Qualifying Ratio
The ratio of the borrower's fixed monthly expenses to his gross monthly income. Ratios are expressed as two numbers like 28/36 where 28 would be the Front-End Ratio and 36 would be the Back-End Ratio.

• The Front-End Ratio is the percentage of a borrower's gross monthly income (before income taxes) that would cover the cost of PITI (Mortgage Principal Payment + Mortgage Interest Payment + Property Taxes + Homeowners Insurance). In the case of a 28% Front-End Ratio a borrower could qualify if the proposed monthly PITI payments were 28% or less than the borrower's gross monthly income.
• The Back-End Ratio is the percentage of a borrower's gross monthly income that would cover the cost of PITI plus any other monthly debt payments like car or personal loans and credit card debt.
• Please note that qualifying ratios are only a rough guideline in determining a potential borrower's credit-worthiness. Many factors such as excellent or poor credit history, amount of down payment, and size of loan will influence the decision to approve or disapprove a particular loan. Mortgage Rate Watch urges all borrowers to discuss their particular situation with a qualified lender regardless of the outcome of any self-qualification exercise.

Rate Lock
The act of the Correspondent's obtaining a confirmed interest rate and loan purchase price from Cypress Mortgage for a loan in accordance with the procedures set forth in the Manual.
 

Recording Fee
: Charged by the County Clerk to record documents in the public records. Charges are based on the number of pages recorded.

"Register" or "Registration"
The act or process of registering a loan with Cypress Mortgage in accordance with the procedures set forth in the Manual. A loan that has been Registered may be in a float status or a Rate-Locked status, as provided in the Manual.      [TOP]

Repurchase Price
An amount equal to: (i) the greater of the Purchase Price for the loan paid by Cypress Mortgage (including any amount in excess of par paid by Cypress Mortgage) or the outstanding principal balance of the Mortgage Note as of the Purchase Date; less (ii) the aggregate amount of reductions of the principal balance of the Mortgage Note received by Cypress Mortgage as of the date of repurchase; plus (iii) any and all interest payable on the outstanding principal balance of the Mortgage Note as of the date of repurchase; plus (iv) any and all costs and expenses, including any advances for escrows accounts, costs of foreclosure, reasonable attorneys' fees, and costs (if any) associated with purchasing the loan out of a pool of loans, incurred by Cypress Mortgage in connection with the loan, the Mortgaged Property, and/or the Mortgagor.      [TOP]

RESPA
Real Estate Settlement Procedures Act - A federal law that requires lenders to provide home loan borrowers with an estimate of settlement costs as well as the HUD booklet on settlement costs within three days of receiving an application.
 

Seasoned
Scheduled payments on a loan have been made regularly for one year or longer.
 

Security Instrument
Any deed of trust, security deed, mortgage or any other instrument that constitutes a lien on the Mortgaged Property securing payment by a Mortgagor of a Mortgage Note and any modifications thereto, including, to the extent that the context shall permit or require, the security agreement creating a security interest in favor to Correspondent in the stock allocated to a dwelling unit in a residential cooperative housing corporation and pledged to secure a Co-op Loan, and the related Co-op Lease.
 

Seller Agency
: See TREC Disclosure Form "If the Broker Represents the Owner"

Septic Well Inspection
: The septic system must have a certificate by the city or county Health Department.      [TOP]

Servicing Release Premium
The amount to be paid to the Correspondent for the Servicing Rights associated with a loan as specified by Cypress Mortgage in writing.

Servicing Rights
With respect to a loan, the right to administer, collect the payments for the reduction of principal and application of interest, pay taxes and insurance, remit collected payments, provide foreclosure services, provide full escrow administration, and the right to receive any applicable servicing fee, float benefit and ancillary income arising from or connected to the loan. Except as may be otherwise provided in the Manual, Servicing Rights shall also include the right to maintain any related custodial or escrow accounts.

Settlement Costs
See Closing Costs.

Subordinate Financing
A secured debt that is inferior to the secured interest of another in the same property. Subordination may apply not only to security instruments, but also to leases, real estate rights and any other types of debt instruments.     [TOP]

Survey
: Survey of property required by lender; shows lot size, easements, any encroachments, locations of improvements, etc.

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