Please, let First Pacific Financial assist in reaching your homeownership dreams!
Why choose First Pacific Financial for my Manufactured or Mobile Home financing?
First Pacific Financial has many years of Manufactured and Mobile Home industry knowledge and financing expertise. First Pacific Financial specializes in financing for Manufactured and Mobile Homes. First Pacific Financial is a seasoned leader in Manufactured and Mobile home financing in California, providing extraordinary service while helping homeowners reach their dreams. Finally, First Pacific Financial offers a wide range of Manufactured and Mobile Home financing products and programs for new and existing (Pre-Owned/Used) Manufactured and Mobile Homes to meet each Borrower’s unique needs.
So what is a Manufactured Home?
The term “Manufactured Home” specifically refers to a home built entirely in a protected environment under a federal code established by the US Department of Housing and Urban Development (HUD). Manufactured Homes are NOT Mobile Homes. The term “Mobile Home” describes factory-built homes produced prior to the June, 1976 HUD Code enactment. The HUD code requires each Manufactured Home to meet the following requirements:
- Built as a one, two or three section home in an environmentally controlled center which is then transported to the home site on a frame.
- Meets the strict HUD code for design and construction, durability and strength, fire resistance, transportability, energy efficiency and quality.
- Built on steel beams with wheels under each section.
- Meets the high standards for heating, plumbing, air conditioning and thermal and electrical systems performance.
- Passes stringent third party inspections.
Today’s Manufactured Homes are built with the same materials as site-built homes, but in a controlled factory environment using the latest in computer-assisted design. They come with “standard” features that you would find in a site-built home and today’s manufacturers offer a variety of floor plans and designs which can include vaulted ceilings, state-of-the art kitchens, fireplaces, master suites, walk-in closets, and bathrooms with recessed bathtubs and whirlpools. Your Manufactured Home can be completely customized to fit your lifestyle and budget.
What are the advantages of purchasing a Manufactured Home?
Manufactured Homes can deliver outstanding quality and performance at 10 to 35 percent less per square foot than conventional site-built homes. Manufactured Homes offer all the quality and amenities you want at a price you can afford. Manufactured homes are the only housing in America built to a national building code. Because manufacturers use the latest in computer-assisted design, you have the flexibility of customizing your home’s floor plans, interior finishes, and exterior designs. Your lifestyle and your budget are the only limitations to the options available to you.
How will I determine which Manufactured or Mobile Home financing product or program is correct for me?
First Pacific Financial provides extraordinary service while helping homeowners reach their dreams. This means, First Pacific Financial applies our many years of Manufactured and Mobile Home industry knowledge and financing expertise to tailor a financing solution to your specific needs. Our experienced staff takes the time to clearly explain the advantages of applicable financing products and programs and how those financing products and programs will help you meet your goals.
Does the Manufactured or Mobile Home have to be on permanent foundation?
For Manufactured and Mobile Home Chattel (Personal Property – Home Only or In-Park) financing, a permanent foundation is not required. This allows borrowers to site their Manufactured and/or Mobile Homes on private property as well as in a Manufactured and/or Mobile Home parks/communities. For Manufactured Home Real Estate (Real Property – On Land) financing, a permanent foundation is required for FHA, Conforming, and VA loans. This allows borrowers to use the Manufactured Home and the land the Manufactured Home is placed as collateral for the financing.
Where do I close my loan?
First Pacific Financial closes all loans through escrow. Escrows are handled by local escrow and title companies chosen by the buyer and seller in a purchase transaction and the borrower, First Pacific Financial, and lender in a refinance transaction. The escrow company is an unbiased third party to the transaction that can also usually provide notary services, document preparation, recording, etc.
What documentation/information does First Pacific Financial need from me
First Pacific Financial need the following (as applicable);
- Agent Information
- Name, phone, and email address of any Real Estate Agents involved in purchase
- Name, phone, escrow #, and email address of Escrow Company and/or Officer
- Purchase Information
- Correct address for Subject Property and APN
- Year, make, model, dimensions (LxW)
- Income Documentation
- 2 most recent w-2 forms (Last 2 years)
- Pay stubs for 2 full months
- Award letters for Pension, Retirement, Disability, or Social Security Income
- 2 months statements (All Pages) from each account showing monthly deposits of Pension, Retirement, Disability, or Social Security Income
- Down Payment/Asset Documentation
- 2 months statements (All Pages) from each account used to fund Down Payment
- Gifted Down Payment Documentation
- FROM GIFTOR: 2 months statements (All Pages) from each account used to fund Gift
- Gift Letter (First Pacific Financial can provide Gift Letter to be signed by Giftor)
- Personal Identification Documentation
- Clear photo copies of Driver’s License and Social Security Card
The above apply to all borrowers.
