B BALLOON (PAYMENT) MORTGAGE - usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract.

BIWEEKLY MORTGAGE - a type of fixed-rate mortgage with payments for half the usual monthly amount scheduled every two weeks. Because you make the equivalent of 13 months of payments every year, the loan term is shortened from 30 years to 18 or 19 years, and total interest cost are substantially lower.

C CAPS - consumer safeguards for adjustable-rate mortgages that limit the amount monthly payments can increase. An interest rate cap limits the amount the interest can change, while a payment cap limits the increase in monthly payment to a specific dollar amount.

CASH FLOW - the amount of money you have available after monthly debt-servicing.

CASH OUT - to turn some of your house equity into cash through a house equity loan; this is to use the financial power in your house as an investment vehicle in addition to a "home" for you and your family.

CLOSING - the event of getting all paperwork appropriately recorded in the official County Recorders office, for the County in which the real property is located.  If a Purchase transaction the meeting between the buyer, seller and lender (or their agents) where the property and funds legally change hands. Also called settlement.

CLOSING COSTS (LOANS) - the costs and fees associated with the official change in ownership of the residential real property and with obtaining your mortgage that are assessed at the closing or settlement. Closing costs normally are itemized and charged per item, many are billed by outside vendors to the transaction, escrow, title insurance, notary fee, tax service and flood certification fees, underwriting, processing, document preparation, photo inspection, real estate appraisal, appraisal review, administration fees, courier, wire transfer fees, recording fees, insurance, taxes and other fees. Sometimes lenders or brokers offer No Closing Cost Loans.  Don't be fooled. You're paying them somehow, they're simply hidden from you right now.  Why?  Because closing costs (from outside vendor/suppliers) are easily $1,000 to $1,500 or more per transaction - there's No Free Lunch.** SEE GOOD FAITH ESTIMATE BELOW **

CLOSING COSTS (EQUIPMENT LEASES) - the costs and fees associated with the closing of the commercial business equipment lease transaction, are negotiated individually as between Lessor and Lessee. These are generally minor and limited to a small administration fee, document preparation fee, and any physical inspection fees (in some limited cases).

COLLATERAL - (LOAN) the real property offered as security for a loan; (LEASE) the equipment obtained by the Lessor, which is selected by and  leased to the Lessee.

COMBINED LTV - the way a lender calculates the (C)LTV on a home equity loan; it is based on the sum of the debts on both mortgages, compared to the fair market value of your home. Up to 80% is common, above that percentage isn't.

CONFORMING AND NON-CONFORMING LOANS - types of loans available to different categories of borrowers: while conforming loans follow the strictest guidelines for eligibility as to credit score, rates, income and residence stability, savings and reserves habits etc. Conforming therefore is for that limited group of customers who are PERFECT.  From it's beginning AMCI has specialized in non-conforming (subprime) loans (we call them loans for "real people"). These are now offered in the form of a range of programs which are tailored to individual circumstances. We know People who are not absolutely PERFECT.

CREDIT RATING - a level assigned to you in determining your eligibility for loans & leases, based on your record of payment on financial obligations, your income level, and the amount of available collateral. Order yours.

CREDIT REPORT - a report that documents a borrower's credit history and current status, published by three credit repositories. Pursuant to the Federal Fair Credit Reporting act (formerly Title VI CCCP) borrowers can obtain a copy of their credit report from the credit repository facility (NOT from a lender or loan broker) and examine their own credit report.   Borrower rights to view their own individual and personal report run only to the credit repositories, not to a potential credit grantor. No one in the lending/ leasing cycle is lawfully allowed to give you a copy of it or let you view it.  Contact the "bureaus", they have toll-free telephone numbers and they're responsive. PLUS if there are errors, ONLY they can fix them - and by law they MUST.

CREDIT SCORE(S) - the three major credit repositories Experian, TransUnion, and Equifax have a score ranking level assigned to each customer in their credit files.  This score is their version of who's more, and who's a less risky loan candidate. All three are different, different amounts, different numbers, and they are compiled from different ingredients. The "math" they use is their conclusion as to the "risk in advancing credit to a particular individual" -- their opinions differ. These scores change in significant amount DAILY, and sometimes in a major way at month end as well.  "IF" you heard one of your three "numbers" from somebody last week, although it could still be "close" to that number now, actually it means nothing today to a new lender!  Most lenders and loan brokers utilize the middle score out of the three (but many of the newer funding programs use the "primary repository" instead), for the primary income earner (the potential  loan individual who earns the most money).  After more than 30 years of computerized study and millions of borrowers tested and tracked, it has been scientifically shown that a medium score at 600, means the lender will lose money on one out of every eight loans it makes.  A score of 700 for example, means the lender will lose money on one out of every 1,293 loans it makes!  IF YOU were a lender and had the opportunity to make all that "interest" (or not), what score would you want from customers that YOU made loans to with your own money?? Order yours.

