Glossary

Abstract of Title:

A written history of ownership of a piece of land or real property summarizing the ownership and any occurrence of liens affecting the property.

Acre :

A unit of measure for land, or 43,560 square feet.

Act Of God :

An event which causes damage by nature such as a flood, earthquake, or winds; an occurrence which was not caused by man. (Generally not covered by homeowners insurance.)

Addendum :

An agreement or exhibit that is added to a contract, agreement, or other document.

Adjustable Rate Mortgage (ARM) :

A mortgage in which the interest rate is adjusted periodically, based on a pre-selected index. This may cause payments to go up or down accordingly. Merrill Lynch Home Loans^TM offers mortgage loans that adjust monthly, every six months and annually.

Adjustment Date :

The date of initial or periodic interest rate or payment adjustments for ARM loans.

Adverse Action :

When a borrower is denied a loan in the amount or on the terms they requested.

Affidavit :

A sworn statement in writing, usually requiring notarization. Frequently required at loan closings.

Aggregate Escrow Adjustment :

The aggregate escrow adjustment (or aggregate accounting adjustment) is a change/credit to the client and increases/decreases the total amount of money for all escrows combined (e.g., taxes, hazard insurance, private mortgage insurance) that must be placed in escrow at closing. The adjustment ensures that the escrow account, when reaching its lowest level during the year, will not contain more/less than the allowable cushion selected by the lender (usually two months).

Alimony :

An allowance for support made under court order from one party to another usually after a legal separation or divorce.

Amortization :

Payments consisting of both principal and interest which, when collected as scheduled, will repay the principal amount of a mortgage by the end of the loan term.

Amortization Schedule :

A table showing the amounts of principal and interest due at regular intervals for the term of the loan and the unpaid principal mortgage balance after each payment is applied.

Annual Percentage Rate (APR) :

A measure of the cost of credit, expressed as a yearly rate. It includes interest as well as certain other charges. Because all lenders follow the same rules to ensure the accuracy of the annual percentage rate, it provides consumers with a good basis for comparing the cost of obtaining loans.

Appraisal :

An opinion or estimate of the value of a property.

Application Fee :

A fee required at the time of application to begin processing the loan application.

Appraiser :

A person qualified by education, training, and experience to estimate the value of real and personal property.

Appreciation :

An increase in value for any reason except inflation.

Arrears :

When mortgage interest is paid at or after the end of the accrual period.

Assessment (Tax Assessment) :

A value factor assigned to real property and used to determine real property taxes.

Assessor (Tax Assessor) :

A local public official who appraises taxable property to determine its assessed valuation for purposes of calculating real estate taxes.

Asset :

A property or right owned, tangible or intangible, which has monetary value.

Assignment :

The transfer of ownership, rights, or interests in property (i.e., mortgage or deed of trust).

Associate (as referred to in the Merrill Lynch Home Loans^TM loan application) :

(I) Any corporation or organization (other than Bank of America Corporation or any subsidiary of Bank of America Corporation) of which you are an officer or partner or are, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities (viz., any stock or similar security; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right), (II) any trust or other estate in which you have a substantial beneficial interest or as to which you serve as trustee or in a similar fiduciary capacity, and (III) any relative or spouse or yours, or any relative of your spouse, who has the same home as you or who is a director or officer of Bank of America Corporation or any of its subsidiaries.

Association :

The group or board that has been elected or hired to manage the affairs of a group of homeowners. Reviews and approves all modifications and variances to the bylaws of the group. Generally found in condominiums and planned unit developments (PUD).

Association Dues :

A fee collected by the association (generally monthly) to fund common interests and liabilities. Some of the items that may be covered are maintenance, property taxes on common areas, administrative costs, and etc.

Assumption (Assumable) :

Taking over another person's loan and becoming responsible for its repayment.

Attached Garden/Patio Home :

A row house, in a city, on a small lot that has exterior limits common to other similar units. Title to the unit and lot is vested in the individual owner with a shared interest in common areas, if any.

Average rate of return :

The return on an investment as calculated by averaging the total cash flows over the years during which the cash flows are received by the investor.

Balloon Mortgage :

A short term, fixed- or adjustable-rate mortgage that has payments that do not fully amortize over the term of the loan. The balance of the mortgage is due in a lump sum at a specified date at the end of the term.

Balloon Payment :

A scheduled payment on a mortgage that is larger than other periodic payments, usually the unamortized final payment; short-term, fixed- or adjustable-rate loan that has small payments for a specified period of time and one large payment for the remaining amount of principal at a time specified in the promissory note.

Bankruptcy :

A provision of federal law that allows a debtor to surrender assets to the bankruptcy court and be relieved of the future obligation to repay unsecured debt. After bankruptcy, the debtor is discharged and unsecured creditors may not pursue further collection efforts. While bankruptcy is pending, secured creditors (those holding collateral, deeds of trust or judgment liens) continue to have security interests in the property, but may not take other actions to collect from the debtor.

Beneficiary :

A person who benefits from a will, contract, or deed of trust.

Binder (Earnest Money) :

A monetary binder between buyer and seller towards the purchase of real estate to demonstrate that the buyer is serious (earnest) about wanting to complete the purchase agreement.

Blanket Mortgage :

A mortgage that covers more than one piece of property under one instrument.

Bonus :

Something given to you that is not usual or expected. In addition to your normal salary or income.

Borrower :

One who receives funds in the form of a loan with the obligation of repaying the loan in full with interest. The borrower's name must appear on the mortgage and promissory note.

Bridge Financing :

Financing a home that is pending sale or under contract to obtain funds needed to build or purchase a new home.

Buy down :

Where you pay an amount, generally a percentage of the loan, to receive a lower rate and lower payments.

Buyer's Attorney Fee :

A fee for the cost of having an attorney represent the client at closing. Required in certain states.

Call Provision :

The clause in the loan note that allows the lender to demand repayment of the balance of the loan in the event of a breach of specified terms or conditions.

Capital Gains Tax :

A tax on the gain (income) from the sale of a capital asset, such as a second home, property or securities. The capital gains tax usually does not apply to the sale of your homestead or primary dwelling.

Capital Expenditures :

The last three years records of capital expenditures, including the items and the amounts required, for commercial loans.

Caps (interest-rate caps) :

A limit on the amount that an interest rate or monthly payment may change at each periodic adjustment or during the life of the mortgage on an adjustable-rate mortgage.

Cash Down Payment :

The money paid to make up the difference between the purchase price and mortgage amount. Usually 10 to 20 percent of the sales price on a conventional mortgage.

