MH MORTGAGE TERMINOLGY
Rate: The Actual Rate is the annual
interest rate you pay on your loan (sometimes referred to as the
"note rate"), and is the rate used to calculate your monthly
Adjustable Rate Mortgage: A loan that adjusts on a
regular schedule based on a national economic index and the
lender's margin. Also called "variable rate
mortgage." JCF Lending Group does not offer
adjustable rate mortgages or A.R.M's and does not endorse or
recommend adjustable rates mortgages.
process of paying off a mobile home loan with regular payments over
a fixed time period, where principal & interest are made on
Schedule: A timetable for payments of a manufactured home
mortgage showing the amount of each payment that is applied to
interest & principal.
APR (Annual Percentage
Rate): The APR includes both your interest and any additional
costs or prepaid finance charges you might pay, such as prepaid
interest, private mortgage insurance, closing fees, points, etc.
Your APR represents the total cost of credit on a yearly basis
after all charges are taken into consideration. It will usually be
slightly higher than your Actual Rate because it includes these
additional items and assumes you will keep the loan to
Application Fee: A
one-time fee charged by a lender for processing a borrower's
application for a manufactured home mortgage loan. Sometimes
the application fee covers the cost of the credit report. JCF
Lending Group does not charge an application fee.
professional opinion of the market value of a manufactured home
property, in comparison to other manufactured homes that have sold
within or in proximity to the home in question.
increase in the value of a mobile home due to change in market
conditions, home improvement or other factors. Contrary to popular
belief, manufactured homes can and do appreciate.
Assessed Value: The
value placed on a manufactured home by a public tax assessor for
the purpose of determining property taxes. This is considered the
least reliable method of determining a manufactured home value and
should be given little weight when making a buying or selling
A loan that can be taken over, or assumed, by a buyer when the
mobile home is sold. Only some of JCF Lending Group's financial
products are assumable.
Underwriting: A computer-based method that enables mortgage
lenders 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. JCF Lending Group
personally reviews each and every application and does not use
Mortgage: A loan with fixed monthly payments based on a 30-year
schedule of payments, but the entire balance of the loan comes due
at the end of a set period, usually five, seven or ten
years. JCF Lending
Group does not offer balloon payment mortgages and does not endorse
or recommend their use.
Bank: A depository
institution chartered under federal and state regulations that
offers services such as checking accounts, savings accounts,
consumer loans, safe-deposit boxes, investment services and
automatic payment of bills.
Bankruptcy: A legal
proceeding declaring that an individual is unable to pay debts,
which may release the person from repaying debts
Borrower: The person
who applies for and obtains a manufactured home mortgage
Budget: A financial
plan for spending and saving money.
Building Permit: A
written permit that must be purchased from the local government by
anyone doing remodeling or rehabilitation work on a
Buy-Downs: Points a borrower pays in advance to lower
the interest rate. Only recommended for long term ownership. JCF
Lending Group can sometimes finance Buy Down points into the mobile
Buyer's Agent: A
real estate professional who enters into a contract of agency
relationship with a buyer, and typically gets paid by splitting the
sales commission with the selling or listing
Cap: The maximum
amount an interest rate can increase or decrease in a designated
period of time (interest rate cap) or over the life of the loan
(lifetime cap) on an adjustable rate loan.
applicant's ability to earn enough income to make the new mobile
home mortgage loan payments and still pay all other living
Capital: The funds
that a potential homeowner has available for the up front costs of
manufactured home ownership, such as the down payment and closing
When an owner refinances their manufactured home loan and takes
some home equity out as cash. JCF Lending Group offers Cash-Out
Refinance loans on manufactured homes in parks.
Cash Reserves: A
requirement of some lenders that buyers have sufficient cash
remaining after closing to make the first several mortgage
payments. JCF Lending Group does not have any cash reserve
Bankruptcy: A form of bankruptcy that involves total
liquidation of assets. There is no repayment of debt on a Chapter 7
Bankruptcy: A form of bankruptcy that involves a repayment
Charge Off: An
accounting term to indicate that the creditor does not expect to
collect the balance owed on an account. However, most
creditors will continue to pursue collection of the
Chattel: A loan
secured against personal property, which is common in the financing
of manufactured homes.
