Mortgage Glossary
There are a lot of unfamiliar terms that get tossed around during the mortgage process. But don't worry, we've put together this glossary to help you get a better grasp of any terms that may be less than clear.
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Interest Accrual Rate
The rate at which interest accrues on a mortgage. Usually, it is also the rate used to calculate the monthly payments.
Interest Rate
The cost of borrowing a lender's money. Interest takes into account the risk and cost to the lender for a loan. The interest rate on a fixed rate mortgage depends on the going market rate and how many discount points you pay up-front. An adjustable rate mortgage's interest is a variable rate made up of the index and the lender's margin.
Interest Rate Buy-down Plan
An arrangement where the property seller, borrower or other party deposits money to an account so that it can be released each month to reduce the borrower's interest rate or monthly payments during a specified period of a loan.
Interest Rate Ceiling
The maximum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage loan note.
Interest Rate Floor
The minimum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage loan note.
Investment Property
A property that is not occupied by the owner.
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Jeopardy
An element of risk or danger.
Joint Account
A credit account held by two or more people so that all can use the account and all assume legal responsibility to repay.
Joint and Several Liability
A situation whereby a creditor can demand full repayment from any and all borrowers. Each borrower is liable for the full debt, not just the prorated share.
Joint Tenancy
A form of co-ownership that gives each tenant equal undivided interest and equal rights in the property, including the right of survivorship.
Joint Venture
An agreement between two or more parties who invest in a property or business.
Judgment
A decree made by a court of law. In judgments that require the repayment of a debt, the court may place a lien against the debtor's real property as collateral for the judgment's creditor.
Judgment Lien
A lien on the property of a debtor resulting from a judgment.
Judgment Search Fee
A fee charged by a title company to search the public record for judgements filed against a property owner or borrower that could ultimately encumber the title of the property. For our comparison purposes, a judgement search fee is considered to be a third party fee. Some lenders will include this fee in the title insurance cost.
Judicial Foreclosure
Type of foreclosure proceeding used in some mortgage states that is handled like a civil lawsuit and conducted entirely under the direction of a court.