Cash Management Account^® (CMA) :

A Merrill Lynch centralized asset account, combining checking, VISA^® card, money market funds and brokerage capabilities.

Cash-Out Refinancing :

When the principal amount of a new mortgage involved in refinancing is greater than the principal amount outstanding of the existing mortgage being refinanced plus related closing costs on the new mortgage.

Certificate of Eligibility (COE) :

A certificate issued by the Veterans Administration (VA) required for VA-backed loans that verifies to a VA approved loan underwriter eligibility to obtain a VA loan.

Certificate of Occupancy :

Written authorization given by a local municipality that allows a newly completed or substantially renovated structure to be inhabited.

Child Support :

An allowance, made under court order, from one person to another to provide for the rearing of a child.

City Taxes at Closing :

A tax charged by certain cities based on the amount of the home mortgage recorded.

City/Tax Stamps :

A tax charged by certain states and counties based on the amount of the home mortgage recorded. Stamps are issued in the mortgage amount and are affixed to the mortgage document prior to recording.

City/Township Tax Escrow :

Depending on the city/township in which the property is located, this amount is collected by the lender at closing to fund the city/township tax escrow account. The funds collected at closing will be combined with the monthly amount collected (1/12th of the annual bill amount) to pay the client's city/township tax bill when it comes due.

Clear Title :

Unencumbered ownership of real property, free of liens or defects.

Closed-End Mortgage :

A mortgage that does not allow the mortgagor to borrow additional funds after the closing.

Closing :

The meeting between the buyer, seller and lender or their agents where the property and funds legally change hands and the mortgage documents are executed.

Closing Costs :

Fees paid to obtain a mortgage such as the costs of a credit report, real estate appraisal, lender's origination fee, title insurance fees, mortgage recording fees and taxes, attorney's fees, etc. If you are buying a home, closing costs may also include property inspection fees, deed transfer taxes, survey, etc.

Closing Agent (a.k.a. Escrow Agent in CA and NV) :

The person(s) who witness and facilitates the execution of the loan closing documents.

Closing Documents/Package :

The papers you sign at closing to perfect the lender's lien on the property.

Closing Fee :

This fee covers the Lender's cost of preparing for closing. This is a flat fee and not based on the loan amount.

Closing Specialist :

A Merrill Lynch Home Loans^TM (MLHL) employee who is responsible for loans at the time of closing. This person schedules the closing and sends the appropriate closing documents to the Closing Agent. (The Closing Agent is the person who will actually attend the closing on Merrill Lynch's behalf.) After closing, the Closing Specialist is responsible for verifying that all closing conditions were met.

CMA^® Sub-account :

A sub-account linked to the central CMA^®account. For example, the securities pledged for Mortgage 100^® would be held in such an account.

CMT (1-year Constant Maturity Treasury) :

The weekly average yield on United States Treasury Securities adjusted to a constant maturity of one year as published by the Federal Reserve Board in publication number H.15.

Co-borrower :

A second borrower who signs a mortgage loan with the borrower. The co-borrower's income, assets, and debts are combined with the borrower's for underwriting and ratio analysis purposes. The co-borrowers name must appear on the mortgage note.

Collateral :

Property, securities or capital pledged to secure a loan or line of credit.

Collateral Call for Mortgage 100^®1 or Parent Power^®1  : 

Color Photographs :

Recent color photographs (within the last 6 months) of the property's interior and exterior, which are required to provide a preliminary overview of the characteristics of the property.

Combined Loan-to-Value (CLTV) :

The ratio of mortgage amount for combined mortgage balances to appraised value or sales price of real property; combined balances of all mortgages versus the value of your property.

Comparables :

Properties used for comparative purposes in the appraisal process that have similar characteristics to the subject property.

Commercial Investment Property :

A property zoned or used for commercial or business purposes, as well as multi-family housing with more than four units.

Commercially :

Pertaining to business, used for a business purpose when referring to real estate.

Commission :

A fee paid for services rendered. For sales people generally expressed as a percentage of sales or revenues for services or products sold.

Commitment Letter :

A lender's written offer to grant a mortgage loan, which outlines the loan terms, principal amount, interest rate and any conditions that must be met prior to closing the loan.

Commitment Fee :

Fee charged by a lender to cover the cost of handling the application and credit investigation relating to a loan application. The fee is often expressed as a percentage of the face value of the loan.

Community Property :

A form of ownership in some states under which property acquired during a marriage is presumed to be owned jointly unless; acquired as separate property of either spouse, purchased prior to the marriage, received as a gift or from an inheritance.

Conditional Commitment :

An agreement to lend money to a borrower subject to the conditions set forth in the commitment.

Condominium :

A system of individual, fee simple ownership of a unit in a multi-unit structure, combined with joint ownership of common areas. Each individual may sell or encumber his/her own unit.

Conforming Mortgage Loan :

A mortgage loan which meets all requirements to be eligible for securitization by federal agencies such as the Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC).

Construction Loan Draw :

A partial disbursement of a construction loan based on the schedule of payments in the Construction Loan Agreement.

Construction-to-Permanent Mortgage Program :

A mortgage loan program that can fund the construction phase and then convert to a permanent mortgage with just one closing.

Contingency :

A clause in a contract that requires the completion of a certain act or the occurrence of a certain event, i.e. appraised value, before the contract is binding.

Contract :

A standardized agreement obligating two parties to a transaction at a price and time specified.

Contract of Sale :

A written document in which the purchaser agrees to buy certain real estate or personal property and the seller agrees to sell under stated conditions.

Contractor :

A person or company who agrees to do work for a contracted price. The contractor often hires subcontractors to perform specialized work.

Conventional Financing :

Mortgage financing in which the underlying terms and conditions meet the funding criteria of Fannie Mae and Freddie Mac.

Conversion Option :

A provision in some adjustable-rate mortgages (ARMs) that allows you to change the ARM index or even convert to a fixed rate-loan at some point during the term. The conversion to a fixed rate feature generally requires an additional cost.

Conversion Conditions :

A pre-determined set of conditions that must be met to allow the conversion from an adjustable- rate to a fixed-rate loan, or to change the index upon which adjustable-rate payments are based.

Convey :

The act of transferring title to real property from one party to another.

Coop Association :

The group or board that has been elected to manage the affairs of the coop building. Reviews and approves all prospective buyers prior to completion of the sale of shares.

Cooperative (Co-op) :

A form of multiple ownership in which a corporation or business trust holds title to a property (usually an apartment complex) and grants occupancy rights to shareholder tenants through proprietary leases.

