A full-fledged debtor who owns part of the total loan amount or the property, but who is not the main borrower.
A score that the lender uses to assess the person’s creditworthiness. There are different credit rating scales. For example, on the CIPS scale, the credit rating can range from 250 to 900, where 250 represents a very poor credit rating, while 900 is very good. The credit rating can be determined based on the information available in the credit history of the individual and can affect the possibility to receive a mortgage loan.
A detailed history of the person's creditworthiness. The lender uses it to determine the borrower’s ability to repay the loan.
The total borrower's liabilities to the lender. Usually, it consists of the principal amount of the loan, accrued interest, contractual penalty and interest on arrears.
Debt to income ratio (DTI)
Also known as creditworthiness. The ratio that is developed to determine if the borrower can qualify for a mortgage. It is derived by dividing the borrower's total monthly obligations (including housing expenses) by his or her total monthly income.
A down payment is the initial payment made towards a real estate purchase and is the difference between the home's purchase price and the amount of the mortgage. Different loan types have different minimum down payment requirements, which are expressed as a percentage of the home's purchase price. A higher the down payment can lower the monthly mortgage payment.
A situation in which the debtor is no longer able to settle his or her debt obligations and can dispose of them by transferring his or her property to cover creditors' liabilities. Insolvency can be determined and confirmed by the court.
Also known just as the rate and is usually expressed as a percentage. A payment that needs to be paid for the use of credit. The interest rate is the sum of the index and the margin.
Interest rate change date
The date on which the rate change is taking place for mortgage loans with variable interest rates.
The process of analyzing the loan application to determine the risks related to issuing the loan. It includes a review of the potential borrower's credit history and the estimate of the property value.
Insurance coverage that compensates for material damage caused to the property. The reasons could be fire, wind or other natural disasters, damage caused by your own or third-party action, etc.