CREDITWORTHINESS - your credit history, which contains information about your borrowing habits and money-management skills, and which determines a lender's decision about what level "risk," or credit grade, to assign you - or even whether the loan should be made.


D DEBT CONSOLIDATION - paying off, with the proceeds from a refinance or home equity loan, all or most of your higher-interest debts, such as credit card balances.  Clearly the most popular type of homeowner type loan in decades - - saves hundreds of dollar monthly and is generally completely tax deductible. Today these loans are ranging typically in the $30,000 to $50,000 size.  Monthly family budget relief in the $300 to $600 range or more are typical.

DEBT SERVICE - the combined principal and interest you pay on loans each month.

DEBT-REDUCTION PLAN - a strategy recommended for those borrowers wishing to use the smart idea of a home equity loan for debt consolidation.  Be careful not to run up credit cards again, could cost you lost time.  Be prudent, it's easy once you're on top of it.

DEBT-TO-INCOME RATIO - the ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her net effective income (FHA/VA loans) or gross monthly income (conventional loans). If 35% or more of your gross monthly income is going out in bill paying, you're a prime candidate for a bill consolidation.

DEFAULT - failure to make payments as agreed to.

DOWN PAYMENT - an amount paid in cash to the seller when a home is purchased. The down payment is the difference between the purchase price and the mortgage amount, and is traditionally 10 to 20 percent of the purchase price, although many loans are now available with smaller down payments, and in some cases (with decent/average credit scores) No Down Payment is needed. Typically, weaker credit background means more down payment will be needed; better historical credit backgrounds means low or no down payment may be required by the lender when buying a home. NO (or very little) DOWN PAYMENT PLUS NO (or very little) GOOD CREDIT -- MEANS NO LOAN. Bad credit and no down payment, you'll be a renter for quite a while longer.

E EARNED AND UNEARNED INCOME - two different sources of income: while earned income comes from wages, salary or business profits, unearned income refers to interest, dividends, rental income, pension benefits, and the like.

EQUITY - the difference between the fair market value and current indebtedness, also referred to as the owner's interest.

ESCROW - a special account set up by the lender in which money is held to pay for taxes and insurance. "Escrow" can also refer to a third party who carries out the instructions of  both the buyer and seller to handle the paperwork at the settlement.

F
FAIR MARKET VALUE - the likely selling price of your home, as appraised.

FF&E- "Furniture, Fixtures & Equipment", a phrase often used in commercial equipment leasing. A combination of items like "furniture" (in lobby of dentist, lawyer), "fixtures" (liquor store room mounted central air conditioner, security system, shelving for book store) & "equipment" (bakery baking equipment, restaurant walk-in refrigerator/freezer) commonly utilize commercial small business equipment finance-lease structures.

FHA (FEDERAL HOUSING ADMINISTRATION) MORTGAGE - a loan insured by the Federal Housing Administration. FHA mortgages require lower down payments than conventional mortgages, and also feature less stringent income and financial requirements.

FIRST AND SECOND MORTGAGES - the documents that entitle a lender to the property that secures the loan if the borrower fails to meet his obligations per the loan arrangement. While your first mortgage enables you to buy your home in the first place, a second mortgage provides for refinancing and literally hundreds of different lifetime opportunities (see difference between "mortgage" and "trust deed").

FIRST LIEN - primary claim by the lender for satisfaction of outstanding debt. Gives lender the right to raise this money by foreclosing property if you fail to make payments you've agreed to.

FIXED AND ADJUSTABLE RATES - the way the interest on your loan is determined. A fixed rate of interest stays the same over the life of the loan; an adjustable (or "variable") rate changes, increasing or decreasing periodically according to an index which reflects general trends.

FIXED-RATE MORTGAGE - a mortgage with an interest rate that remains constant for the life of the loan. The most common fixed-rate mortgage is repaid over a period of 30 years; 15 year fixed-rate mortgages are also available.

FREEDOM LOAN - Lower your rate.  Increase your reward.  The Freedom Loan is the only loan that let's you lower your interest rate up to 3.25 percent in just four short years. Just make your payments on time and your interest rate will reduce automatically, saving you potentially thousands of dollars in interest over the life of your loan. And you stand to save even more every year because the interest you pay may be tax-deductible. Following is the actual "fine print," from the national funding source partnership arrangement we utilize for this funding plan, right from their lawyers! 