Corporation (C Corp.) :

A corporation is considered an artificial person under law. The financial liabilities of the corporation are paid out of the assets of the corporation and neither the shareholders, directors, nor officers of the corporation are personally liable for the financial liabilities of the corporation.

Correspondent :

A specialized type of mortgage lender whose loans are originated to sell to other mortgage bankers or investment bankers.

Counter- Offer :

When the lender offers to grant credit other than in the amount or on the terms requested by the applicant.

County Taxes At Closing :

A tax charged by certain counties based on the amount of the home mortgage recorded.

County Tax Escrow :

Depending on the county in which the property is located, this amount is collected by the lender at closing to fund the county tax escrow account. The funds collected at closing will be combined with the monthly amount collected (1/12th of the annual bill amount) to pay the client's county tax bill when it comes due.

County Tax/Stamps :

A tax charged by certain states and counties based on the amount of the home mortgage recorded. Stamps are issued in the mortgage amount and are affixed to the mortgage document prior to recording.

Credit Report :

A report to a prospective lender on the credit standing of a prospective borrower, used to aid in determination of creditworthiness.

Debt-to-Income Ratio (DTI) :

A percentage derived by dividing the borrower's monthly payment obligations by his or her net or gross monthly income. Also called obligation-to-income.

Deed :

A written document conveying real property from one party to another. Once recorded at the courthouse, the original piece of paper (deed) is not needed to convey title in the future.

Deed-in-Lieu :

A deed given by a borrower to satisfy a debt and avoid foreclosure.

Deed of Trust :

A type of security instrument in which the borrower conveys title to real property to a third party (trustee) to be held in trust as security for the lender. Typically, includes a provision indicating the trustee shall re-convey the title upon payment of the debt, and conversely, has the right to sell the land and pay the debt in the event of a default by the borrower.

Default :

A breach or failure to perform the terms of a note or mortgage.

Defeasance :

When the borrower posts risk-free collateral (in the form of direct, non-callable securities backed by the full faith and credit of the United States government) that will provide sufficient cash flow to make the remaining loan payments, including any balloon payment. Enables the lender to release the lien against the mortgaged property prior to the agreed upon maturity date.

Delinquency :

Failure to make monthly payments on time per the loan note. This can lead to foreclosure.

Depreciation :

A decline in value of real estate, resulting from age, physical wear, and economic or functional obsolescence.

Developer :

A person or entity that prepares raw land for building sites or rehabilitates existing buildings.

Disbursements :

Periodic payments of monies. Used to describe construction loan draws.

Disclosure :

Information relevant to specific transactions that is required by law.

Discount Points :

Upfront fee equal to a percentage of the principal loan amount which enables a borrower to buy down the interest rate.

Dividend :

A stockholder's share of profits of a corporation.

Document Preparation Fee :

This fee is charged to cover the cost for the preparation of all closing documentation required to perfect the lien to ensure the collateral for the loan.

Down Payment :

The money paid to make up the difference between the purchase price and mortgage amount. Usually 10 to 20 percent of the sales price on a conventional mortgage.

Draw :

Periodic advances of funds according to the schedule of payments in a construction loan.

Due on Sale Clause (Non-assumption clause) :

A mortgage clause that forbids the assumption of the mortgage by another party without the lender's approval.

Earnest Money :

A sum of money given to bind a sale of real estate (a deposit).

Effective Age :

For purposes of an appraisal, the physical age given to a building based on its present condition, which may differ from the actual age.

Eligible Securities :

Includes but is not limited to publicly traded stocks, bonds, mutual funds, money markets, and CDs that meet Merrill Lynch Home Loans^TM guidelines for Mortgage 100^® or Parent Power^® programs¹. These securities are not part of a retirement account, such as a 401(k), IRA, Roth IRA or Keogh. Eligible securities may be pledged in lieu of a down payment to obtain 100% financing. See also Ineligible Securities.

Endorsements :

A provision added to an existing title policy to modify or clarify its coverage.

Equity :

The value an owner has in real estate over and above the obligation against the property. For example, if you had a home valued at $100,000 and owed $30,000 on the mortgage loan, you would have $70,000 of equity or net ownership.

Equity Access^®:

A Merrill Lynch Home Loans^TM home equity revolving credit line secured (collateralized) by the available equity in your home.

Endorser :

To acknowledge or give approval of by signing.

Escrow (a.k.a. reserves or impounds) :

An item of value (money) deposited with a third party to be delivered upon fulfillment of a condition. For example the deposit by a borrower with a lender of funds to pay taxes and insurance premiums when they become due.

Escrow Account :

The account in which funds collected by the lender in advance, usually on a monthly basis for the payment of real estate taxes and/or insurance are held (In CA and NV see impounds).

Escrow Agent :

A person or entity that has a fiduciary responsibility to both the buyer and seller (or lender and borrower) to see the terms of the loan are carried out.

Escrow Fee :

Amount collected by the escrow agent for serving as trustee for the funds and documents necessary to complete the transaction until such time as the contingencies of the agreement have been met. The escrow fee is normally based on the size and complexity of the transaction.

Estimated Market Value :

What a person believes his/her house is worth. This estimate is used to determine the initial loan-to-value ratio. The appraised value or sales price is generally considered the real market value.

Executive Officer (as referred to in the ML loan application) :

The chairman, president, any vice president in charge of a principal business unit, division or function (such as sales, administration, or finance) and any other person who performs a policy-making function for the parent company. Executive officers of subsidiaries may be deemed executive officers of the parent if they perform such policy-making functions for the parent.

Expected Return on Investments :

Your estimated average rate of return for your investments over the Holding Period. Simulate an expected rate of return to show how investing monthly payment savings and/or down payment can potentially increase net worth. Assume a 0% rate of return if you will not invest savings in an investment vehicle.

Explain any engineering or environmental issues :

Associated with the property or the immediate area. Describe any plans for renovations or addressing deferred maintenance items. Is there a "story" that goes with the property's economics? If so, please provide it. If this is an acquisition, please state the purchase price, deal contingencies and enclose a copy of the applicable purchase agreement.

Fair Market Value :

The price agreed upon by a buyer and seller to transfer real property, neither being under any compulsion to sell.

Federal Home Loan Mortgage Corporation (FHLMC) :

A corporation created by Congress to support the secondary market in mortgages on residential property, also called Freddie Mac.

Federal Housing Administration (FHA) :

A federal agency that provides mortgage insurance for residential mortgages and sets underwriting standards.

Federal National Mortgage Association (FNMA) :

A corporation established by Congress to support the secondary market in mortgages on residential property, also called Fannie Mae.