Who orders the appraisal, title work, loan closings and etc.?
Where applicable, First Pacific Financial will order all necessary pre- and post-closing requirements for the borrower’s financing, including flood certification, appraisal, tax certification, site inspection, title search, etc.
Is homeowner’s insurance required and how much?
Yes, as a condition of closing the borrower must provide proof of one year full coverage. The borrower may choose the homeowner’s insurance agent/provider or First Pacific Financial can, as needed, recommend homeowner’s insurance agents/providers that specialize in homeowner’s insurance for Manufactured and Mobile Homes.
How long does it take between application and closing?
Typically 30 days or less for Manufactured and Mobile Home Chattel (Personal Property – Home Only or In-Park) purchase/refinance financing. Typically 30 days or less for existing Manufactured Home Real Estate (Real Property – On Land) purchase/refinance financing. Typically 60-90 days or less for new Manufactured Home Real Estate (Real Property – On Land) purchase financing. Of course, all transactions are unique and the time it takes to close the transaction depends on the transaction’s specific complexities and the commitment of all the parties involved. In all cases, the faster everyone involved responds to requests for required information/documents, the faster we will be able to close.
How do I get started?
At First Pacific Financial you can get started by calling our expert staff at 1-800-460-0019, or printing, completing, and returning via fax or email on of our applications, click here for forms, or applying online.
First Pacific Financial understands that there are more questions than what is included above. Our staff is prepared to answer all of your additional questions. Please contact First Pacific Financial by clicking here, Contact Us
First Pacific Financial Forms
- First Pacific Financial Printable Long Application
- First Pacific Financial Printable Quick Application
- First Pacific Financial Printable Spanish Application
- First Pacific Financial Client Introduction – Needs
- First Pacific Financial Borrower’s Certification & Authorization
- First Pacific Financial Loan Comparison Flyer Example
Adjustable Rate Mortgage – A mortgage on which interest is payable at a rate that varies according to a predetermined formula based on a national economic index and the lender’s margin.
Amortization – Loan payment by equal recurring payments, calculated to pay off the debt at the end of a fixed period as well as the accrued interest on the outstanding balance. The loan is repaid through regular, monthly payments of principal and interest paid for a predetermined amount of time.
Amortization Schedule – A timetable for payments of a mortgage showing the amount of each payment that is applied to interest & principal.
Annual Percentage Rate (APR) – Interest rate reflecting the total cost of credit on a yearly basis after all charges are taken into consideration.. This rate is usually higher than the stated note rate on the mortgage, because it takes into account points and other credit costs. The APR allows homebuyers to compare different types of mortgages based on the annual cost for each loan.
Appraisal – An estimate of the value of property, made by a licensed professional called an appraiser. The appraiser will use comparable sales that will be adjusted against the subject property to determine fair market value. This value is then used by the lender to determine the loan amount.
Appreciation – An increase in the value of a home (Including Manufactured and Mobile Homes) due to change in market conditions, home improvement or other factors.
Assessed Value – The value placed on a home by a public tax assessor for the purpose of determining property taxes.
Asset – Anything that has monetary or exchange value that is owned by an individual, business or institution. Assets include real estate property, personal property, vehicles, bank accounts, stocks, mutual funds, retirement accounts. etc.
Automated Underwriting – A computer-based method that enables mortgage lenders and brokers to process a loan application more quickly by using credit scores and other loan application data to make a recommendation on whether or not to extend a mortgage loan.
Bank Draft – A payment method where your loan payment is automatically deducted from your checking or savings account.
CalVet Home Loan – Home loan program offered through the California Department of Veterans Affairs, available for all Californians who served or are serving on active duty under honorable conditions.
Cash Out Refinance – Refinancing transaction in which the money the borrower receives from the new loan exceeds the total amount he uses to repay the existing first mortgage (if applicable), closing costs, points; and satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash to use for any purpose.