FULL INCOME VERIFICATION - a requirement for fully documented proof of income; loans that contain this
requirement can usually offer lower interest rates than formal-income verification programs.


G
GOOD FAITH ESTIMATE - a written estimate, you must sign, that the  lender/loan broker must present to you within 3 days of when he receives your consumer residential real property loan application package.  It is a government required document and must contain a detailed itemization of what the lender/loan broker proposes to charge you. Although it is not the "final word", it must be the lender/loan broker's "best estimate" of the proposed transaction they think you'll qualify for. Some folks think "closing costs" can be negotiated, which to a small degree may be true, however most of them the lender/loan broker has no control over. A great deal of the "costs" are paid over to various vendor/suppliers. This document is where they're detailed for you, early enough in the process for you to understand/compare.


H HOME EQUITY - the part of your home that you own outright; right now.  That is, the difference between its appraised value and the  balance of your mortgage loan(s). Using that "equity" for a loan has been commonly called a "second mortgage" for years; today's term more accurately - a home equity loan.

I

INDEX - an economic indicator, usually a published interest rate, that determines changes in the interest rate of an ARM ARM rates are adjusted to reflect changes in the index. The margin is the amount a lender adds to the index to establish the actual interest rate on an ARM.

INTEREST (LOANS) - the sum paid for borrowing money, which pays the lender's costs of doing business along with repaying the lenders source of money as well. "Interest Rates" are typically a function of market conditions, expenses, and borrower risk of loss probability. For example, all things being equal, if you compared same exact loan - lender to lender to lender, they'll normally cost almost the same.

INTEREST (BUSINESS EQUIPMENT FINANCE-LEASES) - there is NONE. That's right, none, zero, zip .... none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none,   none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none, none  . . . . this is not a trick, there is NO INTEREST CHARGED.

L

LENDER BUY-DOWN MORTGAGE - a convertible mortgage offering a discounted interest rate at the beginning of the loan that gradually increases to an agreed-upon fixed-rate over the first few years of the loan. It provides lower initial payments and a stable final monthly rate, but the final rate may be somewhat higher than on a standard fixed-rate mortgage.

LOAN APPLICATION - typically a combination of standardized government forms and forms provided by the lender - 1003 the most popular one, you've seen many times. A shorter easier preliminary one, is at our ONLINE (LOAN or EQUIPMENT LEASE) APPLICATION section of this Website.

LOAN ORIGINATION FEE - the fee charged by a lender/broker (sometimes called "points") to make the funds available to you, an off-set of its marketing and overhead expenses.

LOAN PROCEEDS - part of the money you borrow.

LOAN-TO-VALUE RATIO - the relationship between the amount of the consumer residential real estate mortgage loan and the appraised value of the property expressed as a percentage. In some cases AMCI funds loans at LTV's in excess of 100%, called 125'ers, no equity, or partially secured lending. 125% loans however, require a strong credit score (national average score is 689 for 125'ers customers), with very few (if any) modest negative credit items in your credit report file.

LOAN TYPES: Conforming - - Conforming loans refer to a residential real estate loan in amounts that conform to government service standards as determined by Fannie Mae & Freddie Mac (the original government agencies, set up in the early 1940's, established to help people finance new homes). Conforming loans range in amount form $1 to $252,700. Although not all conforming loans are serviced by these government agencies, the mortgage industry has adopted the term to express loan amounts in this range. These generally are "quoted" as the lowest rates you see (to get your attention).   Normally utilized for purchasing a home with a 20% down payment, loads of documentation needed, and nearly perfect credit is required.  The quoted low rates are wonderful sounding "BAIT", but not everyone is "CONFORMING".  Don't get 'BAITED' then "Switched".

Jumbo (Non-Conforming) - Jumbo loans refer to those loan amounts outside of the "conforming" range or, above $252,700.

M

MANUFACTURED HOME - factory built or pre-fabricated housing including mobile homes

MARKET VALUE - the highest price that a buyer and the lowest price that a seller would accept, neither one being complelled to buy or sell; also called Fair Market Value.

MAXIMUM LOAN AMOUNT - highest loan dollar amount allowed under Federal or conventional guidelines.  In commercial real estate, the highest loan dollar amount that a property can support based on projected income.

MECHANIC'S LIEN - a claim created by law to secure priority of payment for work performed and materials provided by a vendor.  Land may be attached as well as building, equipment or other property.

METES AND BOUNDS - a description of a parcel of land in a deed in which the boundaries are defined by directions and distances.