Fee Simple :

The greatest possible interest a person can hold in real estate providing them the right to sell the property or pass it on to their heirs.

Fiduciary :

Acting in the trust or confidence of another.

Final Inspection Fee :

A fee associated with an inspection of the property to verify completion as described. Usually associated with new construction.

Finance Charge :

A term defined in the federal Truth in Lending Act which generally includes all charges payable as a result of an extension of a loan.

First Mortgage :

A mortgage in first lien position which has rights over all other liens on the real property.

Fixed-Rate Mortgage :

A mortgage loan with a set interest rate and payment amount for the entire term of the loan.

Flexible First^®:

A Merrill Lynch Home Loans ^TM program that allows you to combine a first mortgage with a home equity line of credit. The equity term will generally match the term of the first mortgage (in most states) to provide credit access for present and future financing needs.

Flood Certification :

A certification that a property is or is not located in a flood plain. The certificate is issued by Flood Data Services Incorporated (FDSI) and is required by law for a mortgage.

Flood Insurance :

An insurance policy, separate from homeowners coverage, that provides compensation to the insured in case of property loss or damage from rising water.

Flood Insurance Escrow :

The amount collected by the lender at closing to fund the escrow account. The funds collected at closing will be combined with the monthly amount collected (1/12th of the annual bill amount) to pay the client's flood insurance premium when it comes due.

Flood Insurance Premium :

Premium for coverage that provides compensation to the insured in case of property loss or damage from rising water.

Foreclosure :

A legal procedure terminating all rights of the mortgagor in the property covered by a mortgage generally as a result of default. The property is then sold to repay the mortgage debt.

Fully Executed Contract of Sale :

A written document in which the purchaser agrees to buy certain real estate or personal property and the seller agrees to sell under stated conditions, which has been signed by all parties involved and notarized if required.

Funding :

The actual disbursement of funds that generally takes place at the loan closing.

Future Capital Contributions :

The requirement of a shareholder/partner to provide additional funds towards a business entity. Sometimes based on a contractual commitment (e.g., an investor guarantees to pay $10,000 per year for five years until the business is up and running).

General Contractor :

The person or company that is responsible for supervising the construction or development of a property based on the terms of the construction contract. The general contractor often uses subcontractors to do specialized work.

General Partner :

The partner(s) in a partnership who is liable for all debts and obligations of the partnership. The general partner usually controls the operations of the business and can take actions on behalf of the partnership.

Gifting :

Providing funds as a gift to satisfy part of the cash requirement for closing; only allowed when the donor (giver) is a relative. A relative is defined as the borrower's spouse, child or dependent, or any other individual related to the borrower by blood, marriage, adoption, or legal guardianship. The gift must be evidenced by a letter which is signed and dated by the donor, and must include the following:

• The specific dollar amount of the gift and the date the funds were transferred.
• The donor's name, address, telephone number and relationship to the applicant/borrower.
• The donor's statement that no repayment is expected.

Good Faith Deposit :

A fee that will be charged for services rendered (i.e. appraisal, flood certification, etc.) if the client does not close on the mortgage application after loan registration. A credit card hold in this amount is required at the time of loan registration to begin processing the application.

Good Faith Estimate (GFE) :

An estimate provided to the borrower that details closing costs and fees required to secure the mortgage, such as points, related fees and costs for third-party reports, such as flood determination or tax service fees.

Grace Period :

The time allowed after your monthly payment is due before assessing a late fee.

Ground Lease :

A lease of land only. The person living in the home may own the home but has a lease for the property on which the home sits that extends beyond the term of the mortgage.

Guarantee Value :

Is the amount that Merrill Lynch Home Loans^TM insures to the investor in the event of default on the underlying mortgage note with 100% financing programs.

Hazard Insurance Escrow :

The amount collected by the lender at closing to fund the escrow account. The funds collected at closing will be combined with the monthly amount collected (1/12th of the annual bill amount) to pay the clients hazard insurance premium when it comes due.

Hazard Insurance :

Coverage that provides compensation to the insured in case of property loss or damage.

Hazard Insurance Reserves :

The amount collected by the lender at closing to fund the escrow account. The funds collected at closing will be combined with the monthly amount collected (1/12th of the annual bill amount) to pay the clients hazard insurance premium when it comes due.

Holding Period :

The length of time you intend to live in the subject property or hold the mortgage on the subject property.

Home Equity Line of Credit (HELOC) :

A revolving line of credit secured (collateralized) by your home.

Homeowners Association (HOA) :

The group or board that has been elected or hired to manage the affairs of a group of homeowners. Reviews and approves all modifications and variances to the bylaws of the group. Generally found in condominiums and planned unit developments (PUD).

Homeowners Policy :

Insurance available to owners of private dwellings which covers the dwelling and its contents.

Homestead Exemption :

An allowance offered to homeowners for their primary residence in some states that affords a break on property taxes.

HUD-1 Settlement Statement :

A financial disclosure giving an account of all funds received and disbursed at closing, including escrow deposits for taxes and hazard insurance, and mortgage insurance.

Immediate Family (as referred to in the ML loan application) :

A person's spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law. It also includes any person who during the period in question was, but no longer is, a member of your immediate family.

Impounds :

Funds collected by the lender in advance, usually on a monthly basis for the payment of real estate taxes and/or insurance. Also known as escrow or reserves.

Improvements :

Additions to land or dwellings that improve their value.

Income :

The amount of money received over a period of time in exchange for labor or services rendered.

Index :

A published interest rate, such as the Prime rate, London Interbank Offered Rate (LIBOR), or 1- year Constant Maturity Treasury (CMT).

Ineligible Securities :

Securities that do not meet the requirements of eligible securities based on Merrill Lynch Home Loans^TM guidelines. Some examples of, but not limited to, ineligible securities are: Equities priced less than $10 per shares, foreign equities, offshore mutual funds, corporate debt instruments that are non-margin-eligible and rated less than Baa/BBB, municipal debt instruments that are speculative (rated less than Baa/BBB), CDs that are issued by a foreign bank, ISA money market funds, annuities and other insurance products, limited partnerships units including (KECALP), any option trading (except covered calls), precious metals, margined assets, stock options, futures, hedge funds, structured investments.

Ingress and Egress :

The right to enter and exit land, respectively.

Initial Collateral Value ("ICV") :

The required value of pledge eligible securities at closing in the pledge account as additional collateral for the purpose of obtaining a loan amount that exceeds Merrill Lynch Home Loans^TM standard loan to values. This is generally 130% of the Guarantee Value. This allows the client to maintain their investment strategy (with certain restrictions) and obviates the need for mortgage insurance. The Initial Collateral may vary depending on the client's particular situation.

