between the party granted the leasehold, called the lessee, and another party, called the lessor, having a longer lived estate in the property.
For example, an apartment-dweller with a one year lease has a leasehold estate in her apartment. Lessees typically agree to pay a stated rent to the lessor.
A tenant enjoying an undivided estate in some property after the termination of some estate of limited duration, is said to have a "future interest."
Two important types of future interests are:
Reversion: A reversion arises when a tenant grants an estate of lesser maximum duration than his own. Ownership of the land returns to the original tenant when the grantee's estate expires. The original tenant's future interest is a reversion.
Remainder: A remainder arises when a tenant with a fee simple grants someone a life estate or conditional fee simple, and specifies a third party to whom the land goes when the life estate ends or the condition occurs. The third party is said to have a remainder. The third party may have a legal right to limit the life tenant's use of the land.
Estates may be held jointly as joint tenants with rights of survivorship or as tenants in common. The difference in these two types of joint ownership of an estate in land is basically the inheritability of the estate. In joint tenancy (sometimes called tenancy of the entirety when the tenants are married to each other) the surviving tenant (or tenants) become the sole owner (or owners) of the estate.
Nothing passes to the heirs of the deceased tenant. In some jurisdictions the magic words "with right of survivorship" must be used or the tenancy will assumed to be tenants in common. Tenants in common will have a heritable portion of the estate in proportion to their ownership interest which is presumed to be equal amongst tenants unless otherwise stated in the transfer deed.
Real property may be owned jointly with several tenants, through devices such as the condominium, housing cooperative, and building cooperative.
Tuesday, January 15, 2008
Zoning ordinance
The division of land into residential, commercial, industrial and rural districts.
Zoning laws, which came about in the 1920s, serve to protect the public’s safety.
Zoning laws restrict the size of a lot, of building’s height and how a property can be used. In general, a residential zone is broken down into single-family, multifamily and mobile home districts.
Commercial areas are divided into retail, office and wholesale space. The government will not give you any money to compensate for a loss in your property’s value that may result from a zoning ordinance.
Zoning laws, which came about in the 1920s, serve to protect the public’s safety.
Zoning laws restrict the size of a lot, of building’s height and how a property can be used. In general, a residential zone is broken down into single-family, multifamily and mobile home districts.
Commercial areas are divided into retail, office and wholesale space. The government will not give you any money to compensate for a loss in your property’s value that may result from a zoning ordinance.
Wraparound mortgage
A type of financing where the seller carries the buyer's loan.
Wraparound mortgages are a creative, though rare, way to allow buyers to purchase a home without having to qualify for a loan or to pay closing costs.
The contract is made between the buyer and seller with the lender’s approval.
Here is how it works:
(1) the seller holds onto the existing mortgage
(2) the seller names the property’s selling price
(3) the seller offers the buyer a loan at a higher interest rate than the
existing mortgage
(4) the buyer pays the seller a fixed monthly
amount
(5) the seller uses part of this money towards the
existing loan and then pockets the difference
Unlike an installment sales contract, the buyer gets title (ownership) of the property at closing.
This type of financing is not common since most mortgages have a due-on-sale clause.
Wraparound mortgages are also called all-inclusive trust deeds.
Wraparound mortgages are a creative, though rare, way to allow buyers to purchase a home without having to qualify for a loan or to pay closing costs.
The contract is made between the buyer and seller with the lender’s approval.
Here is how it works:
(1) the seller holds onto the existing mortgage
(2) the seller names the property’s selling price
(3) the seller offers the buyer a loan at a higher interest rate than the
existing mortgage
(4) the buyer pays the seller a fixed monthly
amount
(5) the seller uses part of this money towards the
existing loan and then pockets the difference
Unlike an installment sales contract, the buyer gets title (ownership) of the property at closing.
This type of financing is not common since most mortgages have a due-on-sale clause.
Wraparound mortgages are also called all-inclusive trust deeds.
Verification of deposit (VOD)
A document from a bank vouching for the balance of a person's checking and savings accounts.
A lender may ask for a VOD when you are applying for a loan to make sure that you actually have the money stated on your loan application.
A lender may ask for a VOD when you are applying for a loan to make sure that you actually have the money stated on your loan application.
VA loan
A low-cost loan for U.S. veterans that is partially guaranteed by the Department of Veterans Affairs (VA).
If you are a veteran, you can get some VA loans without a down payment. You also can negotiate the interest rate with the lender. The loan amount cannot be more than the VA's appraisal. If it is, you have to pay the difference in cash.
You still need to pay closing costs, including appraisal and title insurance fees, as well as one-time funding fee for about 2% of the loan amount.
VA loans present high risk to a lender since the VA guarantees a portion of the loan amount- usually 25%. So, in case of foreclosure, the VA has two choices: pay the lender the loan's balance and take the property or pay the guaranteed amount and let the lender keep the property.
Usually, to be eligible for VA loan, you must have served at least 181 days of active duty or at least six years in the National Guard.
If you need information contact your regional VA office or call
1-800-827-1000.
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If you are a veteran, you can get some VA loans without a down payment. You also can negotiate the interest rate with the lender. The loan amount cannot be more than the VA's appraisal. If it is, you have to pay the difference in cash.
You still need to pay closing costs, including appraisal and title insurance fees, as well as one-time funding fee for about 2% of the loan amount.
VA loans present high risk to a lender since the VA guarantees a portion of the loan amount- usually 25%. So, in case of foreclosure, the VA has two choices: pay the lender the loan's balance and take the property or pay the guaranteed amount and let the lender keep the property.
Usually, to be eligible for VA loan, you must have served at least 181 days of active duty or at least six years in the National Guard.
If you need information contact your regional VA office or call
1-800-827-1000.
Yahoo! Sponsored Search connects businesses and customers online. Sign up and get a $25 credit.
Unsecured loan
A debt that is not backed by collateral.
Unsecured loans, like credit card debt, doctor bills and student loans, do not require you to sign an agreement pledging collateral, such as property, to secure the loan.
If you fail to pay an unsecured loan, the creditor can only take you to court to get their money. Mortgages and car loans, though, are secured loans. So, in case of default, the lender can take back the collateral-the property or the car-and sell them to pay off the loan.
Unsecured loans, like credit card debt, doctor bills and student loans, do not require you to sign an agreement pledging collateral, such as property, to secure the loan.
If you fail to pay an unsecured loan, the creditor can only take you to court to get their money. Mortgages and car loans, though, are secured loans. So, in case of default, the lender can take back the collateral-the property or the car-and sell them to pay off the loan.
Underwriting
Underwriting
A lender's process to evaluate whether or not to give a borrower a loan.
When lenders underwrite a loan, they look at your income, debt and credit history to see if you are a low-risk loan candidate.
Once your loan is approved and you meet all the lender's conditions, you can sign the final loan documents.
The lender will then fund the loan.
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A lender's process to evaluate whether or not to give a borrower a loan.
When lenders underwrite a loan, they look at your income, debt and credit history to see if you are a low-risk loan candidate.
Once your loan is approved and you meet all the lender's conditions, you can sign the final loan documents.
The lender will then fund the loan.
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