MINIMUM PROPERTY STANDARDS - regulations and guidelines used as underwriting criteria that set forth acceptable property standards and specifications.

MOBILE HOME - a factory-assembled residence consisting of one or more modules in which a chassis and wheels are an integral of the structure, and can be readied for occupancy without removing the chassis and/or wheels.

MODULAR HOME - a factory-assembled residence built in units or sections, transported to a permanent site and erected on a foundation.  Excludes mobile homes.

MORTGAGE - a pledge of property, especially real property, s security for a debt.  In many States this document is a Deed of Trust.  The document may contain the terms of repayment of the debt.

MORTGAGE BANKER - an individual, firm or organization that originates, sells and/or services loans secured by mortgages on real property.

MORTGAGE BROKER - a firm or individual who, for a commission, matches borrowers and lenders

MORTGAGE COMMITMENT - an agreement between lender and borrower detailing the terms of a mortgage loan, such as interest rate, loan type, term and amount.

MORTGAGE INSURANCE (MI) - insurance which protects mortgage lenders against loss in the event of default by the borrower.  This allows lenders to make conventional refinance loans at higher loan-to-value rations, and purchase money loans with lower down payments.  The Federal government offers MI through HUD/FHA; private entities offer MI for conventional loans.

MORTGAGE INSURANCE CERTIFICATION - certificate issued by HUD/FHA as evidence that a mortgage has been insured and that a contract of mortgage insurance exists between HUD/FHA and the lender incorporating HUD/FHA regulations identified in the certificate.  There is a premium payment, paid by the borrower for this.

MORTGAGE INSURANCE PREMIUM (MIP) - the amount paid by a mortgagor (borrower) for mortgage insurance either to FHA or a private mortgage insurance company.

MORTGAGE NOTE - a written promise to pay a sum of money at a stated interest rate, during a specific term.  A mortgage note is secured by a mortgage.

MORTGAGEE - the lender in a mortgage transaction

MORTGAGEE CLAUSE - a clause that may be attached to an insurance policy stipulating that the lender will receive a portion of insurance proceeds sufficient to satisfy the unpaid amount of a loan in the event of loss.

MORTGAGOR - the borrower in a mortgage transaction who pledges real property as a security for a debt.

MULTIPLE LISTING SERVICE (MLS) - a service provided by the Board of Realtors which enders access to real estate listings of properties for sale or lease.

O

ORIGINATION FEES - the fee charged by a broker/lender (sometimes called "points") to make the funds available to you, an off-set of its marketing and overhead expenses.

P

PAR - a price of 100 percent of face value

PARTIAL PAYMENT - in loan collection, receipt of less than the full payment due

PAYOFF FIGURES - the unpaid principal balance, plus any negative escrow amounts, plus accrued and unpaid  interest, late charges, prepayment penalties, and other possible fees, to be used for payment in full of a mortgage or other lien.

PERMANENT FINANCING - a mortgage loan usually covering development costs, interim loans, construction loans, financing expenses, that is put in place when the property is completed.

PERSONAL PROPERTY -  any property that is not real property (dirt).

PHYSICAL DEPRECIATION - decline in the value of a physical asset or real property, resulting from normal usage, age, wear and tear, disintegration or action of the elements.  Depreciation can be curable or incurable sometimes.

PIGGY-BACK LOAN - the combination of both a first and second mortgage being recorded concurrently on a single piece of property.  A single mortgage lender may originate both loans, or the loans may be originated by two different lenders.. In either event, the two loans are recorded by priority.

PITI (PRINCIPAL, INTEREST, TAXES AND INSURANCE) - the four components that (for most homeowners) are included in the monthly mortgage payment. Principal and interest are the portions of the payment assigned to repay the mortgage itself; taxes and insurance are paid by your lender into a special escrow account to pay for homeowners insurance and property taxes.

POINTS (LOAN DISCOUNT POINTS) - prepaid interest on a mortgage that is usually paid at the time of closing. Each "point" is equal to one percent of the total amount of a mortgage (one point on an $80,000 mortgage is $800, or 1 percent of 80,000). Most lenders offer mortgages with several combinations of points and interest rates; generally, the lower the interest rate, the more points you will pay at settlement, and the shorter the loans term will be. Don't mix-up "points" and "closing costs" in your mind (** SEE GOOD FAITH ESTIMATE **).

POINTS (typical) - the residential first mortgage  market today: for absolutely 100% PERFECT applicants is in the zero to one point range, subprime customers (about 60% of everybody else on planet Earth) are charged generally one to three points, while second mortgages are often in the 5 to 10 point range at most home equity specialty companies (since the loans are usually smaller and are a bit more risky than first mortgages), when customers are looking for higher Combined LTV's (CLTV).

