Glossary
Q
Qualifying Ratio -
The ratio of the borrower's fixed monthly expenses to his gross monthly
income. Ratios are expressed as two numbers like 28/36 where 28 would be
the Front-End Ratio and 36 would be the Back-End Ratio.
The Front-End Ratio is the percentage of a borrower's gross monthly income
(before income taxes) that would cover the cost of PITI (Mortgage Principal
Payment + Mortgage Interest Payment + Property Taxes + Homeowners
Insurance). In the case of a 28% Front-End Ratio a borrower could qualify If the
proposed monthly PITI payments were 28% or less than the borrower's gross
monthly income.
The Back-End Ratio is the percentage of a borrower's gross monthly income
that would cover the cost of PITI plus any other monthly debt payments like car
or personal loans and credit card debt.
Please note that qualifying ratios are only a rough guideline in determining a
potential borrower's credit-worthiness. Many factors such as excellent or poor
credit history, amount of down payment, and size of loan will influence the
decision to approve or disapprove a particular loan. Moving.com urges all
borrowers to discuss their particular situation with a qualified lender regardless
of the outcome of any self-qualification exercise.
Quitclaim Deed -
A deed that transfers, without warranty, whatever interest or title a grantor may
have at the time the conveyance is made.
R
Rate Lock -
A commitment issued by a lender to a borrower or other mortgage originator
guaranteeing a specified interest rate for a specified period of time at a specific
cost.
Real Estate -
A portion of the earth's surface extending downward to the center to the earth
and upward into space, including all things permanently attached thereto by
nature or man and all legal rights therein.
Real Estate Agent -
A person licensed to negotiate and transact the sale of real estate.
Real Estate Settlement Procedures Act (RESPA) -
An act requiring the revelation of all costs involved in a real estate closing to all
participants.
Real property -
See real estate.
Realtor -
A real estate agent, broker, or associate that holds an active membership in a
local real estate board that is affiliated with the National Association of
Realtors.
Recast -
To redesign an existing loan balance into a new loan for the same period or
longer, to reduce payments and help a distressed borrower.
Reconciliation -
Determining the final estimate of value by weighing the results of the various
approaches in an appraisal.
Reconveyance Clause -
The clause in a trust deed that gives the title back to the borrower when the loan
is paid in full.
Recording -
The formal filing of documents affecting a property's title.
Regulation Z -
A truth-in-lending provision that requires lenders to reveal the actual costs of
borrowing.
Refinancing -
The process of paying off one loan with the proceeds from a new loan, using
the same property as security.
Rent-Loss Insurance -
Insurance that protects a landlord against loss of rent or rental value due to fire
or other casualty, resulting in the tenant being excused from paying rent.
Repayment Plan -
An agreement between a lender and a delinquent borrower regarding
mortgage payments, in which the borrower agrees to make additional
payments to pay down past due amounts while still making scheduled
payments.
Residual Qualifying -
Under a VA loan, using specified housing expenses to qualify for a loan
payment.
Restrictions -
Rules imposed on the use of real estate in an effort to preserve property values.
Reverse Annuity Mortgage (RAM) -
A system developed for an elderly property owner in which regular monthly
payments can be received from a lender. When the total reaches a
pre-determined amount, the owner begins repaying the loan or sells the
property.
Revolving Debt -
A credit arrangement that allows a customer to borrow against a pre-approved
line of credit used to purchase goods and services. The borrower is
responsible for the actual amount borrowed plus any interest due.
Right-of-First Refusal -
A provision that states that a property to be first offered to a specific person
before it can be offered for sale or lease to other parties.
Rollover Loan -
A loan that /includes a call date earlier than its normal amortization period.
Rule of 78 -
Calculates proportionate amount of interest due on a loan being paid in full
before its maturity.
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| For additional questions please contact me at 281-650-7592 or via e-mail at kowens@closingjust4you.com |
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