Clear Title: A title
that is free of liens and legal encumbrances on the ownership of
Closing: The final
steps in the transfer of property ownership, which usually occurs
at a formal meeting between the buyer, seller, and third party
agent(s), where the buyer signs the manufactured home mortgage
contract. The seller receives payment for the property, the buyer
and/or seller pay closing costs, and the title is transferred from
the seller to the buyer.
accepted as security for a loan, that measures the value and
condition of the mobile or manufactured home to make sure it is
worth at least as much as is being borrowed against
Commission: The fee
a real estate agent is paid for helping to sell a manufactured home
that is usually based on a percentage of the purchase price of the
Commitment Letter: A
formal offer by a lender stating the terms under which it agrees to
loan money to a mobile home buyer or borrower.
Act (CRA): A federal law that encourages lenders to meet the
credit needs of their local communities.
Analysis (CMA): A written analysis of comparable houses
currently being offered for sale and comparable houses sold in the
past six months in the general area.
Condominium: A home
that is attached to other homes and shares common areas that
everyone in the building, development, or community owns together
and maintains through a homeowner's association
A manufactured home loan obtained that combines payments of
separate bills into one loan payment.
condition put in a purchase agreement when an offer is made to buy
a manufactured home.
Contract for Deed: A
type of seller financing, also known as "owner carry", where the
buyer makes a down payment and installment payments to the seller,
but there is no transfer of title for the borrower to own the home
until the loan is fully paid or the manufactured home is refinanced
into the borrower's name.
individual who is hired to build or rehabilitate a
Mortgage: A loan made by for-profit lenders and not insured by
the federal government.
A type of group ownership where all members own the community's
living units and common areas by owning shares of the property. See
Co-signer: A person
who agrees to share credit responsibilities and repays the debt if
the original borrower defaults.
response from the seller changing some of the terms of an original
Credit: The granting
of money in exchange for a promise of future repayment that
measures an applicant's likeliness to repay a loan based on how
previous debts have been handled and paid.
Advice given by professional counselors to inform people about how
to use credit responsibly and how to get out of serious debt.
Credit Counseling services will also make repayment arrangements
with the original creditors.
Creditor: Any person
or business to whom the consumer owes money and who has the right
to undertake legal action to attain money owed on the original
Credit Report: A
record of how a consumer has paid credit in the past. Used as a
guide to determine a potential manufactured home buyer's
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: A
numerical value based on the analysis of a credit report that is
used by creditors to predict how likely an individual is to repay a
new manufactured home loan.
Credit Union: A
financial institution that is a cooperative and offers checking and
savings accounts and other financial services for its members. Many
credit unions now offer manufactured home
owed. Also called a "liability."
Plan: A bill payment plan for a borrower in a credit emergency
that is agreed to by the borrower and creditors.
Ratio: The maximum percentage of a borrower's gross monthly
income that can be spent on the mobile home payment and all other
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
Deed of Trust: An
alternative to a mortgage in some states, whereby a third party
holds the deed of the property as security until the buyer/borrower
repays the loan. Also called "trust deed."
Default: Failure to
meet financial obligations or make payments, which may result in
the lender foreclosing on the manufactured home
decrease in the value of the property due to changes in market
conditions, wear and tear on the property, or other
or State requirements to provide information about a property for
sale, especially as it represents actual or potential defects or
The process of recording certain documents and making them part of
the public record that follows closing.
Down Payment: The
amount of cash a borrower pays toward purchasing a manufactured
home. This money is typically given to the
Dual Agent: A real
estate professional who represents both the buyer and the seller in
a mobile home purchase transaction.
A provision in a mortgage allowing the lender to demand repayment
in full if the borrower sells the property that secures the
Earnest Money: Funds
that are included with an offer to purchase a manufactured home and
to show good faith in following through with the
Equal Credit Opportunity
Act (ECOA): A federal law that requires all lenders and other
creditors to make credit equally available to a potential borrower
without discrimination based on race, color, national origin, age,
sex, marital status or receipt of income from public assistance
interest in an asset after liabilities have been deducted.This is
the difference between the appraised value of the home and the loan
Equity Loan: A loan
based on the borrower's equity in the home.
