Top: Business: Finance and Insurance: Mortgages: Terminology: D



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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.


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Deed

the document that transfers ownership of a property.


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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.


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Default

the inability to pay monthly mortgage payments in a timely manner or to otherwise meet the mortgage terms.


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Delinquency

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


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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.


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Down payment

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



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