Initial Truth In Lending Statement :

Full, written disclosure of credit terms and conditions including; the finance charge, annual percentage rate, and other charges incurred in the loan contract provided to the borrower as required by Regulation Z.

Insured Closing Protection Letter :

A letter issued by the title insurance company that protects the mortgagee against embezzlement or failure to follow the conditions for closing set forth by the lender.

Interest :

Consideration in the form of money paid for the use of money, usually expressed as a percentage rate. Also a right or share in a property.

Interest Rate :

An agreed upon sum, usually expressed as a percentage rate, to be paid in the form of money for the use of funds.

Interest- only :

A feature of some Merrill Lynch Home Loans^TM Mortgage and Credit programs that allows the borrower to pay only the interest on a loan, without paying down the principal with each monthly payment.

Investor :

A person or company that commits money or capital to gain future profit or interest.

Irrevocable Trust :

A Trust that was established with a clause that makes it incapable of being revoked or withdrawn.

Joint Tenancy :

Form of ownership where the owners have equal shares or rights in the property including the right of survivorship.

Jointly Owned Property :

Title is held in the name of more than one person.

Judgment :

A final court determination as to the rights and claims of the parties to an action.

Judgment Lien :

A judgment that results in a lien upon property of the debtor until restitution is made.

Jumbo Loan :

A loan amount that is in excess of the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Jumbo loans may carry a higher interest rate than loans below this limit.

Late Fee :

The fee charged to the borrower if the lender has not received the agreed upon monthly payment by the last day of the agreed upon grace period.

Lawsuit :

A case brought before a court for judgment.

Lease :

A written agreement containing the terms for the possession and use of real property for a set period of time.

Legal Description :

Property description recognized by law. Generally consists of a metes and bounds, description or reference to a subdivision plat, which enables the property to be located without oral testimony.

Lender :

The entity that offers the mortgage loan, also called the mortgagee or creditor.

Lender's Attorney Fee :

These fees are paid to attorneys for legal services rendered in connection with the mortgage transaction.

LIBOR (London Interbank Offered Rate) :

The rate at which foreign banks lend dollars to one another. Considered one of the most important barometers of the international cost of money. This rate can be based on a 1-year or a one- three- or six-month index and is published daily in The Wall Street Journal "Money Rates" table.

Lien :

A legal hold or claim of a creditor against the property of another as security for a debt.

Lien Waiver :

A waiver of mechanic's lien rights which states the firm has been compensated for its work. Generally required when a lender finances a property after construction has begun.

Lifetime Cap :

The highest interest rate of an adjustable-rate mortgage (ARM). Your initial rate plus a margin disclosed in your mortgage note.

Limited Partnership :

A form of business entity that has one or more general partners, who are fully liable, and one or more limited partners, who have liability only for the amount of their investment.

Limited Liability Company (LLC) :

Is an entity formed under state law and is owned by members who are not personally liable for the company's debts or obligations. An LLC can be classified as a partnership for federal tax purposes and file form 1065 returns. Generally a holder of real estate.

Liquidate :

To convert an asset into cash. For example, to sell real estate or stocks.

Liquidity :

The amount of assets or investments that may readily be converted to cash.

Listing :

A fully executed agreement authorizing an agent to offer real estate for sale.

Listed for Sale :

A property which is currently on the open market for sale. Generally a realtor has a signed agreement to show the property to interested parties.

Loan Administration :

The department responsible for servicing the loan after it is closed. This includes services such as collection of payments, management of escrow accounts and interest rate adjustments.

Loan Closing :

The meeting between the lender and the borrower, or their agents, where the funds legally change hands.

Loan Representative :

Specialists whose job is to help you decide which Home Financing Solution is right for you. They can help you complete an application over the phone and begin the Loan Approval process. When possible, they will conditionally approve your loan over the telephone and forward it to a Loan Counselor for further processing.

Loan Processor :

A dedicated specialist who works with you through the processing and closing of your loan.

Loan Servicing :

The department responsible for servicing the loan after it is closed. This includes services such as collection of payments, management of escrow accounts and interest rate adjustments.

Loan-to-Value Ratio (LTV) :

The relationship, expressed as a percentage, between the principal amount of a loan and the appraised value or sales price (whichever is lower) of the asset securing the loan. For example, a $50,000 loan on a $100,000 house would have a loan-to- value ratio of 50 percent.

Lock-in Period :

The length of time the lender will hold or reserve a specific rate if the loan is closed within this period. See also rate lock.

Loss Draft :

A draft from an insurance company to reimburse the insured for damage to property. Generally made out to the both the borrower and the lender.

Loss Payee Clause :

The clause required by lenders to be placed on borrowers' homeowner's insurance to protect the lender's interest in case of property damage.

Lot :

A piece of land having identified boundaries.

Maintenance Value :

The lowest amount that the value of your eligible securities may fall to as a result of normal market fluctuations within your pledge account(s). This is generally 110% of the Guarantee Value.

Maintenance Tax :

A tax charged by local government.

Managing Agent :

A person or company hired by the owner(s) of a property to maintain and manage the property on behalf of the owner.

Mansion Tax :

A tax of 1% of the purchase price payable to New York State on homes exceeding $1 million.

Manufactured Home :

Factory-built or pre-fabricated homes (includes mobile homes).

Margin :

(1) In mortgages, the amount (spread) the lender adds to the index to establish the ARM interest rate. (2) In stock transactions, the amount or cushion required to be maintained in your account when borrowing against your current asset account to purchase additional securities. Usually expressed as a percentage of the purchase price or market value.

Margin Call :

A request for the deposit of additional funds or collateral to offset trading losses on an outstanding position in an asset account that is subject to margin.

Market Value :

The highest price that a buyer will offer and the lowest price that a seller will accept, neither one being compelled to buy or sell.

Maturity Date :

The agreed upon date when the term of a loan ends.

Mechanics Lien :

A lien filed by a construction contractor to secure payment for work performed.

Metes and Bounds :

A legal description of boundaries for a parcel of land defined by direction and distance.

Modification Agreement :

An agreement between the borrower and the lender to change the terms of the mortgage loan.

Modification and Consolidation (Mod & Consod) :

An agreement between the borrower and the lender to change the terms of an existing mortgage loan to incorporate the terms of a new one, including the advance of additional principal.

Monthly Alimony :

The monthly portion of alimony received annually (e.g., if a person receives $1,200 annual alimony they receive $100 in monthly alimony).