Escrow: A written
agreement or something of value put in the care of a third party
and not delivered until certain conditions are fulfilled. The time
period between when the purchase contract is signed and the loan
Escrow Account: A
special account set up by the lender to collect and hold monthly
payments toward annual property taxes and homeowner's
insurance. This is also called an "impound
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.
Fair Debt Collection
Practices Act: A federal law that protects all consumers from
abuse or threats from collection agencies trying to collect overdue
payments on behalf of the original creditor.
Fair Housing Act: A
federal law that prohibits any type of discrimination in all
housing and real estate transactions.
Fair Market Value:
The price a buyer is willing to pay and a seller will accept for
the manufactured home.
FHA Loan: A type of
mortgage that is insured by the Federal Housing Administration, a
department of the Federal government. JCF Lending Group does not
offer FHA loans.
Finance Charges: The
total dollar amount that is charged to use credit, which includes
any interest and/or other costs.
First Mortgage: A
home loan that has priority over the claims of any additional or
subsequent lenders for the same property in the event of
Fixed Expense: Any
expense that does not change from period to period, such as loan
A loan where the interest rate and payments remain the same over
the life of the loan. All of Chattel Mortgage loans have a fixed
Flood Insurance: An
insurance policy required by a lender if a buyer's house is located
in a flood zone, as determined by the National Flood Insurance
Forbearance: The act
by which a creditor extends time for payment of a debt or forgoes
for a time the right to enforce legal action on the debt or the
legal process used to force the payment of a debt secured by
collateral whereby the property is sold to satisfy the
(FSBO): A home that is offered for sale by the owner without
the use of a real estate agent.
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,
that is not to be repaid.
Good Faith Estimate:
A document that discloses any anticipated settlement or closing
costs involved in the transaction.
Mortgage: A loan that originally starts out with low monthly
payments, and then over a period of years, the payments go up
slowly and then stay fixed for the rest of the loan. JCF Lending
Group does not have a Graduated Payment program.
Gross Income: Money
earned before any taxes are withdrawn.
Insurance that protects the homeowner against physical damage to
the manufactured home from fire, wind, vandalism and other
Home Equity Line of
Credit: A type of loan that allows the homeowner to access the
loan money with checks or a credit card as needed. Based on the
equity in your home. JCF Lending Group does not have a program in
place for this type of loan.
Home Equity Loan: A
loan based on the difference of the amount of equity on a home and
the home's current market value.
Changes to a house that increases its value, such as modernizing a
kitchen or replacing carpet or flooring. JCF Lending Group can
provide Home Improvement loans if the home is located in a
manufactured home park or community.
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
Insurance: An insurance policy that combines liability coverage
and hazard insurance on your home.
Home Warranty: A
guarantee for certain features of a new home, such as the
materials, workmanship and/or its main components offered by a
dealership or builder.
Policy: An optional policy that is available that protects a
homeowner against the cost of high repair bills for one year if the
heating, plumbing, air conditioning or appliances break
Housing Allowance: A
calculation which considers the monthly home payment, land payment
and/or lot lease payment. Lenders in the manufactured home industry
try to keep this to no more than 34% of an applicants monthly gross
A professional opinion of the structural soundness and condition of
a manufactured home..
Housing Ratio: The
maximum percentage of a borrower's gross monthly income that can be
used to make the monthly mortgage payments and land or lot
rent. Also called "housing allowance".
Statement: A final statement listing all of the costs of the
sale of a property and who pays for them. HUD-1 Settlement
Statements are prepared by escrow/title companies and may or may
not applicable to manufactured home sales, depending on the
Index: A published
market index rate tied to an economic indicator that is used to
calculate the interest rate of an adjustable rate mortgage at
origination and at each adjustment period.
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.
Interest Factor: The
cost for borrowing $1,000 of a mortgage loan based on interest rate
Interest Rate: The
percentage of a loan amount charged for a loan.
Lock-In: A written guarantee that a buyer will receive a
specified interest rate from a lender, provided that the loan
closes within a set period of time.
Joint Tenancy: A
form of ownership, where two or more people live together and have
an equal and undivided interest in the property.
official court decision of an action or lawsuit that may be listed
on a credit report as a public record.
