A house is a house is a house

Residential Mortgages

Residential -- designed for people to live in. Providing accommodations in addition to other services (a residential college). Occupied by private houses (quieter traffic in residential areas). Concerning or relating to a residence (Land has been diverted from residential use).

Mortgages -- a charging of real property by a personal debtor to a creditor as security for a debt on the condition that it shall be returned on payments of the debt within a certain period. A deed effecting a mortgage. A loan obtained through conveyance of property as security. (I put down a hundred thousand in cash and took out a mortgage for the rest). Expose to future risk or constraint for the sake of immediate advantage. Latin: dead pledge.

Title theory and lien theory

Title -- a right or claim to the ownership of property or to a rank or throne. A local family had title to the property. The buyer acquires a good title to the merchandise. A name that described someones position or job. Lesse assumed the title of director general. Latin: inscription title).

Theory -- an idea used to account for a situation or justify a course of action. My theory would be that the place has been seriously mismanaged. A set of principles on which the practice of an activity is based. A theory of education. Music theory. Title theory. Lien theory. A system of ideas intended to explain something esp. one based on general principles independent of the thing to be explained. Darwin's theory of evolution. Latin: contemplation, speculation.

Lien -- a right to keep possession of property belonging to another person until a debt owed by that person is discharged. Latin: to bind, bond.

Mortgage Law

Mortgage -- charging of real property by a personal debtor to a creditor as security for a debt on the condition that it shall be returned on payments of the debt within a certain period. A loan obtained through conveyance of real property as security.

Law -- the system of rules that a particular country recognized as regulating the actions of its members and may enforce by the imposition of penalties. They were taken to court for breaking the law. A license is required by law. Law enforcement. An individual rule as part of such a system. An initiative to tighten up the laws on pornography.

Creditor -- debtor owes creditor money/Debtor -- owes a sum of money.

Security -- a thing deposited or pledged as a guarantee of the fulfillment of an undertaking or the repayment of a loan to be forfeited in case of default -- a certificate attesting credit, the ownership of stocks or bonds, or the right to ownership connected with tradable derivatives. A private police force that guards a building. The state of being free from danger or threat. The system is designed to provide maximum security against toxic spills. Job security.  A matter of national security.

Mortgage law -- Lien Theory
Florida. Debtor retains title. Lender protected with lien. Lender forecloses property when buyer defaults.

Mortgage law -- Title Theory
Not Florida. Mortgage deed to lender or deed of trust to trustee. Debtor defaults lender takes possession. Debtor holds equitable title. Lender gives debtor title once property is paid.

Lien = foreclosure = title to buyer = lender holds lien, lien turns into foreclosure = lien in Florida

Title = deed and trust to lender and trustee = title conveyed when debt paid = debtor has equitable title not true title during debt.

Concepts with Loan Instruments

Concept -- Latin: thought from the mind, an idea to sell a commidity, a general notion, a plan or intention.

Loan -- a thing borrowed that is expected to be paid back with interest. Borrowers can take out a loan for $84,000. An act of lending something to someone. She offered to buy him dinner in return for the loan of the car. Borrow. The word processor was loaned to use by the theater. He knew Rob would not loan him money. Origin: denoting a gift from a superior.

Instrument -- a thing used in pursuing an aim or policy. Drama as an instrument of learning. A person who is exploited or made use of. He was a mere instrument acting under coercion. A formal document, esp. a legal one. Execution involves signature and unconditional delivery of the instrument. Latin: equipment, implement.

Residential mortgages -- loan instruments -- mortgage loans

Promissory note -- promise to pay back loan

Mortgage -- creates a lien

Promissory note -- used in all mortgages through a bond or mortgage note.

Note -- legal instrument that represents the debt. A promissory note to pay the debt back. Pay upon the terms of the loan. The debtor owes so the debtor signs the promises. Debtor signs the total amount owed, rate of interest, how you're going to pay back, how long time to pay back. Sign the note debtor. Penalties signed to on note.

Call the loan -- lender demands the loan if violated.

No record of note. Just borrower knows it's there and signs it and lender knows it's there.

Mortgage Features and Provisions of Mortgage Clauses

Mortgage: pretty much charging a real property on your credit card -- turning your real property into a lien the lender owns until you pay back. Then the property is yours and your debt is paid off!