Certificate of Eligibility – A certificate that verifies the eligibility of veterans for a VA guaranteed loan. This certificate is obtained through a local VA office.
Certificate of Title – A document showing ownership/title of record as reflected in public records.
Chattel Loan (Personal Property – Home Only or In-Park) – A manufactured or mobile home loan in a rental/lease park or sited on private property. Loan where the land the home is placed on is not offered as collateral.
Closing – The actual or figurative meeting between buyer, seller, lender (or their agents), where the property and funds legally change hands. It is often referred to as the settlement.
Closing Costs Expenses – Costs over and above the price of the property, incurred by buyers and sellers in transferring ownership of a property. Including, but not limited to, costs related to financing, escrow/closing, title insurance, taxes, insurance, inspections, surveys, recording, etc.
Cloud (On Title) – An outstanding claim which negatively affects the marketability of title.
Collateral – The property pledged to secure a loan.
Condominium – A single dwelling unit in a multi-unit structure/community in which each unit is individually owned. The owner holds legal title to his or her unit and owns the common areas and land jointly with other unit owners. An owner may sell, lease and encumber his unit.
Conforming Loans – Any loan that meets the criteria and limits set by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
Construction Loan – Is a short term, interim loan used to finance home construction. The lender advances funds to the builder at periodic intervals as the work progresses.
Construction-to-Permanent Loan – With this type of loan, the borrower’s construction financing simply converts to a permanent mortgage when their home is complete. The lender finances the construction of the borrower’s home, and when it’s ready for occupancy, the loan is converted from a construction loan to a mortgage. The advantages of this type of loan are that there is only one loan application, one appraisal, and one loan closing. The borrower saves time and money because they do not have to secure and close on two loans.
Contractor – A licensed person or company that contracts to develop property and/or erect/set up buildings.
Contributions – This is the amount, as defined in the purchase agreement, other parties may contribute towards closing costs, repairs, and prepaid items for a buyer.
Conventional Loan – A mortgage that is not guaranteed or insured by any government agency, including the Federal Housing Administration (FHA), the Farmers Home Administration (FmHA) and the Department of Veterans Affairs (VA).
Co-operative – Cooperative Housing is a group of dwellings owned by a corporation, the stockholders of which are the residents of the dwellings. It is operated for their benefit by their elected board of directors. In a cooperative, the corporation or association owns title to the real estate. A resident purchases stock in the corporation that entitles him to occupy a unit within the property owned by the cooperative. While the resident does not own his unit, he has an absolute right to occupy his unit for as long as he owns the stock.
Cosigner – Another person who signs a loan and assumes equal responsibility.
Covenant – A written agreement that defines or restricts the use of a given property. This may include architectural restrictions or maintenance requirements.
Credit – The right granted by a creditor to pay in the future in order to buy or borrow in the present; also, a sum of money owed to a person or business.
Credit Report – Is a report of an individual’s credit history, obtained from a reputable credit bureau that summarizes their liabilities and verifies any liens or late payments. The report is used by a lender in determining a loan applicant’s creditworthiness.
Credit Reporting Agency – A company that gathers, files and sells information to creditors and others with a legitimate business purpose, also called a “credit bureau.”
Credit Score – Each credit reporting agency has a credit scoring system (i.e. “FICO” score). A credit score is a number generated by a statistical system used to rate the credit of an applicant according to various characteristics relating to creditworthiness. The higher the score the better and normally, the higher the score the better the rate and term you will receive.
Creditors – Companies or individuals who loan money.
Debt – An amount of money owed by one person, company, organization or other entity to another.
Debt Consolidation – Debt consolidation means replacing several debts or loans by transferring the balances to a single loan or line of credit, usually at a better interest rate and/or term.
Debt-To-Income Ratio (DTI) – Also referred to as back-end ratio or bottom-end ratio. It is the total of all monthly debt payments including the proposed housing expense (but not living expenses like food and utilities) divided by monthly gross (before tax) income.
Deductible – The amount of cash payment required by an insurance policy that is made by the homeowner to cover a portion of a damage or loss, typically, the higher the deductible, the lower the cost of the policy.
Deed – A written document recorded with the state or local government office that conveys real property.
Deed Of Trust – This document is used to secure the payment of a note, whereby a third party holds the deed of the property as security until the borrower repays the loan, also called trust deed.