Land Lease: When a
person owns a house and rents the land beneath. Also relates to
mobile home parks and manufactured home
Mortgage: A type of financing option that allows a potential
home buyer to lease a home with an option to buy, where each
month's rent payments include an extra amount that is deposited
into a savings account to accumulate money for down payment and
Lender: The entity,
business or person who offers a mortgage
Protection: Insurance that covers people (other than the
insured) and their personal property in cases of injury or damage
while on the homeowner's property.
Lien: A legal hold
or claim of one person on the property of another as security for a
debt or charge that may be listed on a credit report as a public
record. When the mobile home or manufactured home is in a park or
is not attached to real property, the lien will normally appear on
the home's title.
Listing Agent: A
real estate professional who has a contract with the seller of a
house to advertise the property for sale and represent the seller
when offers are made. If the listing agent is listing a
mobile or manufactured home in a leased lot situation, most states
require that the listing agent be a licenced
Loan Term: The
length of time a borrower has to pay off a loan.
(LTV): The ratio of the loan balance to the appraised value of
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.
Mobile Home: A
factory constructed home built from 1970 to June 15,
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
Mortgage: A security
agreement between the lender and the borrower in which the property
is collateral for the loan. The mortgage gives the lender the
right to collect payment on a loan and to foreclose if the loan
obligations are not met.
Mortgage Bank: A
type of financial institution that offers only mortgage financing
Mortgage Broker: A
company or individual that locates lender for the borrower for a
fee. Brokers are considered the middle man. The use of a mortgage
broker can increase your rate and fees that a borrower would have
received had they borrowed from a lender
(MI): A policy required by the lender if a borrower puts less
than 20% cash down when buying a home with a conventional loan to
protect the lender from collateral risk in case of default.
Also called "private mortgage insurance (PMI)." JCF Lending Group
does not require mortgage insurance.
Insurance: An optional form of life insurance that pays off a
mortgage if the borrower dies. This has proven to not be cost
effective for consumers. Chattel mortgage does not offer mortgage
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 and either recorded by title or in the public records
along with the deed, in the case of a real property
The total monthly loan payment known as principal, interest, taxes
and insurance (PITI).
Service(MLS): A service within a given community or area that
allows real estate professionals to submit listings and agree to
attempt to sell all properties in the service. Some MLS
services also list manufactured homes in parks.
Amortization: Payment terms under which the borrower's monthly
payments do not cover the interest due, and the loan balance
subsequently increases. This occurs when small balances are
mortgaged for extended terms.
History: A record of credit performance shown with receipts and
check stubs from payments to landlords, utility companies,
child-care providers and other applicants who do not have a credit
history from traditional loans and other forms of
Origination Fee: A
fee that is charged by lenders for submitting, processing and
evaluating a proposed mortgage loan.
Payment Plan: An
agreement with a lender in which a borrower promises to make up any
missed payments by sending one full payment and one partial payment
each month until delinquent mortgage payments are caught
Planned Unit Development
(PUD): A type of property that is part of a subdivision and has
common areas that are shared with all residents and maintained
through a homeowner's association fee. Usually, the owner
owns the home and the land on which it stands. Also called a
"co-op" in the case of mobile or manufactured
Point: A fee that is
one percent of the loan amount.
Pre approval: A
guarantee that a lender will loan a potential buyer a fixed dollar
amount as long as they buy a home within a certain time frame and
the house appraises for the amount of money for which they
Predatory Lending: A
type of lending that falls between appropriate risk-based pricing
and blatant fraud and combines certain products, terms, prices and
Sale: When the lender agrees to allow a delinquent borrower to
sell the house to avoid foreclosure.
more each month than the amount of the regular mortgage loan
payment to pay the loan off sooner and save money on interest
Some lenders will charge a borrower either a flat rate, or
percentage of the loan, if the loan is paid in full prior to the
The process used by lenders to calculate a potential buyer's
mortgage affordability, usually based on unverified
Lending to borrowers with highly rated credit
outstanding balance of a loan, not including interest and other
Promissory Note: A
document in which the borrower promises to repay a
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.
Manufactured home owners in parks pay personal property taxes in
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.
