Real Estate Glossary

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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. 

The document that transfers ownership of a property. 

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. 

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

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

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.