Default – Failure to repay a loan or otherwise meet the legal obligations/terms of a credit agreement.
Delinquency – Failure to make payments on time. This can lead to default.
Department Of Veterans Affairs (VA) – Independent agency of the federal government that guarantees long-term, low- or no-down payment mortgages to eligible veterans.
Depreciation – A decline in the value of the property due to changes in market conditions, wear and tear on the property, or other factors.
Disclosure – The act of making information known. Document(s) that make know to the borrower information regarding the terms, costs, and/or characteristics of the mortgage.
Discount Points – One-time charge imposed by the lender to lower the rate at which the lender would otherwise offer the loan. Each point is equal to 1% of the loan amount.
Down Payment – Money paid to make up the difference between the purchase price and mortgage amount. Down payments usually are 10-20% of the sales price on conventional loans and can be as little as 5% on Chattel loans and 3.5% on FHA loans.
Earnest Money – Money given by a buyer to a seller as part of the purchase price to bind a transaction and to show good faith of following through with the transaction.
Electronic Fund Transfer (EFT) Systems – A variety of systems and technologies for transferring funds electronically rather than by check.
Electronic Payment – A time saving payment method where a borrower’s loan payment is automatically deducted from their checking or savings account. Choosing this payment option may allow borrower to get a lower interest rate.
Encumbrance – A legal right or interest in land that affects a good or clear title, and diminishes the land’s value. It can take numerous forms, such as zoning ordinances, easement rights, claims, mortgages, liens, charges, a pending legal action, unpaid taxes, or restrictive covenants.
Equal Credit Opportunity Act (ECOA) – A federal law that requires lenders and other creditors to make credit equally available, without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.
Equity – Difference between the fair market value and current indebtedness, also referred to as the owner’s interest.
Escrow – Neutral third party who carries out the instructions of both the buyer and seller to handle all the paperwork of settlement or closing. Escrow may also refer to an account held by the lender into which the borrower pays money for tax or insurance payments.
Fair Credit Reporting Act (FCRA) – A federal law that enables all consumers to learn what information credit reporting agencies have on file and to dispute inaccurate date in the file.
“Fannie Mae”/Federal National Mortgage Association (FNMA) – A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA. This institution, which provides funds for one in seven mortgages, makes mortgage money more available and more affordable.
Federal Housing Administration (FHA) – Division of the Department of Housing and Urban Development. Its main activity is insuring residential mortgage loans made by private lenders. The FHA also sets standards for underwriting mortgages.
FHA 203(b) Program – Type of mortgage insurance offered by Federal Housing Administration (FHA) with the purpose to provide mortgage insurance for borrower to purchase or refinance their primary residence
FHA 203(k) Rehabilitation Program – Type of mortgage insurance offered by Federal Housing Administration (FHA) that enables homebuyers to finance both the purchase of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home.
FHA EEM (Energy Efficient Mortgage) – Helps homebuyers or homeowners save money on utility bills by enabling them to finance the cost of adding energy efficiency features to new or existing housing as part of their FHA insured home purchase or refinancing mortgage.
FHA Loan – Loan insured by the Federal Housing Administration open to all qualified home purchasers. While there are limits to the size of FHA loans, they are generous enough to handle moderate-priced homes almost anywhere in the country.
FHA Streamline Refinance – This refinancing option is considered streamlined because it allows the borrower to reduce the interest rate on their current FHA home loan quickly and oftentimes without an appraisal. FHA Streamlined Refinance also cuts down on the amount of paperwork that must be completed by the lender, saving the borrower valuable time and money.
Finance Charges – The total dollar amount that is charged to use credit, which includes interest and/or other costs.
First Mortgage – Mortgage that is the primary lien against a property.
Fixed-Rate Mortgage – A mortgage on which the interest rate is set for the term of the loan.
Flood Insurance – An insurance policy required by a lender if a Borrower’s house is located in a flood zone, as determined by the National Flood Insurance Program (NFIP).
Foreclosure – Legal procedure in which property securing debt is sold by the lender to pay the defaulting borrower’s debt.
“Freddie Mac”/Federal Home Loan Mortgage Corporation (FHLMC) – A credited agency that purchases conventional mortgages from insured depository institutions and HUD-approved mortgage bankers.
Free and Clear – This is a term used for a property that does not have any liens or debts recorded on title. That means the owner does not have a mortgage.
