Mortgage glossary

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Daily interest: interest is calculated on the balance outstanding each day. So, when you make a payment, interest is calculated on the new balance straightaway. This is usually better than annual interest.

Debt: an obligation. Specifically, the amount owed.

Debt to income ratio: a comparison of gross income to housing and non-housing expenses; With the FHA, the-monthly mortgage payment should be no more than 29% of monthly gross income (before taxes) and the mortgage payment combined with non-housing debts should not exceed 41% of income. FFI mortgage glossary.

Deed: the document that transfers ownership of a property.

Deed in lieu: to avoid foreclosure ("in lieu" of foreclosure), a deed is given to the lender to fulfill the obligation to repay the debt; this process doesn't allow the borrower to remain in the house but helps avoid the costs, time, and effort associated with foreclosure.

Deed Of Trust: used in place of a mortgage in some states. The deed to a property is held by a trustee (title company or other third party) with the condition that it will be conveyed to the borrower when the mortgage is paid off. FFI mortgage glossary.

Default: the failure of a borrower to comply with the terms of a note or the provisions of a mortgage.

Defective title policy: is an insurance policy taken out where a defect in the title to the property has been discovered. Where a defect has been discovered, C&G would insist on the policy to protect our security.

Delinquency: failure of a borrower to make timely mortgage payments under a loan agreement.

Department of Housing and Urban Development (HUD): A Department within the federal government which aids people with the purchase of property through guaranteed loans, energy efficient home improvement loans, general home improvement loans, refinancing options, loans for the disabled and elderly to renovate their housing, and much more. HUD also has a program where they sell homes for under market value to people who are looking to become home owners. Visit www.hud.gov for more information on the many services offered by the Department of Housing and Urban Development. FFI mortgage glossary.

Deposit: two deposits may be payable by the buyer:

         1. A reservation charge. The buyer pays this as a sign of commitment when they initially agree to buy the property.

         2. The deposit. A percentage of the price of the property, paid when contracts are exchanged.

Depreciation: a decline in the value of property; the opposite of appreciation.

Discount point: normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount, discount points are paid to reduce the interest rate on a loan.

Down payment: the portion of a home's purchase price that is paid in cash and is not part of the mortgage loan. FFI mortgage glossary.

Drawdown date: drawdown is the date when the mortgage starts.

Drawdown deadline: some mortgage funds are available for a limited period only and usually these mortgages must start by a certain date - the drawdown deadline.

Due On Sale: a provision which requires that the remaining balance due be paid if the borrower sells the property or transfers title to another party. FFI mortgage glossary.