Information obtained by a credit reporting agency from court
records, such as liens, bankruptcy filings and
Purchase and Sale
Agreements: A written contract signed by the buyer and seller
stating the terms and conditions under which a property will be
Purchase Offer: A
purchase proposal to the seller of a house, telling the amount a
certain buyer would pay for the house and other conditions that
would have to be met before the proposed home
Quitclaim Deed: A
deed that operates to release any interest in a property that a
person may have. A quitclaim deed is not valid and/or does not
apply to manufactured homes, which are considered personal
Real Estate Broker:
A real estate agent that is authorized to open and run his or her
own agency. Most states require real estate brokers to also be
licensed dealers when selling manufactured homes in parks or
communities where the land is leased.
Real Estate Settlement
Procedures Act (RESPA): A lending regulation that establishes
laws and procedures for closing mortgage loans. RESPA
prohibits cost increasing practices, such as kickbacks and referral
fees and requires advance disclosure of settlement
A real estate agent or agency that belongs to the local or state
board of Realtors and has an affiliation with the
National Association of Realtors.
illegal practice of discrimination against a particular ethnic
group by mortgage lenders who decide that certain areas of a
community are too high risk and refuse to lend to buyers who want
to purchase property in those areas, regardless of their
qualifications or creditworthiness.
process of paying off one loan with the proceeds from a new loan
secured by the same property.
Coverage: An optional insurance feature available on both a
house and its contents that pays to restore it to it's original
condition if the home is damaged or replace contents if they are
Property that is taken back by the creditor when the borrower does
not make payments due on the property.
Reverse Mortgage: A
special type of home loan that lets an elderly homeowner convert
the equity in the home into cash. Reverse mortgages are not offered
by JCF Lending Group.
Revolving Account: A
credit agreement that allows a borrower to pay all or part of the
outstanding balance on an account. As credit is paid off, it
becomes available again to use for another purchase or cash
Second Mortgage: A
home loan that has rights subordinate to the rights of the first
mortgage. Not normally offered to manufactured homes located in
parks and/or leased lot communities.
collection of payments and management of operational procedures
related to a mortgage.
Statement: A document required by the Real Estate Settlement
Procedures Act that is an itemized statement of services and
charges relating to the closing or settlement of the property
transfer. Also called "HUD-1 Settlement Statement" or
"Uniform Settlement Statement."
Short Sale: This is where a lender agrees to accept less than the actual payoff on a mortgage. This normally only happens when an account has been deemed "distressed". Warning: The amount waived by the lien holder will be reflected as a chatge-off on the consumers credit and the consumer will receive a 1099 Form for the full amount of the reduction figure, that must be filed with that years taxes.
A type of property, usually detached, where one family owns the
home and the land on which it stands.
Sole and Separate: A
form of ownership where one individual owns the property, another
the manufactured home.
detailed description of the size, shape, materials and other
details of a building or remodeling project.
Sub prime Lending: A
type of lending that relies on risk-based pricing to serve
borrowers who cannot obtain credit in the prime market, where
higher degrees of risk for borrowers carry higher costs for
loans. Sub prime loans are often called "B- through D"
professional measurement of a property and the land around
Tenancy in Common: A
form of ownership where two or more people own a property and can
have different shares of ownership. Also called a
Title: A legal
document establishing the right of ownership in a
Insurance to protect the lender (lender's policy) or the buyer
(owner's policy) against loss arising from disputes over ownership
of a property.
(TILA): A federal law that requires creditors to give complete
and accurate information about the cost of credit to consumers and
the terms of repayment.
Statement: A document that discloses the terms and cost of a
mortgage loan, including APR.
process of analyzing a borrower's finances and payment history in
order to approve or deny a loan.
VA Loan: A loan that
is guaranteed by the Veterans Administration, a department of the
Variable Expense: An
expense that changes from period to period, such as utilities,
food, clothing and entertainment.
process of making sure that all of the borrower's loan application
information is accurate.
final inspection of the property by the buyer to determine that the
property is as described in the purchase agreement, which is
usually conducted right before closing.
The negotiated agreement that is made with the lender or servicer
to address a debt by the homeowner in order to avoid
Zoning: A county or
city law stating the types of use to which properties can be put in
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