Monthly Child Support :

The monthly portion of the allowance, made under court order, from one person to another to provide for the rearing of a child (e.g., if a person receives $1,200 annual child support they receive $100 in monthly child support).

Monthly Rental Income :

The monthly portion of rent received annually (e.g., if a person receives $1,200 annual rental income they receive $100 in monthly rental income).

Monthly Salary :

The monthly portion of salary received annually (e.g., if a person receives $12,000 annual salary they receive $1,000 in monthly salary).

Mortgage :

A pledge of property as security for a debt in the form of a lien placed on the borrower's property, as collateral for a loan. If the borrower defaults on the loan the lender has the ability to sell the property to satisfy the loan.

Mortgage Balance :

The unpaid balance of a loan, excluding interest.

Mortgage Broker :

An individual or corporation who matches borrowers and lenders for a commission.

Mortgage Insurance (MI) :

Insurance protecting the lender against loss in the event of nonpayment by the borrower. This protection enables lenders to make loans on purchase transactions with lower down payments.

Mortgage/Intangible Tax :

A tax assessed by certain states, cities or counties on newly recorded mortgages. The amount of tax is based on the mortgage amount.

Mortgage 100^®1 :

A Merrill Lynch Home Loans^TM program offering up to one hundred percent (100%) financing, available with many MLHL mortgage products. Allows the borrower to maintain their asset level without paying mortgage insurance.

Mortgagee :

The lender in a transaction secured by a mortgage.

Mortgage Tax :

The tax assessed by certain counties and certain states on recorded mortgage balances.

Mortgagor :

The borrower in a transaction secured by a mortgage.

Multi-family (2-4 units) :

A residential property that has more than one unit, each designed as a single housing unit containing a kitchen and bathroom. (I.e. a duplex or triplex).

Negative Amortization :

A loan where the required payments do not cover the interest due on the loan. When the remaining interest is added to the principal balance, the loan amount increases.

Net Rental Income :

The remaining income from rents after all expenses have been deducted.

Net Worth :

The value of all of your assets, including cash, minus your total liabilities.

Non-Retirement Securities :

Publicly traded stocks, bonds, mutual funds, money markets, and CDs that are not part of a retirement account, such as a 401(k), IRA, Roth IRA or Keogh.

Notary Fee :

The fee required to have a legal document notarized by a Notary Public.

Note (promissory or mortgage note) :

A legal document agreed to by the borrower and lender acknowledging the debt and outlining the terms for repaying the loan to the lender on specified dates. A promise to pay.

Obligation to Income Ratio (OTI) :

A percentage derived by dividing a borrower's monthly payment obligations by his or her net or gross monthly income. Also called debt-to-income.

Obsolescence :

Loss of value from lack of features common to the area (e.g., no central heat in a northern city where it is common).

Occupancy Rate :

The percentage of units occupied.

Open-End Mortgage :

A mortgage where it is agreed the loan amount may be increased or reused.

Origination Fee :

Fee charged by a lender to cover the cost of handling the application and credit investigation relating to a loan application. The fee is often expressed as a percentage of the face value of the loan.

Other Fee :

A fee that is assessed based on either business-specific or state-specific requirements that do not fit into the existing line items on the Good Faith Estimate of Settlement Costs. A further explanation may be obtained from your Loan Counselor.

Other Tax Escrow :

Lender will collect taxes in advance to ensure that there is enough money in the escrow account to pay the taxes in full when due. The amount collected at closing depends on where the property is located and which month the loan closes.

Over-Improvement :

When a property is remodeled or renovated to a disproportionate size, or at a cost that is disproportionate to the value of comparable properties in a neighborhood.

Owner- Occupied :

A property where the owner maintains at least one unit of the property for his or her personal use.

Owners Policy :

Title insurance for the owner of the property, rather than the lien holder.

Priority Client Service :

A Merrill Lynch designation that recognizes the breadth of a client's relationship with the firm. (Consult your Financial Advisor to determine if your account carries this designation.)

Parent Power^®1 :

A Merrill Lynch Home Loans ^TM program offering up to one hundred percent (100%) financing on a primary residence where a qualified sponsor guarantees a portion of the borrower's loan and secures the guarantee with a pledge of eligible securities. Qualified sponsors are a family member or relative. No gift taxes and allows for the sponsor to maintain their investment strategy (with certain restrictions).

Partnership :

An arrangement between two or more persons to carry on a business together sharing the profits and losses. Partners have no separate interests in any partnership assets.

Pension :

A sum of money paid regularly as a retirement benefit.

Per diem Interest :

The daily interest that accrues from the date of settlement (closing) until the last day of that month. To arrive at the per diem figure, multiply the mortgage amount by the interest rate, and then divide that number by 360 days. Round up to the closest penny. EXAMPLE: Loan amount x Interest Rate / 360 days - $200,000 x 7.5% / 360= $41.667 Per Diem or $41.67.

Periodic Rate Cap :

The maximum amount a rate can adjust from one adjustment period to the next.

Permanent Loan :

Typically referring to the permanent phase of a construction-to-permanent loan.

Personal Property :

Property, other than real estate, that is owned by an individual.

PITI :

An acronym for a mortgage payment that consists of Principal, Interest, Taxes, and Insurance.

Pest Inspection :

A fee to cover the cost of termite, fungus, water, septic or other required pest inspections.

Planned Unit Development (PUD) :

A subdivision of homes that share common areas and have a covenants and restrictions agreed upon by the owners to maintain the look and feel of the development.

Plans and Specifications :

Architectural and engineering drawings for construction of a dwelling. They generally include a list of materials to be used in the construction.

Pledge :

An account containing eligible securities held in a Merrill Lynch, Pierce, Fenner & Smith account and used to collateralize a loan or credit account.

Pledge Amount :

The required market value of eligible securities necessary to obtain a loan, or line of credit. May vary based on Merrill Lynch Home Loans^TM guidelines. (See Initial Collateral Value)

Pledge Collateral Account :

An account in the form of a CMA^® SubAccount, CMA^® Account with the ML Consults Service or a Delaware (Cash) Account used to hold securities as collateral for a Mortgage 100^® or Parent Power^® loan. Accounts can be established in the name of an individual or joint account holders. Accounts established in the name of a trust must be reviewed and approved by Merrill Lynch Home Loans in order to be eligible.

 Pledge Release Value :

The amount listed in the Pledge Agreement that is signed by the client that the mortgage must be paid down to in order to release the pledged account(s).

