The assumption fee is a charge levied by a lender to a buyer who assumes the existing loan on the subject property. It compensates the lender for administrative costs associated with transferring the loan.
A bank line, also known as a line of credit, refers to a bank's moral commitment to lend to a particular borrower up to a specified maximum during a specified period, usually one year. Unlike a legal commitment, it does not involve charging a commitment fee.
A consumer finance company is a type of financial institution that specializes in offering credit products and services to individuals who require loans for personal use.
A credit analyst is a professional responsible for evaluating the financial affairs of individuals or corporations to determine their creditworthiness. They assess the risk associated with lending and determine credit ratings.
A credit line, also known as a line of credit, refers to a pre-approved loan amount that a borrower can draw upon as needed and repay either immediately or over time. It is commonly used for short-term borrowing needs.
A facility fee is a charge that a borrower must pay to a lender for the opportunity to borrow additional funds. Typically applied in syndicated loan agreements, the facility fee compensates the lenders for making credit available.
A floor loan represents the minimum amount that a lender is willing to advance to a borrower, typically within real estate or construction financing.
Loan Closing refers to the final step in the process of securing a loan, particularly in real estate transactions. It encompasses all activities that transpire when the borrower and lender settle the terms and conditions of the loan agreement.
A Loan Origination Fee is a charge levied by a lender for processing a new loan application, used as compensation for putting the loan in place.
A loan package is a comprehensive set of documents and information submitted to a lender to apply for a loan. These documents usually include a loan application, financial statements, and other pertinent information.
The Loan-to-Value (LTV) ratio is a financial metric used by lenders to evaluate the risk involved in lending a borrower against the value of the asset being purchased.
A Mortgage REIT is a type of Real Estate Investment Trust that lends stockholder capital to real estate builders and buyers. Mortgage REITs also borrow from banks and relend that money at higher interest rates.
A Mortgage-Backed Security (MBS) is a type of asset-backed security that is secured by a collection of mortgages. These securities enable banks to lend more aggressively while transferring the associated risk to investors.
Non-recourse finance is a type of bank loan where the lender can only claim repayments from the project's profits, not from other borrower assets.
A participation loan is a financial arrangement where multiple lenders share in providing a loan, typically with one lender acting as the lead to service the loan. This can distribute the risk and allow for larger loan amounts than a single lender might handle.
A seasoned loan is a bond or mortgage on which several payments have been collected. These types of loans are considered lower risk and more marketable than newly issued loans.
A Transferable Loan Facility (TLF) allows a lender to transfer the rights of the loan to a third party without the need to inform the borrower, making it a flexible financial instrument.
Unsecured Loan Stock (ULS) is a type of loan stock that is not backed by any assets or collateral, making it riskier for lenders compared to secured loan stocks.
A term used in the secondary mortgage market to distinguish an investment that represents an original residential mortgage loan (whole loan) from a loan representing a participation with one or more lenders or a pass-through security representing a pool of mortgages.