Features: a distinctive attribute of something. Safety features like dual airbags. A newspaper of magazine article or a broadcast program dedicated to the treatment of a particular topic. A feature on Detroit's downtown fishery.

Provisions: the action of providing or supplying something for use. New contracts for the provisions of services.  A LEGAL CONDITION REQUIRED IN A LEGAL DOCUMENT. "A KEY PROVISION IN CIVIL RIGHTS LAW." AN APPRAISAL UNDER THE PROVISIONS OF THE NATIONAL HOUSING ACT. SUPPLY WITH FOOD, DRINK, OR EQUIPMENT. CIVILIAN CONTRACTORS WERE RESPONSIBLE FOR PROVISIONING THE ARMIES. SET ASIDE AN AMOUNT IN AN ORGANIZATION'S ACCOUNTS FOR A KNOWN LIABILITY. FINANCIAL INSTITUTIONS HAVE TO PROVISION AGAINST LOAN LOSSES. Provisions are part of the law.

Mortgage: i borrow money from you you give me a residence or a place of business and work. maybe even a vacation property or a parcel, maybe a tract home or a boutique space. I'm glad I don't own a boutique. I would be brainless. Well half less brainy as I am now.

Clause: a particular and separate article, stipulation, or proviso in a treaty, bill or contract. A unit of grammatical organization next below the sentence in rank and in traditional grammar said to consist of a subject and predicate. Lol - clause.

Mortgage is instrument that pledges property as collateral for debt. Mortgage is the legal document that secures the lien. Property ensures recovery for loan. Hypothecation is surrendering property as security for payment but not surrendering possession. Hypothecating is pledging money to a purpose. A mortgage hypothecation is pledging to pay the money back you borrowed or give the property back you borrowed for. You can't have a mortgage while speaking. A mortgage is a recorded piece of property instrument. A mortgage is recorded to maintain priority and also recorded to establish constructive notice. Two people in a mortgage: the borrower, debtor, mortgagor, and the lender, bank, mortgagee, creditor. Mortgagor owns the property until the property is paid and the mortgagee owns the mortgage until the satisfaction of mortgage. The mortgagor is bound by the terms of the mortgage. A mortgage is an investment or personal property for the mortgagee. As such, personal property can be traded or sold. A mortgagor needs to borrow money to complete a purchase. A lender is capable of providing a loan. Mortgagee owns the mortgage and the mortgagor owns the encumbered property. Mortgagor gives mortgage to mortgagee as security for the debt along with a promise note to pay the mortgage back including payments periods, amount indebted, and so forth. Lenders MUST provide mortgagors payoff information, it's the law! (Payoff is satisfaction of mortgage, no more money is owed, no more lien on the property, no more payment periods to fulfill).  The mortgagee gives the mortgagor an unpaid principal amount, an interest rate amount, and a per dium rate that shows the estoppel certification, how much payment is due to the mortgagee by the mortgagor in question. Within 60 days of the last payment that fulfills the mortgage paid off and debt satisfied, the mortgagee whether bank or person writes into the state and into the mortgagor that the debt has been satisfied and issues a satisfaction of mortgage document. This make the fulfillment of the mortgage official and the promissory note no longer valid. It's like starting a mortgage requires a lender and borrower and a property, and a promissory note and a mortgage and legal terms and conditions, and satisfaction dates and interest rates and monthly payments and principal amount and maintenance of property and insurance and hazard insurance, and once the principal and interest is paid the borrower becomes the full owner and continues insurance and flood if necessary and hazard insurance and grounds upkeep, etc. A lot goes into a mortgage! Slices of a pie!

