Glossary

Uniform Commercial Code.

Generally refers to the first mortgage when there is a wraparound mortgage.

Detailed process of evaluating a borrower's loan application to determine the risk involved for the lender. Underwriting usually involves an in-depth analysis of the borrower's credit history, as well as an examination of the value and quality of the subject property.

A fee charged by some lenders to cover the cost of the lender's analysis of the risk associated with a loan. For our comparison purposes, an underwriting fee is considered to be a lender fee.

An ownership right to use and occupy property that is shared among more than one owner. No single co-owner may have exclusive rights or possession to any part of the property.

Group of laws that are applicable to commercial transactions. Only a few of the laws have relevance to real estate transactions.

A loan that is not backed by collateral.

FHA charges the borrower an Upfront Mortgage Insurance Premium (Upfront MIP) for most transactions to financially support the FHA program. This fee is a percentage of the principal loan amount and is due at closing. The full amount can be financed as part of the loan amount or paid in cash.

The annual fee is charged over the life of the loan in lieu of traditional mortgage insurance. The fee is based on the average unpaid balance of the loan and will vary from year to year.

USDA charges the borrower a Guarantee Fee on all transactions to financially support the Rural Housing program. This fee is a percentage of the principal loan amount and is due at closing. The full amount can be financed as part of the loan amount or paid in cash.