A down payment is the monetary difference between the loan amount and the agreed transaction price between buyer and seller.
Some circles describe down payment as the difference in loan amount and value of property.
But as transaction prices are often above or below value, the closing price is a better measure of down payment for borrowers.
A portfolio lender is one who holds onto the loans it originates instead of selling it on the secondary mortgage markets.
Because portfolio lenders don’t pass on their loans to institutional investors on the secondary market, their loans do not have to be originated according to a certain standard which that market demands.
This lack of buyer requirements means that they can sometime be very flexible in their underwriting criteria.
The teaser rate of a mortgage refers to the initial years of the loan when it commences during which interest rate is lower than the fully index rate.
Sometimes the teaser rate can be so low that it can seem to be crazy!
The goal of these teaser rates is of course, to draw attention and acquire more borrowers for lenders.
Direct lenders are small scale lenders that is a fraction of the size of regular banks.
This is opposed to correspondent lenders like established mortgage brokers who are making loans in a larger lender’s name.
These lenders label themselves as direct lenders to market themselves as not being brokers. And also to market other products to consumers.