Graduated Payment Mortgage - A residential mortgage with monthly payments that start at a low level and increase at a predetermined rate.
Gross Rent Multiplier - A number that reflects the ratio between the sales price of a property and its gross monthly rents. It is used in the income approach of appraising property.
GRIGraduate Realtors Institute - A professional designation granted to a member of the National Association of Realtors who has successfully completed three courses covering Law, Finance and Principles of Real Estate.
Home Inspection Report - A qualified inspector’s report on a property’s overall condition. The report usually includes an evaluation of both the structure and mechanical systems.
Home Warranty Plan - Protection against failure of mechanical systems within the property. Usually includes plumbing, electrical, heating systems and installed appliances.
Index - A measure of interest rate changes used to determine changes in an ARM’s interest rate over the term of the loan.
Joint Tenancy - An equal undivided ownership of property by two or more persons. Upon the death of any owner, the survivors take the decedents interest in the property.
Land Contract - A contract ordinarily used in connection with the sale of property in cases where the seller does not wish to convey title until all or a certain part of the purchase price is paid by the buyer.
Lien - A legal hold or claim on property as security for a debt or charge (i.e. judgements, taxes, mortgages, deeds of trust, etc.).
Loan Commitment - A written promise to make a loan for a specified amount on specified terms.
Loan-To-Value Ratio - The relationship between the amount of the mortgage and the appraised value of the property, expressed as a percentage of the appraised value.
Margin - The number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment.
Marketable Title - Merchantable title free and clear of objectionable liens or encumbrances.
Mechanics Lien - Under California law, workmen who provide materials and/or labor to a property owner who is improving his property are entitled to use the real property to satisfy the debt. This type of lien also alerts the selected title company to the possibility of on-going construction work which may affect the priority of a new Deed of Trust.
Mortgage - An instrument recognized by law by which property is hypothecated to secure the payment of a debt or obligation, procedure for foreclosure in event of default is established by statute.
Mortgage Life Insurance - A type of term life insurance often bought by mortgagors. The coverage decreases as the mortgage balance declines. If the borrower dies while the policy is in force, the debt is automatically covered by insurance proceeds.
Multiple Listing - Multiple Listing is the name given a service performed by the local Board of Realtors (Multiple Listing Service). MLS provides necessary information to aid in the sale of listings. It is a marketing tool used by members of the service to expose properties to a wider market base.
Negative Amortization - Negative amortization occurs when monthly payments fail to cover the interest cost. The interest that isn’t covered is added to the unpaid balance, which means that even after several payments you could owe more than you did at the beginning of the loan. Negative amortization can occur when an ARM has a payment cap that results in monthly payments that are not high enough to cover the interest.
Origination Fee - A fee or charge for work involved in evaluating, preparing and submitting a proposed mortgage loan. The fee is limited to one percent for FHA and VA loans.
Personal Property - Any property which is not real property, (i.e. money, savings accounts, appliances, cars, boats, etc.)
PITI - Principal, interest, taxes and insurance
Planned Unit Development (PUD) - A zoning designation for property developed at the same or slightly greater overall density than conventional development, sometimes with improvements clustered between open, common areas. Uses may be residential, commercial or industrial.