A lien starts on a property when a mortgage loan is recorded with government. A mortgage loan is voluntary by the property. Priority of mortgage:
Most important
First mortgage (senior mortgage) > second mortgage (junior mortgage) > third mortgage. All mortgages are liens. Mortgagee owns the mortgage owns the lien. Mortgagor owns the property owes the mortgage. A junior mortgage on a senior mortgage is loan for the same property. Mortgagee can reduce subordination agreement. Second mortgage can ask permission for subordination agreement and first mortgagee can agree or disagree. A mortgage must have a valid contract to be official. The contract contains a mortgagor and a mortgagee. I promise to pay you back principal and interest: promise note. Mortgagor also responsible for paying late fees (like Blockbuster) escrow charges, and prepayment charges. Taxes, assessments, fines, and community association fees take priority over superior mortgages. Promises to have extended property coverage property insurance against damage from fire or hazard. Borrower must get the insurance or the lender will do it for him. Property insurance fee always responsibility of borrower. Encumbered property becomes primary residence for no less than a year. The lender can inspect that the borrower is maintaining the property and preventing waste. Whatever is with the mortgage has to stay with the mortgage and cannot be sold separate. You can't sell a shed behind your house if it is collateral for the mortgage you borrowed. A prepayment clause allows the borrower to pay off the debt to the lender before the period of maturity without paying a prepayment penalty. Prepayment is allowed unless otherwise stated in Florida. A prepayment clause is included in FHA and VA mortgages on real property. A clause usually states the terms a mortgage can be prepaid. A mortgagee can put a prepayment penalty clause in the contract/mortgage instrument. Acceleration clause is the capable demand of the mortgagee to collect full payment of mortgagor. A failed acceleration payment results in default to foreclosure. Debt has to be delinquent before foreclosure can start. There would be no foreclosure without acceleration clause. All a mortgagee would be able to do is sue the mortgagor for lack of payment on those previously missed. If you are defaulting and can't find the money in 30 days you go into foreclosure. The lender gives you 30 days to pay, from the time of the notice of acceleration. Post 30 days (almost a full month) in unpaid results in borrower default. Fannie Mae Freddie Mac provide cures for defaults. After your property is in default you have the right to reinstate/ after you get the notice of acceleration you can reinstate your property. Reinstatement before foreclosure after all interest, late payments, maybe even payment in full and expenses to default, accelerate, insurance, property taxes, paid in full. You can get your property back once you lose it. If any or all of a property is sold subject to mortgage agreement a due on sale clause can affect you because the lender can demand all the money you made on the property you sold immediately, even rush the mortgage to make you pay in full including interest. This prevents anyone else to sell the property than the mortgagee. This clause makes sure that the lender controls the loan. A defeasance clause defeats the prior action on the loan once it is paid in full. Property conveyed to lender in mortgage deed in title theory. Title theory defeasance defeats the lender with the titles and gives the title to the borrower. In lien theory the lender get a lien on the property stating what is owned. Lien is lifted when money is returned to lender. Defeasance clause defeats lien once loan paid off. Defeasance clause transfers title to borrower once loan paid off. Lol. Get a loan and defeat it! Defeat it and get a satisfaction of mortgage. Defeat your mortgage and own your property outright! Satisfaction of mortgage is constructive notice you have paid. Cash payment or down payment is the amount of cash the purchaser will pay at the down payment. Any down payment money (earnest) is put toward the closing. LTV is the appraisal borrowed relationship. Lenders use LTV as measure of financial risk. A high LTV is a high risk. Lender has not much cushion in a high LTV safety and buyer default. Range 60-90%. LTV is loan divided by value Lloan tdivided Vvalue = ratio. Appraisal in LTV is purchase price. So $50,000 cash down payment on $200,000 house is $200,000 loan / $250,000 purchase price. 80%. Also, a $5,000 down payment on $50,000 is $50,000 loan / $55,000 purchase price = 90% LTV. And a $500,000 down payment on $2,000,000 loan is 80%. So $3,000 down on a $130,000 is $130,000 / $133,000 = 97%. :(. So $100,000 on $110,000 is $110,000 / $210,000 = 52%. So that's bad. So $175,000 down on $110,000 loan is $110,000 / $285,000 = 38% weird. So $50,000 down on $500,000 loan is 90%.

