Loan fees: Fees charged by a lender for taking out a loan. Fees are often expressed in “points”; one point represents 1% of the loan amount. Institutional credit agreements must be agreed and signed by all parties involved. In many cases, these loan agreements must also be filed and approved by the Securities and Exchange Commission (SEC). Bridge loan: A temporary loan, usually less than 12 months, granted to a borrower if the net proceeds from the sale of a previous home are not available for the purchase of a new home. It is expected that a bridge loan will be repaid with the net proceeds of the sale of the previous residence. Diyers: Repairs and/or additions to improve the condition of the permanent structure of the principal residence. Negative amortization: If your minimum payment for a debt is not sufficient to cover interest costs. When this happens, your debt balance will continue to increase despite your payments. Subordination agreement: An agreement between the owner of a charge against real estate that allows that claim to take a worse position than other charges against the property.
The University may, at its discretion, refuse to sign a subordination agreement. Biweekly mortgage: A mortgage that schedules payments every two weeks instead of the standard monthly payment. The 26 biweekly payments are half of a monthly payment. The result is that the mortgage is repaid earlier. Variable expenses: Expenses that are due each month but are not constant, such as credit card bills, groceries, utility bills and gasoline. Debt Counselling: A type of credit counselling that focuses specifically on helping people with debt problems. Instead of consolidating debt into a loan, debt counsel agencies negotiate with your creditors about pre-made agreements and spread your payments over a longer period of time to reduce the amount owed monthly. Consumers should be aware that there are also debt counselling agencies that are costly, inefficient and even detrimental to the customer`s creditworthiness (see Credit Repair). Financing fees: The total cost of using the loans. In addition to interest charges, financing fees may include other costs such as cash advance fees. 80-10-10 Loans: A combination of an 80% loan-to-value first mortgage, a 10% home equity loan and a 10% down payment. Loans can be used to eliminate the need for private mortgage insurance.
Pre-approval letter: A document from a lender or broker that estimates the amount a potential buyer could borrow based on current interest rates and a preliminary review of credit history. The letter is a non-binding agreement with a lender. A pre-approval letter can make it easier to buy a home and negotiate with sellers. It is better to have a pre-approval letter than an informal pre-qualification letter. Common property: property acquired by a married couple or one of the spouses of a married couple during the marriage, if it was not acquired as separate property by the two. Eligibility Certification: Form signed by the campus representative certifying that the applicant is eligible to participate in the program and the amount of the loan allocation. Also known as Form OLP-30. Loan Refusal Letter: A letter from the Loan Program Office rejecting a loan to a specific individual. Reasons for rejection may be credit history, lack of verifiable liquid funds, insufficient income, etc.
Debt collection: When a company sells your debt to an agency for a reduced amount in order to collect the amounts due. Credit card debt, medical bills, cell phone bills, utilities, library fees, and video store fees are often sold to collections. Debt collection agencies attempt to collect outstanding debts by contacting the borrower by phone and mail. Collection files can remain on your credit report for 7 years from the last 180-day late payment of the original debt. Your rights are set out in the Fair Debt Collection Practices Act. Risk Score: Another term for a credit score. (See Credit Score, FICO Score, Beacon Score and Empirica Score) Aging accounts: The process by which a creditor can reset an account registration with credit reference agencies. This is often used when cardholders request that late payment records be deleted because they are incorrect or due to a particular circumstance. However, replenishment can also be used illegally by debt collection agencies to make a debt account look much younger than it actually is. Some debt collection agencies use this tactic to prevent an account from expiring from your credit report in an attempt to get you to pay off the debt.
3-in-1 Credit Report: This type of report, also known as a merged credit report, includes your credit data from TransUnion, Equifax, and Experian in a side-by-side format for easy comparison. Soft Inquiry: A type of application that won`t hurt your credit score. Non-binding requests are recorded when a company accesses your credit information for purposes other than a loan application. Non-urgent requests include your request to see your own credit report and employment-related applications. This type of application is registered by credit reporting agencies, but usually does not appear on a credit report purchased by you or a business. Trust indenture: A security instrument used in place of a mortgage and transferred in trust to a third party that covers a particular property. It is used to secure the payment of a promissory note. Back-end ratio: The sum of your monthly mortgage payment and any other monthly debt (credit cards, car payments, student loans, etc.) divided by your monthly pre-tax income. Traditionally, lenders did not give loans to people who have increased this ratio beyond 36%, but they often do now. (See debt ratio) Application: A file on your credit report that appears every time you, one of your creditors or a potential creditor requests a copy of your credit report information. (See Software Survey, Promotional Survey, and Deep Survey).
Mortgage interest charges: A tax term for interest paid on a loan that is fully deductible up to certain limits when you enter income taxes. Closing costs: The amounts charged to a consumer when transferring ownership or taking out loans for a property. Closing costs include lender, security and escrow fees and are usually between 3 and 6% of the purchase price. Cardholder: The person to whom a credit card has been issued and/or authorized users. Revolving account: An account where your balance and monthly payment may fluctuate. Most credit cards are revolving accounts. Recurring expenses: Expenses that accumulate less than once a month, such as car club membership or insurance premiums that are due several times a year, or things like car registration or property taxes that are due once a year. Right of withdrawal: The right to terminate a contract and return to the parties the same position they held before the conclusion of the contract. For a refinancing operation, a borrower has three working days from the signing of the loan documents to cancel the loan without penalties. The right of withdrawal does not apply to purchase transactions….