Gift Letter – A document that is required by a lender if a borrower receives a down payment or any part of a down payment from an individual as a gift.
Ginnie Mae – Known as Government National Mortgage Association. It provides sources of funds for residential mortgages that are insured or guaranteed by FHA or VA.
Good Faith Estimate (GFE) – Estimate of charges in connection with a settlement. An estimate of the fees due at closing for a mortgage loan provided by an originator to a borrower.
Grantee – That party in the deed who is the buyer or recipient.
Grantor – That party in the deed who is the seller or giver.
Gross Monthly Income – Total amount the borrower earns per month, before any expenses, taxes, and so on are deducted.
Hazard Insurance – Form of insurance in which the insurance company protects the insured from specified losses, such as fire, windstorm, vandalism, etc.
Home Affordable Refinance Program (HARP) – An official program of the Departments of the Treasury & Housing and Urban Development, it is designed to assist homeowners in refinancing their mortgages, even if they owe more than the home’s current value. The primary expectation for HARP is that refinancing will put responsible borrowers in a better position by reducing their monthly principal and interest payments, reducing their interest rate, reducing the amortization period, or moving them from a more risky loan structure (such as an interest-only mortgage or a short-term ARM) to a more stable product (such as a fixed-rate mortgage).
Homeowner’s Association – A group of homeowners within a defined community, neighborhood or complex who make decisions, pay to maintain and repair land and common areas and/or enforce community rules and covenants.
Housing Expense-To-Income Ratio – Expressed as a percentage, which results when a borrower’s housing expenses are divided by their net effective income (FHA/VA loans) or gross monthly income (conventional loans).
HUD – United States Department of Housing and Urban Development
HUD-1 Settlement Statement – A final statement listing all of the costs of the sale of a property and who pays for them.
HUD Home – Manufactured homes built after June 1976 are considered HUD homes. Homes built prior are considered pre-HUD homes and/or mobile homes.
Impound/Escrow Amount – Portion of borrower’s monthly payments held by the lender to pay for taxes, hazard insurance, mortgage insurance, and other items as they become due.
Index – Published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments, which is then used to adjust the interest rate up or down on an adjustable mortgage.
Initial Rate – A fixed interest rate charged for the first period of a variable rate loan. Normally this rate will be lower than the prevailing market rates.
Installment Loan – A credit account in which the amount of the payment and the number of payments are fixed.
Interest – The cost of borrowing money. Usually expressed as a percentage of the amount borrowed
Interest Rate – The percentage of a loan amount charged for a loan.
Interest Rate Cap – A safeguard built into a variable rate loan to protect the consumer against dramatic increases in the rate of interest and, consequently, in the monthly payment. For example, a variable rate loan may have a two percentage point limit per year on the amount of increase or decrease, as well as a five percentage point limit (increase or decrease) over the life of the loan.
Interest Rate Floor – The rate floor is the lowest interest rate possible under an Adjustable Rate Mortgage loan.
Investor – Money source for a lender.
Jumbo Loan – Loan that is larger than the limits set by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
Land Lease – When a person owns a house and rents the land beneath. Also relates to mobile home parks and manufactured home communities.
Lessee – A person who signs a lease to get temporary use of property.
Lessor – A company that provides temporary use of property usually in return for periodic payment.
Lien – Claim made on a property in order to satisfy the debt or obligation.
Liquid Assets – Cash or assets that can be immediately converted to cash
Loan Term – The length of time a borrower has to pay off a loan.
Loan-To-Value Ratio (LTV) – Relationship between the amount of the mortgage and the appraised value of the property expressed as a percentage.
Manufactured Home – A home built entirely in a factory under a federal building code administered by the Department of Housing and Urban Development (HUD) that went into effect June 15, 1976. Built as a one (single), two or three (multi) section home in an environmentally controlled center which is then transported to the home site on a frame and installed.
Mobile Home – A factory constructed home built prior to June 15, 1976. Built as a one (single), two or three (multi) section home in a factory which is then transported to the home site on a frame and installed
Modular Home – Factory-built housing with onsite assembly and some onsite construction that is built to meet state and local codes and does not have a chassis. This is usually considered real property.
