Mortgage Brokers and Lenders Industry Terminology

“We must document ATR with income, assets, and DTI before issuing the approval.”; “This non-QM product still complies with ATR.”; “Tax transcripts were pulled to support ATR.”

“Client wants a 7/6 ARM with a 2/1/5 cap structure.”; “The ARM’s index is SOFR plus a 2.25% margin.”; “After the fixed period, the rate adjusts every six months.”

“The 30-year amortization keeps the payment affordable.”; “Here’s the amortization schedule showing principal vs. interest.”; “A 15-year amortization reduces total interest paid.”

“APR is higher than the note rate because it includes certain fees.”; “We must disclose APR accurately under TILA.”; “The APR trigger required redisclosure.”

“The appraisal came in at $500,000, supporting the purchase price.”; “We received an appraisal waiver from DU.”; “AMC has assigned an appraiser to the order.”

“DU returned Approve/Eligible.”; “LPA findings require one month reserves.”; “We’ll run AUS after uploading income docs.”

“The LLPA is 125 bps.”; “Pricing improved 20 bps this morning.”; “Comp is set at 150 bps lender‑paid.”

“Borrower is taking $80,000 cash out to consolidate debt.”; “Cash-out hits pricing with additional LLPAs.”; “Seasoning rules apply for cash‑out on this product.”

“Title, appraisal, and recording fees are part of closing costs.”; “Seller credits can offset closing costs.”; “LE and CD itemize closing costs by tolerance category.”

“CD must be received three business days before consummation.”; “A major APR change triggers a new CD and waiting period.”; “Balance the CD with title before signing.”

“1st + HELOC brings CLTV to 88%.”; “Program max CLTV is 85%.”; “We need a subordination to keep CLTV in range.”

“The loan fits under the FHFA county limit, so it’s conforming.”; “Conforming LLPA matrix applies.”; “We’ll deliver the loan to Fannie.”

“This is a conventional purchase with 5% down.”; “PMI applies on conventional above 80% LTV.”; “Not FHA, VA, or USDA—this is conventional.”

“Back‑end DTI is 44% with taxes and insurance.”; “The program caps DTI at 50% with AUS Approve/Eligible.”; “Paying off the auto loan drops DTI by 3%.”

“Borrower paid 1.0 point to lower the rate.”; “Pricing shows a 0.375% rate drop for one point.”; “Points and fees must stay under QM caps.”

“City DPA provides a forgivable second.”; “Layering DPA with FHA at 3.5% down.”; “DPA follows its own income and property rules.”

“Taxes and insurance are escrowed.”; “Escrow waiver adds a pricing hit.”; “Servicer adjusts escrow after tax reassessment.”

“DU Approve/Eligible allows 3% down.”; “This condo needs Fannie project approval.”; “We’ll sell servicing‑retained to Fannie.”

“FHA allows 3.5% down with UFMIP and annual MIP.”; “Manual underwrite per FHA if AUS is Refer.”; “Property must meet FHA minimum standards.”

“30‑year fixed at 6.75% note rate.”; “FRM avoids payment shock vs. ARM.”; “Pricing is better on the 15‑year fixed.”

“LPA Accept allows alternative income documentation.”; “We’ll deliver this to Freddie post‑funding.”; “Freddie condo review differs from Fannie’s.”

“We’ll pool these FHA/VA loans into a Ginnie MBS.”; “Ginnie pricing tightened this week.”; “GNMA guarantees pass‑through payments to investors.”

“Need 30 days of paystubs and two years W‑2s.”; “Self‑employed requires tax returns and possibly P&L.”; “Order 4506‑C for tax transcripts.”

“The ARM is tied to 30‑day SOFR.”; “Index plus 2.25% margin sets the adjusted rate.”; “CMT index is used on this legacy ARM.”

“Lock for 45 days to cover the build time.”; “We did a float‑down after the rate drop.”; “A lock extension costs 10 bps.”

“Loan amount exceeds the FHFA limit—this is jumbo.”; “Jumbo overlays require 12 months reserves.”; “Rate is higher than conforming pricing.”

“Broker comp is 150 bps LPC.”; “On LPC, borrower can still pay discount points.”; “LO comp can’t vary per-loan except per written policy.”

“We must deliver the LE within three business days of application.”; “Reissue the LE for a valid changed circumstance.”; “Fee variances fall under TRID tolerances.”

“LLPAs increased for high LTV, low FICO.”; “Second home and cash‑out add LLPAs.”; “LLPA matrix drives the price hit.”

“95% LTV requires PMI.”; “Appraisal raised value, lowering LTV.”; “Max LTV for cash‑out is 80%.”

“Margin is 2.25%, fixed for the life of the loan.”; “Index at 5.0% plus margin gives 7.25%.”; “Caps limit how far above index + margin the rate can go.”

“TBA MBS prices improved this morning.”; “We’ll securitize into a Fannie MBS pool.”; “Servicing values impact MBS execution.”

“Your servicer will collect payments and manage escrow.”; “There’s a servicing transfer 60 days post‑close.”; “Call the servicer for forbearance options.”

“Bank‑statement program is non‑QM.”; “Interest‑only feature pushes this to non‑QM.”; “Non‑QM still requires ATR documentation.”

“Ensure points and fees stay under the QM threshold.”; “One discount point plus a $1,195 origination fee.”; “Lender credits can offset third‑party fees.”

“No prepay penalty—this is a QM.”; “Non‑QM investor requires a 3‑year step‑down.”; “Early payoff within the lockout triggers the penalty.”

“BPMI monthly cancels at 78% LTV by HOPA.”; “Single‑premium PMI improves payment.”; “LPMI trades a higher rate for no monthly PMI.”

“APR spread qualifies for QM safe harbor.”; “Verify points and fees are within QM limits.”; “Interest‑only makes it non‑QM.”

“Par is 6.625% with a 100.00 price.”; “Rebates improve 25 bps at 6.875%.”; “Investor’s rate sheet updates twice daily.”

“Jumbo requires 12 months of PITIA in reserves.”; “AUS calls for two months reserves.”; “Stocks and retirement accounts can count as reserves.”

“Primary‑residence refis have a three‑day rescission.”; “Funding occurs after rescission expires.”; “All owners with an interest must get the notice.”

“We’ll sell SRP‑retained to an aggregator.”; “Best‑efforts vs. mandatory delivery affects price.”; “The TBA market drives primary rates.”

“Lender’s title policy is required at closing.”; “An owner’s policy protects the buyer.”; “Title cleared the old lien before funding.”

“TRID requires the LE and CD with specific timing.”; “Changed circumstance permits a revised LE.”; “TRID tolerance cures are due within 60 days.”

“APR and finance charge definitions come from TILA.”; “LO Comp Rule is under TILA/Reg Z.”; “Right of rescission is a TILA provision.”

“Underwriter issued conditional approval.”; “Manual underwrite follows FHA guidelines.”; “Condition cleared after updated VOE.”

“Please complete the URLA sections 1–4 online.”; “Co‑borrower info goes on a separate URLA.”; “Data maps to DU/LPA from the 1003.”

“USDA allows zero down in eligible rural areas.”; “Income must be under the county limit.”; “Appraisal needs USDA conditional commitment.”

“Veteran’s COE shows full entitlement.”; “VA funding fee is financed.”; “Residual income test passed for the region.”

“As a broker, we submit to multiple wholesale lenders.”; “AE confirmed LPC at 175 bps.”; “Wholesale price sheets updated after the CPI print.”