Mortgage Dictionary

Terminology, definitions, explanations, and documents for business professionals in the mortgage lending and mortgage risk management industries, as they are used on

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Limited Cash-Out Refinance
A refinance loan purpose type in which the mortgage amount is generally limited to the sum of the unpaid principal balance of the existing first mortgage, closing costs (including prepaid items), points, and the amount required to satisfy any mortgage liens that are more than one-year old (if the borrower chooses to satisfy them), and other funds for the borrower's use (as long as the amount does not exceed 2% of the principal amount of the new mortgage).

See Cash-Out Refinance
See Loan Purpose Type
See Mortgage Loan Purpose Type Overview
See Refinance

Loan Documentation Type
See Documentation Type
Loan Product
The terms offered to a borrower for a mortgage loan, based on an investors published loan program guidelines, is the loan product. A single loan program has many loan products. For example, an investor loan program of Conforming ARM may offer 3/1, 5/1, and 7/1 "Conforming ARM" products.

See Loan Program
See Correspondent Lending and Mortgage Loan Production Overview
Loan Program
A loan program is the description used by an investor to market a group of loan products. Mortgage industry investors publish loan program guidelines that detail term, property type and borrower credit characteristics for loans they will purchase. A loan program can have many loan products that fall underneath its umbrella. For example, the investor may have a loan program type of "Conforming Fixed" and underneath the "Conforming Fixed" program umbrella the investor may offer 10-Year, 15-Year, 20-Year, 25-Year and 30-Year "Conforming Fixed" products.

See Loan Product
See Correspondent Lending and Mortgage Loan Production Overview
Loan Purpose Type
The purpose for which loan proceeds will be used. The two most common loan purpose types in the mortgage industry are Purchase and Refinance.

The MISMO Mortgage Application v2.3.1 specification for electronic commerce supports the following loan purpose type values, under the LOAN/_APPLICATION/LOAN_PURPOSE node, in the [@_Type] attribute of the mortgage application transaction:
  • Construction Only
  • Construction To Permanent
  • Other
  • Purchase
  • Refinance
  • Unknown

These loan pupose types are recognized throughout the mortgage industry and represent various levels of lending risk.

See Mortgage Loan Purpose Type Overview
See Mortgage Industry Standards Maintenance Organization (MISMO)
See Purchase
See Refinance

Loan to Value Ratio (LTV)
The Loan To Value (LTV) is the loan amount divided by the value of the property. The higher the Loan To Value ratio, the greater the monetary risks for the lender should a default occur. Lenders use the LTV ratio in conjunction with other qualifying factors (e.g. Credit Score, Debt to Income (DTI) ratios, etc.) to determine whether a borrower qualifies for a mortgage.

See Loan To Value (LTV) Overview
Lock (Loan Lock)
1. The act of committing a loan to an investor to ensure a loan interest rate for the borrower over a specified period of time.

2. The act of committing to deliver, in a specified period of time, a loan to an investor on the mortgage secondary market to ensure the payment of a premium to the seller.

See Best Efforts Delivery Commitment
See Mandatory Delivery Commitment
See Mortgage Correspondent Lending and Loan Production
See Mortgage Industry Seller Pull-through Overview

In the mortgage industry LTV is an acronym for Loan To Value Ratio.

See Loan To Value (LTV) Overview

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Terminology, definitions, terms, explanations, and documents for business professionals in the mortgage lending and mortgage risk management industries.