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Glossary

Conveyance

The transfer of a property title from one person to another. There are many ways to do a conveyance — with the title agent or attorney, for example.

Corporate Relocation

An arrangement through which an employer moves an employee to another area of the country. Typically, as part of the relocation agreement, the employer pays a portion of moving and mortgage-related expenses. Many companies specialize in providing complete corporate relocation services.

Credit

Your purchase of the present use of money with the promise to pay it back in an agreed-upon time period, and at a cost usually defined by an interest rate.

Credit Bureau

A company that provides information to a lender about your creditworthiness, based on your credit history. The three major national credit bureaus are Equifax, Experian, and Trans Union. Also called Consumer Credit Reporting Agency or Credit Repository.

Credit History

Your debt and repayment history on loans and credit cards.

Credit Rating

See credit score.

Credit Report

A credit bureau's detailed report of your credit history.

Credit Repository

See Credit Bureau.

Credit Score

A number, based on the analysis of your credit report, used by the lender to determine your ability to qualify for a mortgage loan. Credit scores usually range from 300 to 900 — the higher the number, the better to qualify for a loan. Also known as FICO score.

Current Rate (Initial)

The interest rate you see when you shop for a mortgage. Rates fluctuate with market conditions. The rate you see on a web site is an estimated rate and is subject to change.

Debt

Money owed to another and due to be paid according to a predetermined agreement. Mortgage lenders carefully review your debt to help determine their loan decision. Also referred to as liability.

Debt-to-Income Ratio

Your total monthly debt, divided by gross monthly income and shown as a percentage. Total monthly debt includes monthly mortgage payments as well as student loans, car loans, and credit card payments. Example of an ideal debt-to-income ratio: If debt = ($XXX) and gross monthly income = ($XXX), the Debt-to-Income Ratio equals ($XXX) divided by ($XXX), or (XX%). This indicates that you are well qualified to pay back the mortgage loan. Generally, lenders want a debt-to-income ratio of 36% or under, although some lenders will accept ratios up to 50% if you have a good credit rating. Also called the back-end ratio or total debt ratio.

Default

Failure to make payments as required by the terms of the mortgage loan. Default puts you at risk of losing the property.

Delinquency

When you don't submit payments before the due date and grace period have passed.

Depreciation

A decrease in the value of a property due to negative events such as unfavorable changes in market conditions, or damage to the property.