Homepage > Mobile Home Loans > Loan Terminology Manufactured Home Loan Terminology
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Assessed Value: The value placed on a manufactured home by a public tax assessor for the purpose of determining property taxes. This is considered the least reliable method of determining a manufactured home value and should be given little weight when making a buying or selling decision.
Bankruptcy: The inability of a debtor to pay one's financial debts when due and where relief has been sought and has been granted though a special court action that makes it possible to resolve or eliminate the debtor's debts.
Borrower: The person who applies for and obtains a manufactured home mortgage loan.
Chattel: A loan secured against personal property, which is common in the financing of manufactured homes.
Credit Report: A record of how a consumer has paid credit in the past. Used as a guide to determine a potential manufactured home buyer's creditworthiness.
Debt-to-Income Ratio: The maximum percentage of a borrower's gross monthly income that can be spent on the mobile home payment and all other creditor debts.
Down payment: An initial partial payment of the total selling price.
Escrow: An arrangement for the deposit of instruments and/or the handling of funds with instructions with a neutral third party to carry out the provisions of the agreement or contract when the specified conditions have been met.
Fixed-Rate Mortgage: A loan where the interest rate and payments remain the same over the life of the loan. All of Chattel Mortgage loans have a fixed rate.
Hard money: The cash including the cash proceeds from a loan as distinguished from credit extended by a seller. See Soft money.
Housing Ratio: The maximum percentage of a borrower's gross monthly income that can be used to make the monthly mortgage payments and land or lot rent. Also called "housing allowance".
Interest rate: The percentage of a sum of money charged for its use and like rent paid for use of the money. It is expressed as a percentage - usually annually, but can also be monthly or daily - of the sum borrowed.
Lender: The entity, business or person who offers a mortgage loan.
Loan application: A source of information on which a lender bases a decision about making a loan which defines the loan contract, shows the desired loan amount, the repayment terms, the name of the borrower, place of employment, salary, bank accounts, credit references and describes the real estate that is to be mortgaged.
Loan terms: The conditions on which the mortgage is made including the rate and the length of the repayment period
Manufactured Home: A home built entirely in a factory under a federal building code administered by the Department of Housing and Urban Development (HUD) that went into effect June 15, 1976.
Mobile Home: A factory constructed home built from 1970 to June 15, 1976.
Notary public: A government-appointed officer having the authority to take the acknowledgments of persons executing or signing documents and a party who signs the certificate and affixes an official seal.
Note: A unilateral written agreement acknowledging a debt concerning real property that contains an express and absolute promise with the signer promising to pay according to the specified terms and conditions to a named person, or order, or bearer, a definite sum of money at a specified date or on demand and that usually provides for interest and which is secured by a mortgage or trust deed. Also called a promissory note.
Personal property: Any property which is not real property.
Points: A charge assessed by a lending institution to increase the yield of a mortgage loan above the contract rate to the market rate so that it is competitive with other investments and is equal to the difference between the stated principal amount on the note and the lesser amount loaned. One point equals 1 percent of the loan amount. See Discount points.
Prime rate: The lowest commercial interest rate charged by banks on short-term loans to their most creditworthy customers.
Property tax: A government levy on privately owned property based on its market value or other uniformly-applied standard which is sometimes referred to as ad valorem tax or real estate tax.
Purchase Offer: A purchase proposal to the seller of a house, telling the amount a certain buyer would pay for the house and other conditions that would have to be met before the proposed home sale.
Real Estate Broker: A real estate agent that is authorized to open and run his or her own agency. Most states require real estate brokers to also be licensed dealers when selling manufactured homes in parks or communities where the land is leased.
Second Mortgage: A home loan that has rights subordinate to the rights of the first mortgage. Not normally offered to manufactured homes located in parks and/or leased lot communities.
Subprime loan: A loan that is offered at a rate above prime to individuals who do not qualify for prime rate loans. Subprime loans tend to have a rate that is 0.1% to 0.6% higher than the prime rate. Although the additional percentage may seem small, for mortgages and other large loans, this translates to thousands of dollars worth of additional interest payments.
Tax credit: A credit received for a particular item such as a solar energy credit that becomes a direct reduction from the amount of tax owed.
Term mortgage: A specific type of loan having a stated length which is normally under 5 years, on which only interest is paid and at the expiration of the term, the entire principal is paid. See Straight loan.
Title: The indicator of the "fee" position of the lawful owner and his or her rights to the property and its "bundle of rights" and combines of all elements constituting proof of ownership.
Title Insurance: Insurance to protect the lender (lender's policy) or the buyer (owner's policy) against loss arising from disputes over ownership of a property.
Underwriting: The process of analyzing a borrower's finances and payment history in order to approve or deny a loan.
Variable interest rate: An interest rate that fluctuates with the current cost of money; subject to adjustment if the prevailing rate moves up or down. See Variable Rate Mortgage.
Variable Rate Mortgage: (VRM) An interest rate in a real estate loan which by the terms of the note varies upward or downward over the term of the loan depending on current money market conditions.
Verification: The process of making sure that all of the borrower's loan application information is accurate.
Walk-Through: A final inspection of the property by the buyer to determine that the property is as described in the purchase agreement, which is usually conducted right before closing.
Zoning: A county or city law stating the types of use to which properties can be put in specific areas.
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