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A report made by a qualified person setting forth an opinion or estimate of property value. The term also refers to the process by which this estimate is obtained.


An increase in the value of property due to either a positive improvement of real estate in the area or the elimination of negative factors. Commonly used to describe an increase in value through inflation.

Annual Percentage Rate (APR)

The cost of credit on a yearly basis, expressed as a percentage. The APR includes the prepaid interest rate, discount points, fees, and other credit charges that the borrower is required to pay, and is therefore a more complete measure of a loan’s cost than the interest rate alone. The loan’s interest rate, not its APR, is used to calculate the monthly principal and interest payment.

Biweekly Mortgage

A mortgage with payments due every two weeks, totaling 26 payments a year.


The closing includes the delivery of a deed, the signing of loan documentation, and the disbursement of funds necessary to complete the sale or refinance loan transaction. Also known as “settlement.”

Closing Costs

Money paid by the borrower in connection with the closing of a mortgage loan. This could involve an origination charge, discount points, and fees for required third-party services, appraisal, escrow, title insurance, taxes, and government recording fees.

Conventional Mortgage

A mortgage not obtained under a government program (such as FHA or VA).


A loss of value in real property brought about by age, physical deterioration, functional, or economic obsolescence

Down Payment

Money paid to make up the difference between the purchase price and the mortgage amount.

Earnest Money

Funds delivered to the seller or an escrow agency by the purchaser with the purchase agreement as evidence of good faith.

Escrow Agent

The person or organization having a responsibility to both the buyer and seller (or lender and borrower) to see that the terms of the purchase/sale (or loan) are carried out. Also called escrow company.


The difference between the fair market value (appraised value) of your home and your outstanding mortgage balances and other liens.

Federal Housing Administration (FHA)

The federal agency in the Department of Housing and Urban Development (HUD) that insures residential mortgages

Gift Letter

A written explanation signed by the individual giving the gift stating, "This is a gift, and there is no obligation expressed or implied to repay this sum at any time." (often used on purchases where the down payment or portion of the down payment is coming from a family member)

Homeowners' Association Dues

The fees imposed by a condominium or homeowners' association for maintenance of common areas.

Index/Index Rate

A published interest rate, such as the prime rate, LIBOR, T-Bill rate, or the 11th District COFI. Lenders use indexes to establish interest rates charged on mortgage ARMs, a predetermined margin is added to the index to compute the interest rate adjustment


Amount of money paid for the use of funds provided by another party. Also a right, share, or title in property.

Interest Rate

The percentage of an amount of money that is paid for its use for a specified time.

Interest Rate Cap

A provision of an ARM limiting how much the interest rate may increase per adjustment period. See also Lifetime Cap.

Interest Rate Floor

On a floating-rate loan or line of credit, the lowest the interest rate may go.

Joint Tenancy

An undivided interest in property, taken by two or more joint tenants. Upon the death of a joint tenant, the interest passes to the surviving joint tenants, rather than to the heirs of the deceased.

Lender Paid Mortgage Insurance (LPMI)

Mortgage insurance with its cost included in the interest rate. Although the interest rate is slightly higher with LPMI, this option usually results in potential tax deduction. (Consult your tax advisor).

Loan- to-Value (LTV)

The ratio of the amount of a potential mortgage to the value of the property it is intended to finance, expressed as a percentage


The set percentage the lender adds to the index rate to determine the interest rate of an ARM.

Market Value

The most probable price that a ready, willing, and able buyer would pay and a willing seller would accept, assuming each is fully informed and under no pressure to act. The market value may be different from the price for which a property can actually be sold at a given time (market price).

Mortgage Insurance Premium (MIP)

The consideration a mortgagor (borrower) pays to either the FHA or a private insurer for mortgage insurance.


A number or other identifier that permanently identifies a registered residential loan originator. The Unique Identifier is assigned by protocols established by the Nationwide Mortgage Licensing System and Registry and other agencies. It also may be referred to as a Unique ID.

PITI (Principal, Interest, Taxes, and Insurance)

Principal, interest, taxes and insurance as the total monthly mortgage payment.

Prepayment Penalty

A provision in the lending contract that states the borrower will pay a fee in the event the borrower pays off the loan earlier than was originally agreed.

Private Mortgage Insurance (PMI)

Insurance written by a private company protecting the mortgage lender against loss resulting from a mortgage default and typically required when putting less than a 20% down payment or having less than 20% equity.

Purchase Contract (Agreement/Offer)

An agreement between a buyer and seller of real property, setting forth the price and terms of the sale. Also known as a “sales contract.”

Quitclaim Deed

A deed relinquishing all interest, title, or claim an owner has in a property. A quitclaim deed implies no warranty.

Rate Lock

A lock period refers to the amount of time prior to closing that you can secure an interest rate for your loan. Lock periods typically range from 30 days to 90 days. Typically, the longer the lock period, the more you pay in points or interest (higher the rate).


The repayment of a debt from the proceeds of a new loan using the same property as security.

Rescission Period

Under federal law, certain loan transactions secured by your home are subject to a rescission, or cancellation, period. Following receipt of all required disclosures and consummation of the contract, each owner of the property has up to three full business days to cancel the transaction. The right to cancel does not apply to loans made to purchase, construct, or acquire a primary residence, or to transactions secured by a secondary residence, vacation home, or rental property.

Second Home (Vacation Home, Weekend Home)

A residence other than the borrower's primary residence which the borrower intends to occupy for a portion of each year. The residence must be occupiable year-round.

Tax Lien

A claim against property for unpaid taxes


The time limit within which a loan must be repaid.

Title Insurance

An insurance policy that protects a lender and/or homebuyer (only if homebuyer purchases a separate policy, called owner's coverage) against any loss resulting from a title error or dispute. On a refinance, if the property has had a recent title insurance policy, a homeowner may sometimes be eligible for a reduced rate on the title insurance (also known as the reissue or refinance rate).

Transfer Tax

State or local tax payable when the title passes from one owner to another.


The lender’s process of deciding whether to make a loan to a potential borrower based on credit, employment, assets, property value and other factors, and the matching of this risk to an appropriate rate, term, and loan amount.

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    Woodland Hills, CA 91367
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