PRE-APPROVAL OR PRE-QUALIFICATION (prequal) - an early assurance by a lender/loan broker that you appear to meet the requirements for a specific type of loan. Unless subsequent supporting documentation doesn't adequately confirm the initial supplied information, "prequals" rarely change.

PRE-PAYMENT PENALTY - BUSINESS EQUIPMENT FINANCE LEASES - no such additional fee imposed by  Lessor is normal in industrial & commercial equipment finance leases; commonly the transaction can not be terminated prior to the payment in full of all agreed upon payments. Therefore in one sense, "paying off early" is allowed; they're just no penalty for doing so.

PUD (Planned Unit Development) - a comprehensive development plan for a large land area.  A PUD usually includes residences, roads, schools, recreational facilities, commercial office and industrial areas.  Also, a subdivision having lots of areas owned in common and reserved for the use of some or all of the owners of the separately owned lots.

Q

QUOTE - see rate shopper below

R

RATE SHOPPER - someone, like all of us, who wants VALUE of their buck.  Unfortunately the "rate" is not the central difference as between any two lenders or by your credit score (which changes daily - see credit score above), the lien position (first or second mortgage,) proposed loan size, dollar amount of real estate appraisal, property marketability, repair and condition, it's uniqueness to the neighborhood, your income source(s) and their long term stability, your historic income stream, your past and present credit records, it's depth, variety and quality, your capacity to be able to repay the loan according to the terms dictated by the lender, and most importantly the overall common sense of your request and the "reason" for the loan (purchasing, re-finance [no cash-out], equity advance, bill consolidation, home improvement etc etc.).  For any "rate quote" to even be remotely close to the final numbers, you need to supply the lender/broker with a COMPLETE application and have a three (3) credit bureau merged credit report run on you (and any other applicants) for the lender/

REFINANCING - securing a new loan in order to pay off your existing mortgage or gain access to the existing equity in your home.

RETIRE - to pay off the outstanding balance of a first mortgage with the proceeds from a second mortgage.

S

SELF-EMPLOYMENT INCOME - the net earnings from your business or profession, determined by subtracting business expenses from gross tax return reported  income.  For lending documentation purposes, if you didn't pay taxes on it, you didn't earn it.

T

TITLE INSURANCE - a contract by which the insurer agrees to pay the insured a specific amount for any loss caused by defects of title to real estate, wherein the insured has an interest as purchaser, mortgagee or otherwise.

TITLE SEARCH - an examination of public records, laws and court decisions, to ensure that no one except the current owner has a valid claim to the property, and to disclose past and current facts regarding ownership of the subject property.

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

TRUSTEE - one who holds legal title to property for the benefit of another, or to secure performance of a specific obligation.

TRUTH-IN-LENDING ACT (TILA) - the Federal Truth-in-Lending Act (PL. 90-321, 15 USC 1601 et seq.)  Part of the Consumer Credit Protection Act of 1965, a Federal law that requires lenders to provide full written disclosure of credit terms and conditions, the finance charges, the annual percentage rate (APR), and other fees and charges incurred in a consumer loan agreement.

U

UNDERWRITING - the process of deciding whether to make a loan based on credit, employment, assets and other factors.   CHARACTER - CAPACITY - COLLATERAL - COMMON SENSE. Similar factors are utilized in business equipment leasing, including equipment purchase price, how fast does it become obsolete, it's residual value, how will it pay for itself?



V

VA (DEPARTMENT OF VETERANS AFFAIRS) MORTGAGE - government insured loans guaranteed by the Department of Veterans Affairs, requiring very low or no down payments and with generous requirements for qualification. They are available only to veterans of the armed services, those currently on active duty or in the reserves, and their spouses.

VACANCY RATE - the ratio between the number of vacant units and the total number of units in a multi-tenant building or development.

VA FUNDING FEE - a fee the VA charges to guarantee a residential real estate mortgage loan

VA LOAN - mortgage loan made by an approved lender and guaranteed by the Department of Veterans Affairs.  VA loans are made to eligible veterans and those currently serving in the military and can have a lower down payment than other type loans.

VALUATION - the estimation of a property's price through appraisal.

VERIFICATION OF DEPOSIT (VOD) - a form that requests and secures verifications of amount on deposit at financial institutions.

VERIFICATION OF EMPLOYMENT (VOE)  - a form that requests and secures documentation of a mortgage applicant's work history and/or occupation, to assist in the lender's credit investigation.