1003
The number assigned to the form all potential customers must complete to apply for a home loan. This application is commonly referred to as “the 1003” and is produced by the Federal government.
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1040 FEDERAL TAX RETURN
The Federal tax form used by U.S. citizens and residents to report their annual income to the Federal government. The 1040 tax return must be accompanied by any applicable schedules, which provide line-item detail of various sources of income. Schedule A details itemized deductions. Schedule B details investment income. Schedule C details business income. Schedule D details capital gains/losses. Schedule E details supplemental income, such as rental income. Schedule F details farming profit/loss.
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1065 FEDERAL TAX RETURN
The Federal tax form used by U.S. corporations to report their annual income to the Federal government.
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1099
A document that reports to the Federal government gross and net income earned by individuals who receive pension, social security or miscellaneous income, such as income from contract work. 1099s must be mailed to recipients by January 31 of each year for the previous year.
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1120 FEDERAL TAX RETURN
The Federal tax form used by U.S. partnerships to report their annual income to the Federal government.
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1st POSITION LIEN
A secured claim against a property that will be the first claim to be repaid should the property owner declare bankruptcy or default on the secured loan.
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2-4 UNIT PROPERTY
A property that consists of a structure that provides living space for 2 to 4 families, although a single mortgage or deed of trust evidences ownership of the structure. Ameriquest Mortgage Company lends money using 2-4 unit properties as collateral.
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3 Cs
Lenders consider three factors, credit, capacity and collateral when considering a credit application. Credit is the borrower’s proven willingness to repay a debt. Capacity is the borrower’s financial ability to repay a debt. Collateral refers to the property used to secure a loan transaction.
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30-DAY LATES, 60-DAY LATES, ETC.
Designations of the severity of mortgage delinquency. A mortgage payment is considered 30 days late when 2 payments are due. A mortgage payment is considered 60 days late when 3 payments are due.
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ABSTRACT OF JUDGMENT
A summary of the essential provisions of a court judgment which, when recorded in the county recorder’s office, creates a lien upon the property of the debtor in that county, both presently owned or after acquired.
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ABSTRACT OF TITLE
A history of a property’s title record used in some states to prepare the Preliminary or Title Commitment report. An Abstract of Title lists anyone who’s ever had a claim to the property, past and present. Some states require mortgage lenders to obtain a complete Abstract of Title. However, most states condense the abstract into a document called either the Preliminary or Title Commitment which lists only current claims to the property.
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ACCEPTED FEE APPRAISER PANEL
Panel of authorized fee appraisers that complete property appraisals for Ameriquest Mortgage Company loans.
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ACCRUED INTEREST
Interest on a note, bond, etc., which has been earned but not yet paid.
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ADDENDUM
An attachment to a contract, deed or other document that incorporates additional terms of information to the original.
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ADJUSTABLE-RATE MORTGAGE (ARM)
A mortgage loan where the interest rate is not fixed for the entire term of the loan, and can change during the life of the loan in line with movements of an index rate.
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ADJUSTABLE-RATE RIDER
A rider is an addition to a security instrument. The adjustable-rate rider outlines terms and conditions specific to an adjustable-rate loan. It must be recorded along with the security instrument at the county recorder’s office.
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ADJUSTMENT CAP
The adjustment cap limits the degree of interest rate changes during a specific period, during the life of the loan.
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ALIMONY
Periodic payments made under a divorce decree or a written separation agreement toward the support of a former spouse. Alimony may be taken as a deduction from adjusted gross income by the person who pays it, while the person who receives it must claim it as a taxable income.
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ALTA
An acronym for American Land Title Association. Commonly used in reference to a particular type of Title policy.
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AMERICAN LAND TITLE ASSOCIATION (ALTA)
An organization composed of title insurance companies, which has adopted certain insurance policy forms to standardize title insurance coverage on a national basis.
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AMORTIZATION
Payment of debt in regular, periodic installments of principal and interest, as opposed to interest only payments. Amortization is the process of reducing principal and interest in equal installment payments at specific intervals over a set term. For example, a fully amortized loan payment is a portion of which will be applied to pay the accruing interest on the loan with the remainder being applied to principal. Over time, the interest portion decreases as the loan balance decreases and the amount applied to principal increases so that the loan is paid off in the specified term.
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ANNUAL PERCENTAGE RATE
The Annual Percentage Rate ("APR") is a measure of the cost of credit, expressed as a yearly rate. The APR takes into account the amount financed, the finance charge, and the amounts and timing of the payments. Under the Truth in Lending Law, the APR must be disclosed and labeled.
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ANNUITY
Fixed payments an individual receives for a lifetime or specified number of years at consistent intervals. For example, a customer may receive an annuity from a pension plan or from an investment.
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APPRAISAL
Opinion as to the monetary value of the property. For example, an appraisal of property provides an idea of how much money the property is worth in the housing market at a given time.
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APPRECIATION
An increase in value. Example: An increased value of property due to either a positive improvement of the area or the elimination of negative factors.
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APR
Acronym for Annual Percentage Rate.
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AS IS CONDITION
Premises accepted by a buyer or tenant in the condition existing at the time of the sale or lease, including all physical defects.
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ASSESSED VALUE
Value placed upon property for property-tax purposes by the tax assessor.
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ASSUMPTION
An act that occurs when the buyer of a property assumes the sellers debt or obligation without obtaining new financing. This must be approved by the lender and be permitted under the terms of the note that the seller executed with the lender.
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ATTACHMENT
A legal process whereby the judgment creditor may obtain a lien against the debtor’s property.
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ATTORNEY CLOSINGS
This practice is prevalent in states where attorneys’ opinions are used in place of title reports. Closings by attorneys follow much the same procedures as escrow closings. The lender delivers to the attorney the settlement statement and the net loan proceeds, as well as instructions for their use.
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ATTORNEY IN FACT
A person given the authority to act on behalf of another under a power of attorney.
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ATTORNEYS OPINION OF TITLE (in absence of a title co.)
A statement issued by an attorney in states that don’t use a Preliminary Title Report or Title Commitment. All liens recorded against the property are disclosed in this statement. The attorney also advises on items that require completion to gain a clear title insurance policy before recording our security instrument.
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BACK-END DEBT RATIO
This refers to the borrowers debt ratio and is calculated using a borrower’s total of monthly payments due on credit obligations divided by the borrower’s gross monthly income. It’s expressed as a percentage.
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HAZARD INSURANCE
Insurance protecting real property against loss caused by fire, some natural causes, vandalism, etc., depending upon the terms of the policy.
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