Equity, the amount you own supersedes your mortgage. Market goes up so does your equity. Bank doesn't get more than mortgage but maybe you can. Your excess is your equity. Down payment is first stake of equity in the property. Equity increase less worries about the mortgagee losing money.  Current market value - debt = equity. So if equity means that you own more than your house, financially, than to find out your true equity you have to take your bigger number (CMV) and subtract it by the debt you owe. So if you house value is less than your debt you have negative equity. You borrowed $250,000 including taxes and interest and your house is worth $280,000. So your equity is $280,000 (appraised) - $250,000 borrowed = your equity is $30,000. So if you borrowed $250,000 and your house is worth $25,000 your equity is really low because $25,000 - $250,000 is -$225,000. In this case you would have zero equity. So just take the market value and subtract it from the debt and you will find out your equity.

Interest, how much you have to pay to borrow the loan. How much is your INTEREST in the loan? How much will you pay the guy to loan it to you? Interest applies to the unpaid balance. So if a purchase price is $250,000 and you put down $100,000 you pay interest on the borrowed $150,000 that will get you to the $250,000 and satisfaction of mortgage and estoppel certificate. Pick to pay interest at beginning of the month or end of the month. Arrear end of the month. In advance beginning of month. An owner of a loan can service it. A lender services a loan for a fee. How is a loan serviced? A car is serviced. A boat engine is serviced. A camera is serviced. How is a loan serviced? Must be more frequent. Like keeping books and taking records. Stay up to date with your loan! You'll get charged 3/8 to 3/4 of 1% of a loan amount. So in actuality you will owe 1-1/8 - 1-3/4% of the amount of your loan for loan fees and you pay this fee to the lender or loan servicer. A loan servicing option is a way for the lender to make more money on your loan. Lenders tend to service loans sold to institutional investors. Tax and insurance installments due to lender at beginning of month. Monthly payment is 1/12 of the total tax and insurance 12 months. Lender sets in escrow and pays out of escrow. Just give your lender taxes and insurance cash at the beginning of each month for the portion of that month. Most months are different. There are laws on the lenders the Feds place. An escrow account is an impound account. Borrower less likely to default if funds are held in escrow. Lender can rely on escrow for default, tax lien, and catastrophe. A lender's escrow can cover ongoing expenses. The mortgage payment can be paid in advance or in arrears. The mortgage payment is the principal plus interest. The total the lender gets per month on the mortgage is insurance and tax and principal and interest. PITI.

A discount point is an option to pay up front and lower interest rate. The lender likes this when property is valued under market. Borrower likes this because lower interest rate. Discount point gives lender money up front.

A loan origination fee is in addition to discount point. A lender will charge 1-2% of the total loan amount. This 1-2% is the Loan Origination fee. Lender charges the borrower credit report gatherings, preparing of loan documents, and processing a loan mortgage application. There are expenses a lender incurs preparing a loan. Loan documents, credit reports, and loan processing. A lender is charging a loan origination fee of 1.5% on a $150,000 loan, so $150,000 x .15 = $2,250. So a $250,000 loan at 3.5% is $8,750, .035 not .35.

Lender charges commitment fee. A developer of a shopping center or apartment complex must prove that financing after the center is built is secure before the lender will give the developer the construction loan. The developer must prove to the construction lender that future lending will be in place contingent on the construction lender lending for the project. If the construction lender lends, then usually the future financier will loan when the project is complete, so the takeout commitment is provided by the future lender that the construction lender can go ahead, the developer can go ahead, and the future financier can go ahead. A developer has to pay a takeout commitment lender, future project when project is done lender. A developer can be a borrower.

Describe lender charges

Describe: give an account in words of (someone or something) including all the relevant characteristics, qualities, or events. The police said the man was described as white, 6ft. tall, with mousy, cropped hair. Mark out or draw. 

Lender: an organization or person that lends money. A mortgage lender.

Charges: demand (an amount) as a price from someone for a service rendered or goods supplied. The restaurant charged $15 for dinner. He owed me 2 euros for the postcard. Museums should charge for admission. Charge something to record the cost of something as an amount payable by someone or on an account. Accuse someone of something an offense under the law. They were charged with assault. Entrust someone with a task as a duty or responsibility. A price asked for goods or services.

Calculate cost of discount points

Calculate: Determine mathematically. Japanese land value was calculated at 2.5 times that the U.S. Determine by reasoning, experience, or common sense. Reckon or judge. I was bright enough to calculate that she had been on vacation. Include as an essential element in one's plans. He may have calculated on maximizing pressure for policy revision. Counted.