Margin (spread) – An amount expressed as a percentage that is added to an index to determine the interest rate on a variable rate loan (e.g. index rate + 2% margin). Different loan programs may use different margins and indexes. With a variable rate loan, this margin (spread) generally does not change once it is established in your documents.
Market Value – Highest price that a buyer would pay and the lowest price a seller would accept on a specific property. Market value may be different from the price a property could actually be sold for.
Marketable Title – Title that is free and clear of objectionable liens, clouds, or other title defects.
Monthly Housing Expense – Principal, interest, taxes, and insurance. Also called PITI.
Monthly Payment – The amount paid each month towards the principal and interest amount of a loan. The monthly payment may or may not include taxes and insurance.
Mortgage – A legal document that pledges a property to the lender as security for payment of a debt, or the deed by which such a transaction is affected.
Mortgage Broker – Person or entity that specializes in loan originations, matching borrowers and lenders, and loan processing, for which they receive a fee. Mortgage Brokers often have wholesale relationships with numerous investors/lenders. This allows them to match borrowers with the investor/lender that best meets the borrower’s needs.
Mortgage Insurance (MI) – Insurance written by an independent mortgage insurance company protecting the mortgage lender against loss incurred by a mortgage default. MI is usually required for loans with a loan-to-value ratio of 80.01% or higher and when the down payment is less than 20 percent.
Mortgage Note – A legal document obligating a borrower to repay a loan at a stated interest rate during a specified period that is secured by a mortgage or trust deed and recorded in the public records
Mortgagee – The mortgage lender.
Mortgagor – The borrower or homeowner.
Non-Conforming Loan – Conventional home mortgage that does not meet the criteria of Fannie Mae or Freddie Mac for various reasons including loan amount, loan characteristics or underwriting guidelines.
Non-Owner Occupied – A property used as a rental, which is not a vacation home or primary residence of the borrower.
Non-Traditional Credit History – A record of credit performance, shown with receipts and check stubs from payments to landlords, utility companies, and other providers from applicants who do not have a credit history from traditional loans and other forms of credit.
Note Rate – The annual interest rate paid on a loan and used to calculate monthly payments, sometimes referred to as the “actual rate”
PITI – Principal, interest, taxes, and insurance. Also called monthly housing expense.
Pre-paid Items – Pre-paid items are amounts that are required by the Lender to be paid in advance of their due date at closing. The borrower may be required to prepay certain items at the time of closing, such as accrued interest, mortgage insurance premiums, and hazard insurance premiums. Pre-paid items contribute to the total amount of the loan’s closing costs.
Pre-qualification – The process used by lenders to calculate a potential buyer’s mortgage affordability, usually based on unverified information.
Primary Residence – The dwelling/home where the borrower lives. A borrower can only have one Primary Residence at any one time and it is considered a their legal residence.
Principal – The amount of debt, excluding the interest, left on a loan.
Processing – The steps an originator takes to gather information and documentation to support the borrower’s application, which is ultimately the basis for underwriting. This includes the credit report, appraisal, surveys, verification of employment, assets, mortgage, rent, etc.
Property Tax – A tax charged by the local government and used to fund a variety of municipal services such as schools, police or street maintenance.
Proration – Certain items that are continuing expenses such as property taxes and space rent that must be distributed between the buyers and the sellers at the close of sale and/or escrow.
Rate and Term Refinance – Obtaining a new loan to pay off a current note holder to improve the rate and/or term. No cash back to the borrower.
Real Estate (Real Property – On Land) Loan – Loan where both the Manufactured Home and the land are offered as collateral.
Recording – Filing documents affecting real property as a matter of public record, thereby giving notice to future purchasers, creditors, or other interest parties. Recording is controlled by statute and usually requires the witnessing and/or notarizing of an instrument to be recorded.
Recording Fees – Costs for recording a home sale and or mortgage with the local authority(ies), thereby making it part of the public records.
Refinance – Negotiation of a new loan in order to pay off an existing loan. Homes are usually refinanced in order to take advantage of lower interest rates, switch from one loan type to another (ie; from variable to fixed), or generate cash from built-up equity.
Required Cash – The total dollar amount required to close the loan and/or home purchase.
Reserves – This is the amount of liquid assets that the lender needs to verify in the borrower’s account above and beyond the funds required to close the transaction. This amount is expressed as a multiple of the total monthly payment (i.e. if PITI is $1200 per month, 2 months reserves would be $2400.) Reserves remain in the borrowers account.
