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Choose the partner you need.
A full-service mortgage lender with more than 40 years of real estate lending experience, Consumer Loan Services
(CLS) allows your financial institution to say YES to mortgages.
CLS combines its competitive products with knowledgeable, experienced staff, creating a true partner for your financial institution.
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- APR (Annual Percentage Rate): This is the interest rate on the loan plus any points and closing costs, calculated over the term of the loan. This should be used as a guide for shopping for a mortgage, since it may show hidden fees. It is not the same as the interest rate on which your mortgage payments are calculated.
- ARM (Adjustable Rate Mortgage): This is a mortgage with a rate that is fixed for a specific initial period, but which adjusts at a specific frequency based on the given index. ARM loans are usually expressed as the following examples:
- 1/1 ARM: A mortgage with a fixed rate for one year that adjusts annually thereafter.
- 3/1 ARM: A mortgage with a fixed rate for three years that adjusts annually thereafter.
- 5/1 ARM: A mortgage with a fixed rate for five years that adjusts annually thereafter.
- Appraisal: An opinion of the market value of a property, made by a qualified appraiser.
- Balloon Mortgage: Usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in a contract.
- Construction Loan: A short-term interim loan for financing the cost of construction. The lender advances funds to the builder at periodic intervals as the work progresses.
- Debt-To-Income Ratio: The ratio, expressed as a percentage, which results when the borrower's monthly payment obligation on long-term debts is divided by his/her gross monthly income.
- Escrow: The portion of a borrower's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due.
- Fixed Rate Mortgage: A mortgage in which the interest rate is set for the term of the loan.
- Hazard Insurance: A form of insurance in which the insurance company protects the insured from specified losses, such as fire, windstorm, etc.
- Homeowner's Insurance: A policy that combines liability coverage and hazard insurance.
- Housing Expenses-To-Income Ratio: The ratio, expressed as a percentage, which results when a borrower's housing expenses are divided by his/her gross monthly income.
- Index: A published interest rate against which a lender measures the difference between the current interest rate on an adjustable rate mortgage and that earned on other investments, which is then used to adjust the interest rate.
- Jumbo Loan: A loan that is larger than $417,000.
- Loan-To-Value Ratio: The relationship between the amount of the mortgage loan and the appraised value of the property, expressed as a percentage.
- Mortgage Insurance (Private Mortgage Insurance or PMI): Money paid to insure the mortgage when the down payment is less than 20 percent. It protects a lender against a loss if the borrower defaults.
- Pre-Payment: A privilege in a mortgage permitting the borrower to make payments in advance of their due date.
- Points: One point equals 1% of the mortgage amount. This is a closing cost and may be tax deductible (have members consult their tax advisor). Typically, the more points paid at the time of closing, the lower the interest rate on the mortgage.
- Title Insurance: A policy, usually issued by a title insurance company, which insures a homebuyer against errors in the title search. The cost of the policy is usually a function of the value of the property, and is often paid for by the purchaser and/or seller.
- Truth-in-lending: A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the APR and other charges.
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