Insurance Terms Glossary
Below are commonly used terms in the loan process for manufactured homes. Becoming familiar with these terms and knowing the language in your policy can help you make a more informed decision in choosing insurance coverage.
A
Amortization
The process of repaying of a loan principal over time.
Annual Percentage Rate (APR)
The rate of interest on your loan, including all associated costs.
Appraisal
An estimate of the value of a home made by an appraiser.
C
Closing
The final step in the process of loan process when the home and funds legally change hands between the buyer, seller, and lender.
Comparative Market Analysis
An estimate of the value of a home based on comparing sales of properties of similiar characteristics.
Cosigner
A person who is willing to sign as a party to your loan obligations in case of default on payments.
Credit Report
A report from qualified credit bureau that details your credit history including number of times that monthly payments were delinquent on previous debts.
D
Debt Ratio
A financial calculation that sums all your monthly debt payments including monthly loan payment, divide by your monthly income.
Down Payment
Inital money that is put down on an asset.
E
Equity
The amount between the market value (of an asset) and current indebtedness to the asset.
F
Fair Market Value
Price that an asset (such as a home) would sell for in a competetive market with a willing buyer and seller.
Fixed Rate Loan
A loan that remains constant for the duration of its life.
Foreclosure
Process in which a lender takes possession of an asset on which the borrower had defaulted.
G
Gross Income
Total income before taxes and monthly deductions such as bills.
I
Interest
Total amount charged by a lender for borrowing money, usually expressed in percentage.
M
Mortgage Broker
An entity that arranges loans for borrowers.
P
Principal
The amount of debt left on a loan.
R
Refinance
The renewal of an existing loan by the same borrower.
T
Term
The length of a loan.
Title
The legal document conferring ownership of an asset (such as a home).
U
Underwriting
The process of a lender deciding whether to make a loan based on credit history, employment history, assets, and other factors.