An escrow account is a financial arrangement where a third party holds and regulates payment of funds required for two parties involved in a transaction. In real estate, it typically manages property tax, homeowner's insurance, and mortgage insurance payments.
An FHA Mortgage Loan is a mortgage loan insured by the Federal Housing Administration (FHA). Section 203(b) is the most popular program under FHA.
A guaranteed mortgage is a type of home loan in which a third-party organization guarantees repayment to the lender in case the borrower defaults. These guarantees are often provided by government agencies, enhancing the chances of loan approval and potentially offering favorable terms to the borrower.
The Loan-to-Value Ratio (LTV) is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. It is critical in determining the risk of a loan, especially in mortgage lending.
Insurance typically required by lenders for borrowers with a down payment less than 20%, indemnifying the lender in the case of foreclosure.
A Mortgage Insurance Policy is designed to protect lenders and borrowers in mortgage agreements by covering payments in certain situations, such as default or borrower death.
Mortgage Insurance Premium (MIP) is the fee paid by a mortgagor to obtain mortgage insurance on a mortgage loan. This fee can be collected as a lump sum at loan closing, as part of the monthly payment, or both.
Private Mortgage Insurance (PMI) is a type of insurance required primarily for homebuyers who obtain conventional loans with a down payment of less than 20% of the home's purchase price. It protects the lender in case the borrower defaults.
Insurance on conventional loans, provided by private insurance companies to protect lenders against loss if a borrower defaults on their loan.