PMI Premium (Private Mortgage Insurance) :

The fee is paid to a private insurance company for insurance that protects the mortgage lender against financial loss if the borrower defaults on the mortgage loan. It must be obtained in the event the LTV is above 80% on most conventional loans.

Points :

Upfront fee equal to one percent of the principal loan amount, which is charged by the lender. A "discount point" enables a borrower to buy down the interest rate.

Power of Attorney :

A legal document authorizing one person to act on behalf of another.

Preliminary Title Report (PTR) :

The initial title search that allows a title insurance company to issue a title binder or commitment.

Prepaid Interest :

Interest collected at closing to cover the interest from the date of closing through the end of the month in which the closing takes place.

Prepaying :

To pay down the principal balance of your mortgage before the agreed upon payment schedule.

Prepayment Penalty :

Fee paid to a lender for the privilege of paying off or paying down a loan before maturity. It is intended to compensate the lender for lost future income caused by early principal reductions.

Primary Residence :

A property where one unit is occupied by the owner for the majority of the year. This unit generally would not provide income to the owner and is the property that is used for Federal Tax reporting.

Prime Rate :

The prime rate as published daily in The Wall Street Journal "Money Rates" table.

PrimeFirst^® Mortgage:

A twenty-five year, adjustable-rate mortgage with interest-only payments for the first ten years, and amortizing payments for the remaining fifteen-year term. Available with a one-month or six-month adjustment period based on the LIBOR index. For more information on the costs associated with this product, please view our Important Loan-Cost Disclosures.

Principal :

The amount of money borrowed, excluding interest. Also the unpaid balance of a loan, excluding interest.

Principal and Interest (P & I) :

A mortgage payment generally consists of a portion of the payment going to repay the principal balance of the loan and the remaining amount going towards the interest amount due for use of funds. (Commonly referred to as a P&I payment.)

Property Address :

The street/mailing address of the property that will be reviewed for a mortgage.

Processing Fee :

A fee that covers the costs of the completion of a mortgage application and supporting documents for underwriting associated with processing the application. This is a flat fee and not based on the loan amount.

Property Tax :

A tax levied against the owner of real property by the local or state government.

Property Tax Reserves :

The amount collected by the lender at closing to fund the escrow account. The funds collected at closing will be combined with the monthly amount collected (1/12th of the annual bill amount) to pay the client's property tax(es) when it (they) comes due.

Property Type :

An industry recognized designation of a property's primary use, such as residential, commercial, owner-occupied, condominium or co-op.

Property Value :

The value of real property. Generally determined by the amount a buyer and seller agree upon at the time of sale with neither being under duress.

Proprietary Lease :

A lease used in a co-op that defines the shareholder's rights.

Purchase Agreement :

A written agreement between a buyer and seller of real property, setting forth the price and terms of the sale (sales contract).

Purchase Price :

The agreed upon amount in a fully executed purchase and sale agreement, between a buyer and seller for the exchange of real property.

Qualified Sponsor :

Quitclaim Deed :

A legal document transferring ownership of real property without representatives or warranties.

Radon :

An invisible odorless gas that enters dwellings through cracks or holes in basement floors.

Rate Lock :

An agreement to "lock in" or freeze an interest rate for a set period of time prior to the loan closing. The lock remains in effect even if interest rates go up or down during the agreed upon lock period. The agreed-upon rate will be in effect at closing provided the closing takes place prior to the expiration of the agreed upon lock period.

Real Estate Settlement Procedures Act (RESPA) :

The federal statute that governs real estate lending practices and certain disclosures. For example, RESPA requires a Good Faith Estimate of closing costs and the HUD settlement booklet be provided to a client within three days of application.

Real Property :

Land and objects permanently attached to it.

Realtor :

A person licensed to sell and/or lease real property, acting as an agent for others, and who holds an active membership in a local real estate board affiliated with the National Association of Realtors (NAR). "Realtor" is a registered trademark of the NAR.

Recording Fees :

A third party fee collected by the lender at the loan closing used for recording the mortgage with the local authorities or recording office, thereby making it part of the public records.

Recourse Loan :

A loan where the lender's ability to collect in the event of default extends beyond the property to reach the borrower's personal assets.

Refinancing :

The repayment of an existing loan debt through the proceeds of a new loan using the same property as collateral.

Release of Lien :

A legal document to discharge an existing lien.

Rental Income :

Funds received from allowing third party use of real estate. Generally the owner receives money from the third party in exchange for use of the property.

Required Closing Documents :

Documents that the lender requires you sign at closing to protect the security interest on real property and promise to re-pay the debt.

Rescission Period :

The period of time when the borrower may cancel a refinance or junior lien mortgage transaction on his/her primary residence. The normal rescission period is three days.

Residential Investment Property :

A residential property rented out or considered a primary or secondary residence for anyone other than the owner.

Revocable Trust :

A Trust that is established with a clause that allows the grantor to withdraw the trust.

Revolving Credit Line :

A line of credit set up to provide funds as needed from time to time. The line of credit is replenished as principal reductions are made. Funds may be accessed throughout the revolving term provided the client has not utilized the entire credit line balance.

Right of Survivorship :

The right of one joint tenant to inherit sole title to real estate upon the death of the other joint tenant.

Satisfaction of Mortgage :

The legal document prepared by the lender when a note is paid in full to remove their lien against the property.

School Tax :

A tax charged by local government to support the school system.

School Tax Escrow :

Depending on the school district in which the property is located, this amount is collected by the lender at closing to fund the school tax escrow account. The funds collected at closing will be combined with the monthly amount collected (1/12th of the annual bill amount) to pay the client's school tax bill when it comes due.

Second Home / Vacation Home :

A seasonal or vacation home for personal use that is not rented out.

Second Mortgage :

A mortgage made after another mortgage on the same property. The lien of the second mortgage is subordinate to the first one.

Securities Pledge :

Use of investments as collateral with Mortgage 100^®1  or Parent Power ^®1.

Securitization :

The process of selling mortgages on the secondary market in groups of loans called pools or REMICS (Real Estate Mortgage Investment Conduit).

Security Interest :

A lien against real property or assets as collateral for a loan. Assets may be forfeited if a borrower doesn't meet the obligations set forth in the agreement with the lender.

Separate Maintenance :

An allowance for support generally made under court order from one party to another usually after a legal separation.

Settlement :

The closing of a mortgage loan.

Settlement/Closing Fee :

This is a fee charged by the closing agent, attorney or title/escrow company for services rendered in connection with the closing.

Share :

Any of the equal parts into which the capital stock of a corporation or company is divided.