Cost: require the payment of before it can be acquired or done. Each issue of the magazine costs $2.25. Cause the loss of. Driving at more than double the speed limit cost the woman her driving license. Estimate the price of. It is their job to plan and cost a media schedule for the campaign. An amount that has to be paid or spent to buy or obtain something. We were able to cover the cost of the event. The effort loss or sacrifice necessary to achieve or obtain something. She averted a train accident at the cost of her life.

Approximate yield resulting from discount points

Close to the actual but not completely accurate. The calculations are very approximate.

Yield: produce or provide. Produce or deliver. Generate. Such investments yield direct cash returns. Give way to arguments demands or pressure. The Western powers now yielded when they should have resisted. He yielded to the demands of his partners. Allow another to speak in a debate. I yield to the gentleman from Kentucky. Give way under pressure or force. He reeled into the house as the door yielded. The amount of money brought in interest from an investment or revenue from tax. return. Pay repay.

Discount: a deduction from the usual cost of something, typically given for prompt advance payment to a special category of buyers. A percentage deducted from the face value of a bill of exchange or promissory note when it changes hands before the due date. Below the nominal or usual price. A plan that allows tenants to buy their homes at a discount.

Points: a particular spot, place, or position in an area or on a map or surface. A single item or details in an extended discussion, list. A punishment imposed by the courts for a driving offense and recorded cumulatively on a person's driver's license. Unit, mark, point in time.

Discount point based on loan amount not purchase price, because lender gives loan and lender gives discount point. The borrower's cost to borrow can be calculated in points. Each point is approximately equivalent to 1% of the loan amount. So 6 discount points on a $40,000 loan will cost you $2,400. You give the lender the $2,400 in discount points, and owe $37,600. The interest rate is lowered because of the discount points you paid up front. Even if you pay discount points, you still have to pay an interest rate on the total amount of the loan you take out. So if you have 5% discount points on a $40,000 loan, you multiply $40,000 x .05% and get the amount $2,000, then pay interest on the total $40,000, but your interest rate may go down because you paid the lender more up front and they like that. The real yield for a lender in a loan is the discount points cash and the interest rate over a long period of time. The benefits for a borrower in a loan is that discount points can decrease your interest rate and you can pay a lump sum over period of time instead of bulk up front. A lender uses a table to tell you how many discount points to pay. The sum is not randomly asked. Each discount point is helpful to the lender because the yield is increased by .00125 of each 1%. So each point the lender charges to the borrower increases the loan yield by .00125 or 1/8th of 1%. So take the number of discount points from the beginning and add .00125 to the interest rate for the period of the loan. So 5 discount points is .00625 + 1.5% interest rate getting at 1.50625% interest rate. Discount point total you pay is subtracted from your total mortgage, a discount point is a way to pay down your mortgage, but your interest rate is still applied to your total loan.


$40,000 loan with 6 discount points, lender still needs $37,600. Just because you paid discount points doesn't mean your interest rate applies to the discount point total.

You go in and ask for a $40,000 loan. You get a 5.5% interest rate. You are offered 5 discount points. 1/8 of 1% is added to your interest rate.

Differentiate among different methods of purchasing mortgage property and other types of financing:

Ascertain what makes something different: Children can differentiate from the past to the present. Differentiate between differences between. He is unable to differentiate between fantasy and reality. Make someone appear different. Twain was careful to differentiate Huck's speech from that of other white people. Methods, a form or procedure of approaching something, systematic of established one, A method for software maintenance. Labor intensive production methods. Orderliness of thought or behavior. Historical study is the rigorous combination of knowledge and method. Purchasing (acquire something) by paying for it; by. Mr. Gill spotted the manuscript at a local auction and purchased it for $1,500. Obtain or achieve with suffering. Victory was purchased by the death of Rhiwallon. The action of buying something. A thing that has been bought. The acquisition of property by means other than inheritance. Financing, management of large amount of money by government or large companies, monetary support for enterprise, housing finance. Monetary resources and affairs of a country, organization, or person. Provide funding for. The city and county originally financed the project. Category of people or things having common characteristics. Assumption of mortgage is when new buyer and same lender equally share responsibility and new buyer pay off for sure. Subject, buyer gets right.