mortgage loan glossary D

Use the alphabet letters below to navigate to the words in this glossary.


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A contractual amount owed by one person to another.
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A legal document that transfers ownership (title) of a property. It is also used as evidence of property ownership. The deed is delivered to the buyer at the time of closing.
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Deed in Lieu

Short for "deed in lieu of foreclosure". After receiving confirmation from the lender, a borrower may grant the title/deed to the lender to satisfy the mortgage debt and avoid foreclosure. The lender may or may not cease foreclosure activities if a borrower asks to provide a deed-in-lieu. Regardless of whether the lender accepts the deed-in-lieu, the avoidance and non-repayment of debt will most likely show on a credit history. A deed-in-lieu may prevent having the foreclosure transaction recorded on the borrower's credit history and become a matter of public record.
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Deed of Trust

A legal document that pledges a property as security for payment of a loan. If the borrower can't repay the loan, it gives the lender the right to foreclose on the property and sell it. A deed of trust is similar to a mortgage contract except that it involves a third party called a trustee, usually a title insurance company, who acts on behalf of the lender. When a deed of trust is signed, the borrower is in effect giving the trustee ownership of the property, but holding on to the right to use and live in it. In many states the deed of trust is used in lieu of the mortgage.
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Failure to make mortgage payments on a timely basis or to comply with other conditions of a mortgage.
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Deficiency Judgment

A court order to pay the balance owed on a loan if the proceeds from the sale of the foreclosed property are insufficient to pay off the loan. Deficiency judgments are not allowed in all states.
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A loan in which a payment is overdue. Even though a lender may not charge a late fee for a number of days after the due date, the payment is still considered late and delinquent if not received by the due date. When a payment is more than 30 days late, most lenders report the late payment to one or more credit bureaus.
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Department of Veterans Affairs (VA)

An agency of the Federal Government that guarantees residential mortgages made to eligible veterans of the military services. The guarantee protects the lender against loss and thus encourages lenders to make mortgages to veterans.
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A decline in the original value of property due to natural causes like wear and tear, its age,, adverse changes in the neighborhood or any other reason; the opposite of appreciation.
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Discount Points

A fee added to closing costs in exchange for a lower interest rate on a loan. One point is equal to one percent of the loan amount. If you choose to pay points you can lower your interest rate.

Loan rate points can be either positive (discount points) or negative (rebate points). A loan with a higher interest rate in exchange for a rebate will provide a credit towards paying some of the non-recurring closing costs, such as title insurance, appraisal and origination fee. There is no cash received from rebate points.
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Down Payment

The portion of a property's purchase price the buyer pays in cash with his or her money and does not finance. This amount does not include closing costs. Example: John buys a house for $100,000 and obtains a loan for $80,000. His down payment is $20,000. The down payment amount determines whether mortgage insurance will be required on a loan.
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