A credit score is numerical score calculated by an algorithm based on factual information obtained from an individual’s credit report.
The purpose is to measure a borrower’s credit worthiness.
A lender will have their own internal policies on how much a role credit scoring plays in their loan assessment procedures.
Junk fees are cost items that spruce up at the closing of a loan which the borrower was not informed of beforehand.
In a way, these expenses are the hidden costs items that everybody warns just about anybody about.
They are never expressed as a percentage of the loan like points. But are instead quoted at a dollar amount.
A conforming mortgage refers to mortgages that conform to government sponsored enterprise (GSE) guidelines. Making it eligible for purchase by Fannie Mae and Freddie Mac.
A loan that does not meet the guidelines is referred to as a non-conforming loan.
The guidelines cover a wide array of requirements including those for:
A margin refers to the percentage amount on an adjustable rate mortgage that is added to the index rate when calculating the payment of the borrower.
It is also sometimes call the spread.
For example, if the interest rate of a loan is at COFI + 2%, the margin is the 2% added.