Tenant Screening Terms and Definitions for Landlords – LMNOP – Accurate Credit Bureau

L

Landlord
A business or person who owns a rental unit, and who rents or leases the rental unit to another person, called a tenant.

Late Charge
Penalty paid by a borrower when a payment is made after the due date.

Lease
A rental agreement, usually in writing, that establishes all the terms of the agreement and that lasts for a predetermined length of time (for example, six months or one year). For landlord protection, see Accurate Credit Bureau’s Rental Lease

Legal aid organizations
Organizations that provide free legal advice, representation, and other legal services in noncriminal cases to economically disadvantaged persons.

Lender
The bank, mortgage company, or mortgage broker offering the loan.

Lien
A legal claim by one person on the property of another for security for payment of a debt.

Loan Application
An initial statement of personal and financial information required to apply for a loan.

Loan Application Fee
Fee charged by a lender to cover the initial costs of processing a loan application. The fee may include the cost of obtaining a property appraisal, a credit report, and a lock-in fee or other closing costs incurred during the process or the fee may be in addition to these charges.

Loan Origination Fee
Fee charged by a lender to cover administrative costs of processing a loan.

Loan-to-Value Ratio (LTV)
The percentage of the loan amount to the appraised value (or the sales price, whichever is less) of the property.

Lock or Lock-In
A lender’s guarantee of an interest rate for a set period of time. The time period is usually that between loan application approval and loan closing. The lock-in protects you against rate increases during that time.

Lock out
When a landlord locks a tenant out of the rental unit with the intent of terminating the tenancy. Lockouts, and all other self-help eviction remedies, are illegal. (Also, when tenants locks themselves out of the rental unit and requires the landlord or a locksmith to allow them back into the unit.)

M

Margin
A specified percentage that is added to your chosen financial index to determine your new interest rate at the time of adjustment for ARM loans.

Mediation

A process in which a neutral third person meets with the parties to a dispute in order to assist them in formulating a voluntary solution to the dispute.

Mortgage

A legal document by which real property is pledged as security for the repayment of a loan.

Mortgage Banker
An individual or company that originates and/or services mortgage loans.

Mortgage Broker
An individual or company that arranges financing for borrowers.

Mortgage Insurance
Insurance to protect the lender in case you default on your loan. With conventional loans, mortgage insurance is generally not required if you make a down payment of at least 20% of the home’s appraised value. (Note, however, that FHA and VA loans have different insurance guidelines.)

Mortgage Loan
A loan for which real estate serves as collateral to provide for repayment in case of default.

Mortgage Note
Legal document obligating a borrower to repay a loan at a stated interest rate during a specified period of time. The agreement is secured by a mortgage or deed of trust or other security instrument.

Mortgagee
The lender in a mortgage loan transaction.

Mortgagor
The borrower in a mortgage loan transaction.

N

Negative Amortization
A loan payment schedule in which the outstanding principal balance of a loan goes up rather than down because the payments do not cover the full amount of interest due. The monthly shortfall in payment is added to the unpaid principal balance of the loan.

Negligence/negligently
A person’s carelessness (that is, failure to use ordinary or reasonable care) that results in injury to another person or damage to another person’s property.

Non-Assumption Clause
A statement in a mortgage contract forbidding the assumption of the mortgage by another borrower without the prior approval of the lender.

Note
Legal document obligating a borrower to repay a loan at a stated interest rate during a specified period of time. The agreement is secured by a mortgage or deed of trust or other security instrument.

Notice of Default
Written notice to a borrower that a default has occurred and that legal action may be taken.

O

Origination Fee
Fee charged by a lender to cover administrative costs of processing a loan.

P

Payment Cap

Consumer safeguards which limit the amount monthly payments on an adjustable-rate mortgage may change. Since they do not limit the amount of interest the lender is earning, they may cause negative amortization.

Per Diem Interest

Interest calculated per day. (Depending on the day of the month on which closing takes place, you will have to pay interest from the date of closing to the end of the month. Your first mortgage payment will probably be due the first day of the following month.)

PITI
Abbreviation for Principal, Interest, Taxes and Insurance, the components of a monthly mortgage payment.

Points (or Discount Points)

Points are an up-front fee paid to the lender at the time that you get your loan. Each point equals one percent of your total loan amount. Points and interest rates are inherently connected: in general, the more points you pay, the lower the interest rate you get. However, the more points you pay, the more cash you need up front since points are paid in cash at closing.

Power of Attorney

Legal document authorizing one person to act on behalf of another.

Pre-approval
The process of determining how much money a prospective homebuyer or refinancer will be eligible to borrow prior to application for a loan. A pre-approval includes a preliminary screening of a borrower’s credit history. Information submitted during pre-approval is subject to verification at application.

Prejudgment Claim of Right to Possession
A form that a landlord in an unlawful detainer (eviction) lawsuit can have served along with the summons and complaint on all persons living in the rental unit who might claim to be tenants, but whose names the landlord does not know. Occupants who are not named in the unlawful detainer complaint, but who claim a right to possess the rental unit, can fill out and file this form to become parties to the unlawful detainer action

Prepaid Expenses
Taxes, insurance and assessments paid in advance of their due dates. These expenses are included at closing.

Prepaid Interest
Interest that is paid in advance of when it is due. Typically charged to a borrower at closing to cover interest on the loan between the closing date and the first payment date.

Prepayment
Full or partial repayment of the principal before the contractual due date.

Prepayment Penalty
Fee charged by a lender for a loan paid off in advance of the contractual due date.

Pre-qualification
The process of determining how much money a prospective homebuyer will be eligible to borrow prior to application for a loan. Information submitted during pre-qualification is subject to verification at application.

Principal
The amount of debt, not counting interest, left on a loan.

Private Mortgage Insurance (PMI)
Insurance to protect the lender in case you default on your loan. With conventional loans, mortgage insurance is generally not required if you make a down payment of at least 20% of the home’s purchase price. (Note, however, that FHA and VA loans have different insurance guidelines.)

Purchase Agreement
Contract signed by buyer and seller stating the terms and conditions under which a property will be sold.

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