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Debt-to-Income
Ratio
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the ratio of a borrower's monthly payment obligation, divided
by his or her monthly income. The ratio is expressed as
a percentage and is used by lenders as a measure of eligibility
for a loan. A front-end ratio compares all monthly housing
expenses to the gross income. A back-end ratio also figures
in other debts, such as auto loans and credit cards.
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Deed
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the legal document conveying title
to a property.
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Deed of Trust
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a document, used in some states, given by the borrower to
a third party (trustee) vesting title to the property in
the trustee as security for the borrower's repayment of
the mortgage loan.
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Default
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failure to make mortgage payments or violations other provisions
of the mortgage note.
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Discount
Points
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a type of point paid
by the borrower that reduces the interest
rate of the loan.
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Down Payment
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the lump sum paid to the seller when the property is purchased.
This is usually 10 to 20 percent of the purchase price,
although some loans may allow a lower down payment.
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Mortgage Glossary © Copyright 2004, 2008
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