Found 3 blog entries tagged as lender.

Real Estate Word of the Day: Lender

A lender is a financial institution or individual that provides funds to borrowers with the expectation that the money will be repaid, typically with interest. In real estate, lenders provide the capital needed to purchase properties. These can include banks, credit unions, mortgage companies, and even private lenders.

The primary role of a lender in real estate is to finance the purchase of property. When you apply for a mortgage, the lender assesses your financial situation to determine your ability to repay the loan. This involves evaluating your credit score, income, debt-to-income ratio, and other financial metrics. Based on this assessment, the lender will offer you a loan amount, interest rate, and…

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What is Private Mortgage Insurance?

Private Mortgage Insurance, or PMI, is an insurance policy that pays out to a lender in case a homeowner defaults on a mortgage.

The homeowner pays a monthly or one-time premium on their mortgage payments, but the lender is the one getting the protection.

PMI is usually requested for and arranged by the lender, and is offered by private insurance companies. Lenders usually request PMI if the homeowner wishes to put less than a 20% downpayment on the house, and usually require the policy to be in place until there is at least a 20% Loan-To-Value, or LTV ratio on the house. The LTV ratio is calculated simply by taking the value of a loan on a house and dividing it by the value of the house. For example, if a…

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What is RESPA?

RESPA, or the Federal Real Estate Settlement Procedures Act, is a federal act passed by congress in 1974. After being controlled under U.S. Department of Housing and Urban Development (HUD), responsibility for the act was assumed by the Consumer Financial Protection Bureau (CFPB) in 2011.


The act regulates the real estate settlement process by requiring lenders, mortgage brokers or servicers of home loans to provide disclosures to borrowers that will inform them about real estate transactions, settlement services, relevant consumer protection laws and any other important and relevant information connected to the cost of the real estate settlement process. Any business relationships between closing service providers and other parties…

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