Retro-Fit Foundation – A foundation system under a manufactured home is that affixes the home to the land through a mechanical connection rather than through a simple paper trail for the purposes of tax assessment. The physical connection effectively conjoins the home and land as real property. Required to meet loan or insurance specifications for “permanent” attachment, wind resistance, snow loads or seismic resistance. The foundation system serves the dual purpose of providing a more secure support system and providing the lender with the assurance that your home and land are conjoined as real property.
Reverse Mortgage – A special type of home loan that lets an elderly homeowner convert the equity in the home into cash, in which the lender makes periodic payments to the borrower using the borrower’s equity in the home as security.
Revolving Account – A credit agreement that allows a borrower to pay all or part of the outstanding balance on an account, as amounts are paid off, those amounts become available again to use for another purchase or cash advance.
Second Home (Vacation Home) – Residential property occupied by the borrower for some portion of the year, and not subject to any timesharing ownership arrangement. The property must be in a location where it can function reasonably as a second home.
Second Mortgage – A lien on property in second position, used in purchase transactions, with down payments less than 20%, as an alternative to mortgage insurance. Also, it is a loan allowing homeowners to utilize their home’s available equity.
Self-Employed – A borrower is typically considered self-employed if they own 25% or more of the company by which they are employed.
Servicing – All the steps and operations a lender performs to keep a loan in good standing, such as collection of payments, payment of taxes, insurance, property inspections and the like.
Settlement – The actual or figurative meeting between the buyer, the seller, and the lender (or their agents), where the property and funds legally change hands. It is often referred to as the closing.
Staged Funding – A payment process, often part of a construction loan, allowing the retailer/builder to be paid at predetermined intervals throughout the construction phase.
Step Rate Program – Manufactured and Mobile Home full amortized loan that has a fixed lower rate and payment for the first 5 years of the loan and then adjusts to a predetermined rate and payment for the remainder of the loan term. The rates and payments of both the first 5 years and the remainder of the loan term are predetermined and know at the time of closing, no surprises.
Survey – Measurement of land, prepared by a registers land surveyor, showing the location of the land with reference to known points, its dimensions, and the location and dimensions of any building(s) or structure(s).
Term – The number of years before your loan is scheduled to be paid off. The period of time between the beginning loan date and the date the entire balance of the loan is due. 10, 15, 20 and 30-year terms are most common.
Title – Document that gives evidence of an individual’s ownership of property.
Title Insurance – A policy, usually issued by a title insurance company, which insures a buyer against errors in the title search. The cost of the policy is usually a function of the value of the property, and can be paid by the buyer, the seller, or both.
Title Search – Examination of municipal records to determine the legal ownership of property. Usually is performed by a title company.
Trustee – A party that is given legal responsibility to hold property in the best interest of or “for the benefit of” another. The trustee is one placed in a position of responsibility for another, a responsibility enforceable in a court of law.
Truth-In-Lending Act (TILA) – Federal law requiring disclosure of the Annual Percentage Rate to homebuyers shortly after they apply for the loan.
Underwriting – The process of analyzing the risk involved in making a mortgage loan to determine whether the risk is acceptable to the lender. This involves the evaluation of the property and of the borrower’s ability and willingness to repay the loan.
Vacation Home (Second Home) – Residential property occupied by the borrower for some portion of the year, and not subject to any timesharing ownership arrangement. The property must be in a location where it can function reasonably as a vacation home.
VA Loan – Long-term, low-or no-down payment, loan guaranteed by the Department of Veterans Affairs. Restricted to individuals qualified by military service or other entitlements.
Variable Rate Mortgage (VRM) – Mortgage in which the interest rate is adjusted periodically, based on a pre-selected index, sometimes referred to as an adjustable rate mortgage.
Verification Of Deposit (VOD) – Document signed by your financial institution verifying the status and balance of your financial accounts.
Verification of Documents – Most loan programs require the originator to verify information on loan applications such as the borrower’s employment, bank account balances, and credit references. Often, these verifications are referred to as VOE’s (verification of employment), VOD’s (verification of deposits) and VOM’s (verification of mortgage).
Verification Of Employment – Document signed by your employer verifying your position, date of hire, and salary.
Veterans Administration (VA) – A government agency providing guarantees for lenders on approved loans to qualifying veterans.