Mortgage Definitions (Q - S)

Qualifying Ratios
Calculations used to determine if a borrower can quality for a mortgage. They consist of two separtate calculations; a housing expense as a percent of income ratio and toal debt obligations as a percent of income ratio

Rate Lock
A commitment issued by a lender to a borrower or another mortgage originator guaranteeing a specified interest rate and lender costs for a specified period of time

Realtor
A real estate broker or an associate holding active membership in a local real estate board affiliated with the National Association of Realtors

Real Estate Agent
A person licensed to negtiate and transact the sale of real estate on behalf of the property owner

Real Estate Settlement Procedures Act (RESPA)
A consumer protection law that requires lenders to give borrowers advance notice of closing costs

Recission
The cancellation of an contract. With respect to mortgage refinancing, the law that gives the homeowner three days to cancel a contract in some cases once it is signed if the transaction uses equity in the home as security

Recording Fees
Money paid to the lender for recourding a home sale with the local authorities, thereby making it part of the public records

Refinance
Obtaining a new mortgage loan on a property already owned often to replace existing loans on the property

Renegotiable Rate Mortgage
A loan in which the interst rate is adjusted periodically. See adjustable rate mortgage

RESPA
Short for the Real Estate Settlement Procedures Act RESPA is federal law that allows consumners to review information on known or estimated settlement costs once after application and once proir to or at settlement. The law requires lenders to furnish the information after apllication only

Revers Annuity Mortgage (RAM)
A form of mortgage in which the lender mkaes periodic payments to the borrower using the borrower's equity in the home as collateral for the repayment of the loan

Revolving Liability
A credit arrangement such as a credit card, that allows a customer to borrow against a preapproved line of credit when purchasing good and services

Satisfaction Of Mortgage
The document issued by the mortgagee when the mortgage loan is paid in full. Also call a "release of mortgage."

Second Mortgage
A mortgage made subsequent to antoher mortgage and subordinate to the first one

Secondary Mortgage Market
The place where primary mortgage lenders sell the mortgages they make to obtain more funds to orifinate more new loans. It provides liquidity for the lenders

Security
The property that will be pldeged as collateral for a loan

Seller Carry Back
An agreement in which the owner of a proerty provides financing, often in comination with assumable mortgage. See owner fiancing

Servicer
An organization that collects principal an dinterest payments for m borrowers and manages borrower escrow accounts. The servicer often services mortgages that have been purchased by an investor in the secondary mortgage market

Servicing
All the steps and operations a lender performs to keep a loan in good standing, such as collection payments, payment of taxes, insurance, property inspections and the like

Settlement/Settlement Costs
See closing/closing costs

Shared Appreciation MOrtgage (SAM)
A mortgage in which a borrowe receives a below market interst rate in return for which the lender (or another investor such as a family member or other partner) receives a portion of the future appreciation in the value of the property. May also aplly to mortgage where the borrowers shares the monthly principal and interst payments with another pary in exchange for part of the appreciation

Simple Interst
Interst which is computed only on the priciple balance

Standard Payment Calculation
The method used to determine the monthly payment required to repay the remaining balance of a mortgage in substanially eqqual intallments over the remaining term of the mortgage at the current interest rate

Step Rate Mortgage
A mortgage tha allows for the intersts rate to increase according to specified schedule(seven years) resulting in increased payments as well. At the end of the specified period, the reate and payments will remain constant for the remainder of the loan

Survey
A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to known points, its dimensions, and the location and dimensions of any buildings

Sweat Equity
Equity created by a purchaser performing work on a property being purchased