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Calyx Software
PFC (Prepaid Finance Charge)
Charges made in connection with the loan that must be paid upon the close of the loan.
These charges are defined by the Federal Reserve Board in Regulation Z and must be
paid by the borrower. Examples of such charges are Loan origination fee, “Points” or
Discount, Private Mortgage Insurance or FHA Mortgage Insurance, Tax Service Fee.
Some loan charges, such as appraisal fees and credit report fees, are specifically
excluded from the Prepaid Finance Charge.
PMI (Private Mortgage Insurance)
Protection for lenders against borrower default; money paid to insure the mortgage when
the down payment is less than 20 percent of the appraised value.
ratios
Consist of a top ratio and a bottom ratio that determine eligibility for a loan.
Top ratio
Also called the Front-End Ratio or Housing Ratio. It is calculated by dividing the
proposed total monthly mortgage payment (which includes principal, interest,
taxes, insurance, and mortgage insurance) by the gross monthly income.
Bottom Ratio
Also called the Back-End Ratio or Total-Debt Ratio. It is calculated by dividing the
total monthly mortgage p the monthly recurring debt by the gross
monthly income.
Ratio Guidelines
80% LTV = 33/38
90% LTV = 28/36 95% LTV = 25/33
REO
Real Estate Owned
TCP/IP (Transmission Control Protocol/Internet Protocol)
A set of network protocols that connect the Internet. TCP is at the transport layer in the
network model, and IP delivers TCP and UDP packets across a network.
title insurance
A policy, usually issued by a title insurance company, that insures a home buyer against
errors in the title search. The cost of the policy is usually a function of the value of the
property, and is often bought by the purchaser and/or seller. Policies are also available to
protect the lender’s interest.
Truth-In-Lending (TIL)
A written disclosure to the borrower from the lender, required by Federal law, of the
mortgage terms (including the APR and other charges) after the
Loan Application
is
completed. The rights include a rescission period. Also known as Regulation Z.
VA loan
A long-term, low- or no-down payment loan guaranteed by the Department of Veterans
Affairs. Restricted to individuals qualified by military service or other entitlements. The
U.S. government guarantees these loans against default; therefore, they do not require a
down payment.