Simple Interest :

Interest computed only on the outstanding principal balance from time to time.

Social Security Payments :

A government benefit paid to the disabled or elderly in a monthly sum. Financed by Social Security withholdings from corporate payroll.

Specialized Home Financing (SHF) :

Department within Merrill Lynch Home Loans^TM that processes and deals with related functions related to the pledge account(s) such as substituting a pledge account or changing names of ownership on an existing pledge account(s) and other such related requests for Mortgage 100^®1 and Parent Power^®1.

Sponsor :

One who pledges assets as additional collateral for the benefit of another. Must be a family relative of the person for whom they are pledging assets.

State Tax/Stamps :

A tax charged by certain states and counties based on the amount of the home mortgage recorded. Stamps are issued in the mortgage amount and are affixed to the mortgage document prior to recording.

Subchapter S Corporation :

A corporate entity with less than 35 shareholders. Each shareholder must be a natural person not a corporation, trust, estate, etc. Established to avoid double federal income taxes. There is no federal income tax at the corporate level.

Subordination :

When a lender allows another lender to take a lien position ahead of their lien. This is common when refinancing a first mortgage lien and leaving your second mortgage lien in place. The holder of the second mortgage lien would need to subordinate to the new first mortgage.

Subsequent Monthly Payment :

The first payment amount after the fixed rate or interest-only period of a loan.

Survey :

A measurement and description of land prepared by a licensed surveyor. The survey shows the location of any structures on the land in relation to the property's boundaries.

Tax Deductibility :

The ability to deduct interest and/or charges from federal income tax. You should consult a tax adviser regarding the deductibility of interest expense.

Tax Lien :

A lien against the property for unpaid taxes.

Tax Pro-Ration :

Tax money owed to, or due from the seller for tax bills already paid or taxes already incurred.

Tax Search :

A part of a title search which determines if there are any unpaid taxes or assessments which may be a lien against the subject property.

Tax Service Fee :

A fee charged by a lender to annually verify if all taxes are current on real property. Protects the lender from unexpected tax liens that may be filed against the property.

Tenancy in Common :

An undivided ownership in real estate by two or more persons. The interests need not be equal, and in the event of death of one of the owners, no right of survivorship in the other owner's exists.

Term :

The period of time between the commencement date and termination date of a note, mortgage, legal document, or contract.

Term Adjustable-Rate Mortgage (ARM) :

An adjustable-rate mortgage with an initial fixed-rate period of 3, 5, 7, or 10 years, followed by an adjustable rate for the life of the loan term. They are available with interest only or amortizing payment options.

Third Party Doc Prep Fee :

A fee charged by the closing agent, attorney or title agency for preparing any additional loan or title related documents for closing.

Title :

Written evidence of the right to or ownership in real property. In the case of real estate, the documentary evidence of ownership is the title deed that specifies in whom the legal estate is vested and the history of ownership and transfers. The records of title are generally held in the local county recorder's office or courthouse.

Title Examination :

A fee charged by an attorney or title agency to examine title abstract/report, other public records and survey and to determine insurability and/or marketability on behalf of a title insurance company.

Title Insurance :

Insurance that provides an indemnity against loss or damage as a result of a defect in title ownership to a particular piece of property. Title insurance covers mistakes made during a title search as well as matters which could not be found or discovered in the public records, such as missing heirs, mistakes, fraud and forgery.

Title Insurance Binder :

A fee charged by the title insurance agency for preparing the title insurance commitment.

Title Report :

The report prepared after a title search to notify the lender who has title to the property and whether any liens or judgments are held against it.

Title Search :

A review of legal records to check the validity and completeness of the title to the property. This search will uncover any liens or other claims against the property.

Town house :

A row house on a small lot which has exterior limits common to other similar units. Title to the unit and lot is vested in the individual owner with a shared interest in common areas, if any.

Transfer Tax :

Taxes imposed by certain counties and states on the conveyance of title for real estate from one person to another.

Treasury Index :

The one-year Constant Maturity Treasury is the weekly average yield on United States Treasury Securities adjusted to a constant maturity of one year as published by the Federal Reserve Board in publication number H.15.

Trust :

When legal title to property is transferred to a trustee with the intention that the title will be held by the trustee for the benefit of another.

Trustee :

Person who holds legal title to property for the benefit of another.

Trust Fund :

A fund established for the beneficiary(ies) of the trust. Trusts may encompass real property or monetary funds. A trust is managed by a trustee.

Trust Fund Income :

The beneficiary of a trust generally receives income from the trust on a pre-arranged payment plan. This income is generally paid out monthly or annually. The beneficiary may have access only to the scheduled payments or may also be able to withdraw principal from the trust.

Truth in Lending Statement (TIL) :

Full, written disclosure of credit terms and conditions, including the finance charge, annual percentage rate, and other charges incurred in a loan transaction as required by the Truth-in-Lending Act (Regulation Z).

Under Construction :

Real property that is still in process of being built. This designation remains intact until the property is 100% complete and has received a Certificate of Occupancy.

Under Renovations :

Real property which is currently being re-modeled or renovated. (Generally would not include small changes like re-carpeting or re-painting.)

Underwriting :

The analysis of the risk involved in making a mortgage loan to determine whether the risk is acceptable to the lender. Underwriting involves the evaluation of the property as outlined in the appraisal report, and of the borrower's ability and willingness to repay the loan.

Underwriting Fee :

A fee charged to analyze the risk involved in the lending decision which covers the underwriting of the credit report, appraisal, collateral and title to ensure the borrower's willingness and ability to repay the loan.

Unexercised Stock Options :

Options to buy stock in a corporation that have not been used. Unexercised options are not considered an asset until they have been exercised and the person actually has shares of stock.

Usury :

The legal limit that is placed on the maximum rate of interest that a lender may charge.

Village Tax :

A tax charged by local government.

Village Tax Escrow :

Depending on the county, city, or district in which the property is located, this amount is collected by the lender at closing to fund the village tax escrow account. The funds collected at closing will be combined with the monthly amount collected (1/12th of the annual bill amount) to pay the client's village tax bill when it comes due.

Warranty Deed :

A deed used in many states to convey fee title to real property.

Water Tax :

A tax charged by local government.

Welcome Package :

Package provided by MLHL to the borrower that contains the following:

A Welcome Letter

A Good Faith Estimate of the closing costs

An Initial Federal Truth in Lending disclosure

Other required federal and state disclosures

A printed copy of the loan application with credit-related questions requiring your signature

A checklist of items needed for verification

Zoning :

The local government classifications for use of property in a given area.