Lender Expert

Be The Lender

Glossary: 

Typically a glossary comes at the end of a novel or a text book. We understand many Lender Expert Students have likely never been apart of a mortgage transaction from any other side than being the borrower. There are some key terms we want to briefly touch on before you carry on to the next chapter so you have a bit more comfort as you get started.

Lender: The institution or individual who is loaning money to a borrower in the form of a mortgage.

Mortgage: An interest secured on a property that is registered on it’s title in exchange for loaning a borrower funds for a certain period of time; also known as the loan’s ‘security’.

Lending Profile: A set of guidelines that an investor can create in order to outline their general preferences as they relate to the criteria found in a given mortgage loan opportunity. For example, listing out the locations one is willing to invest in will assist in making quick decisions as mortgage loan requests are considered for investing in; the request is either coming from within the preferred locations the lender/investor is comfortable with or it’s not.

ROI: Return On Investment; the benefit an investor will receive over time, usually received in the form of loan interest, in exchange for placing funds into a particular investment strategy.

Loan To Value: The amount of a mortgage loan, in dollars, compared to the appraised value of a property, expressed in the form of a percentage. For example, in a situation where a client has a $150,000.00 mortgage loan owing on a property that is appraised for $200,000.00 today, the mortgage would be considered to have a 75% loan-to-value (LTV = $150,000.00 divided into $200,000.00).

Mortgage Administration: The maintenance of a mortgage loan that occurs after the loan has funded, including all duties such as collecting mortgage payments, creating and issuing statements for the borrower/lender/CRA, addressing NSF situations, initiating and managing foreclosure processes, mortgage loan renewal, and mortgage loan payouts, etc.

Loan Position: On title of a property, a charge registered by a lender will be in either 1st position, or 2nd, 3rd, etc, depending on the time of registration in relation to any previously registered charges that are currently outstanding. Generally, the lower in position the charge, the better the security is for the charge holder/lender, and therefore the lower the risk.

Foreclosure Process: The legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the property used as the security for the loan.