We hope this Glossary of Mortgage and Real Estate Terms helps you understand the home buying and financing process. Should you have any further questions, please do not hesitate to contact your Loan Officer for answers.
Additional Terms: # A B C D E F G H I J K L M N O P Q R S T U V W XYZ
Number Terms
1003: Nick name for the Uniform Resident Loan Application HUD Form 1003.
1031 Tax-Deferred Exchange: Capital gains taxes are owed when a property on which there is a gain is sold. Section 1031 of the Internal Revenue Code allows 100% of the capital gain on business or investment property to be deferred into a new replacement property. These gains, as well as the gains from the new property, are not taxed until the new property is sold and fails to qualify for a tax deferral.
11th District Cost of Funds Index (COFI): Published by The Federal Home Loan Bank of San Francisco, COFI is the acronym for the 11th District Monthly Weighted Average Cost of Funds Index. The COFI is not an interest rate, it is an index used to calculate the fully indexed rate on COFI adjustable rate mortgages. It reflects the interest expenses reported for a given month by the COFI (11th District) Reporting Member financial institutions. The interest expenses are incurred from the COFI Reporting Members' various sources of funds. Their "costs" of funds include: Deposits - mainly checking and savings accounts, known as "Deposit Accounts" and are the primary source of funds for most savings institutions. Other sources of funds include loans obtained through the credit program of the Federal Home Loan Bank (known as "advances") and from other sources.
12-Month Treasury Average Index (MTA): Also know as the Monthly Treasury Average, it is a relatively new adjustable index. MTA is the 12 month average, of the monthly average yields of U.S. Treasury securities, adjusted to a constant maturity of one year. As an average of an average, the index moves slowly to market changes. It is calculated by averaging the previous 12 months Constant Maturity Treasury (CMT) monthly indexes. CMT indexes are weekly or monthly average yields on U.S. Treasury securities adjusted to constant maturity based, on the daily yield curves published by the Federal Reserve Bank.
2/28 ARM: A 30 year adjustable mortgage that is fixed for 2 years and there after adjusts for 28 years. The most common subprime mortgage loan term.
203(b): An FHA mortgage insurance program which protects lenders from borrower's defaulting. Used to purchase or refinance one to four family homes. It has low down payments, flexible credit and income guidelines allowing more home buyers to qualify to purchase a home. FHA loan amounts are limited to averages, by count,y of home prices.
203(k): An FHA mortgage insurance program which allows homebuyers to both purchase a property and borrow the cost of its rehabilitation, through one mortgage loan.
3/27 ARM: A 30 year adjustable mortgage that is fixed for 3 years and there after adjusts for 27 years.
30/15 Fixed Mortgage: A mortgage which is fixed and is paid like a 30 year mortgage with 360 payments. However, it "balloons" in 15 years or 180 payments, and the remaining balance must be paid.
40/30 Fixed Mortgage: A mortgage which is fixed and is paid like a 40 year mortgage with 480 payments. However, it "balloons" in 30 years or 360 payments, and the remaining balance must be paid.
50/30 Fixed Mortgage: A mortgage which is fixed and is paid like a 50 year mortgage with 600 payments. However, it "balloons" in 30 years or 360 payments, and the remaining balance must be paid.
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