Utah Mortgage Glossary

A federal rule requiring lenders to make a reasonable, good-faith determination that a borrower can repay a mortgage.

A written change or addition to the REPC signed by both parties.

A mortgage whose interest rate is fixed for an initial period (e.g., 5, 7, or 10 years) and then adjusts periodically based on an index plus a margin, subject to caps.

A negative escrow closing-line adjustment (Federal RESPA rule) ensuring the escrow account never holds more than two months of cushion.

The process of paying down loan principal and interest over time on a fixed schedule. Early payments are mostly interest; later payments are mostly principal.

A table showing every scheduled payment on a mortgage, split into principal and interest, with the remaining balance after each payment.

USDA annual fee (currently 0.35% of unpaid balance) paid monthly with the mortgage payment.

The FHA Annual Mortgage Insurance Premium paid monthly. Usually 0.15%–0.75% of the loan balance per year depending on term, LTV, and loan amount.

The cost of borrowing expressed as a yearly rate that includes interest plus certain lender fees, prepaid finance charges, and mortgage insurance. Useful for comparing loans.

A licensed appraiser's opinion of a property's market value, ordered by the lender and used to size the loan.

A REPC contingency letting the buyer renegotiate or cancel if the appraisal falls short of the contract price.

The difference when an appraisal comes in below contract price. Buyer options include bringing extra cash, renegotiating, or exercising an appraisal contingency.

A Fannie Mae or Freddie Mac approval that skips a full property appraisal, using automated valuation on qualifying purchase and refinance loans.

Federal rules preventing loan production staff from selecting or influencing appraisers.

An income-qualification method that divides eligible liquid assets by a period (often 60 or 84 months) to derive monthly qualifying income.

A recorded transfer of a mortgage or deed of trust from one lender to another.

A loan that can be transferred to a qualified buyer at the existing rate and terms. FHA, VA, and USDA are generally assumable; conventional loans are not.

Fannie Mae's Desktop Underwriter (DU), Freddie Mac's Loan Product Advisor (LPA), or agency systems that provide an initial credit decision and documentation requirements.

All monthly debt payments (housing + auto + student + credit cards + child support) divided by gross monthly income.

A loan whose remaining balance is due in a lump sum at the end of a shorter term than the amortization suggests.

A non-QM loan that qualifies self-employed borrowers using 12–24 months of business or personal bank deposits instead of tax returns.

One one-hundredth of a percentage point (0.01%). A rate drop from 6.50% to 6.25% is a 25-basis-point decrease.

Half of the monthly payment paid every two weeks, producing 13 monthly payments per year and shortening the loan term.

A mortgage funded by a housing agency's tax-exempt bond issuance, often paired with down payment assistance.

The number of months required for monthly refinance savings to exceed the total closing costs — the primary refinance decision metric.

Short-term financing that lets a buyer purchase a new home before selling the current one.

Paying money upfront to reduce the mortgage interest rate — either permanently (discount points) or temporarily (e.g., 2-1 buydown for the first two years).

The final amount a buyer must bring to closing — closing costs plus down payment minus credits and earnest money.

A refinance for more than what's owed on the current mortgage, with the difference paid to the borrower at closing.

The VA-issued document verifying a borrower's eligibility for a VA loan based on service history.

The historical sequence of recorded ownership and encumbrances for a property.

The lender's confirmation that all underwriting conditions are satisfied and the loan is ready to close.

The total of lender, third-party, and prepaid fees due at closing. Typically 2–5% of the loan amount for Utah buyers.

A federally required five-page disclosure delivered at least three business days before closing showing final rate, payment, and closing costs.

Combined Loan-to-Value — the sum of all liens divided by property value. Used to size HELOC and home equity loans.

The total of all liens divided by property value. Used when a HELOC or second lien exists.

Positive borrower attributes (large reserves, low LTV, strong credit) that support approval outside standard ratios.

Closing two related transactions (e.g., sale of current home and purchase of next home) on the same day, often within hours.

An underwriting approval subject to specified conditions the borrower must satisfy before closing.

Whether a condo project meets Fannie Mae, Freddie Mac, FHA, or VA project-approval standards — required for most conventional and government financing.

A conventional loan that meets Fannie Mae or Freddie Mac limits and guidelines, including the annually adjusted conforming loan limit.

Short-term financing to build a home, disbursed in draws and typically converted to a permanent mortgage at completion.

A single-close construction loan that automatically converts to a permanent mortgage at completion, avoiding a second closing.

A condition in the purchase contract that must be met (financing, appraisal, inspection) for the deal to proceed.

A mortgage not insured by a government agency, generally conforming to Fannie Mae and Freddie Mac guidelines.

A response to an offer that changes any material term — legally rejects the prior offer and starts a new one.

A record of a credit check. Hard inquiries can affect scores; mortgage rate shopping within 45 days generally counts as one inquiry.

A three-digit score (typically 300–850) summarizing consumer credit risk. Mortgages use FICO 2/4/5 models across three bureaus and take the middle score.

A payoff strategy that focuses cash on the highest-interest balance first to minimize total interest.

A cash-out refinance used to pay off higher-rate debts (credit cards, personal loans) with home equity.

The program-specific maximum back-end DTI (e.g., 45% for many conventional AUS approvals, higher with compensating factors).

A payoff strategy that focuses cash on the smallest balance first to build momentum.

Monthly debt payments divided by monthly gross income. Front-end DTI is housing only; back-end DTI includes all debt.

Voluntary transfer of the property back to the lender in exchange for release of the debt.

The Utah security instrument (used in place of a mortgage) that gives a trustee the power to sell the property to satisfy the debt in default.

Optional upfront fees paid to the lender to permanently lower the interest rate. One point equals 1% of the loan amount.

The portion of the purchase price the buyer pays out of pocket. Not the same as closing costs.

Grant, forgivable loan, or repayable-second programs (Utah Housing, city, or nonprofit) that help fund a buyer's down payment or closing costs.

The period (often 10 years) during which a HELOC borrower can draw funds and make interest-only payments on the outstanding balance.

A closing where documents sign but funds don't disburse until later (common with wet-funding delays or out-of-state loans). Utah is a wet-funding state.

A Debt-Service Coverage Ratio loan for investment properties that qualifies based on the property's rental income rather than the borrower's personal income.

The Utah REPC period for property investigation — inspections, HOA docs review, and repair negotiation.

A good-faith deposit made with the purchase offer, held in escrow and applied to down payment or closing costs at closing.

In Utah, the REPC governs earnest money handling. Deadlines for due diligence, financing, and appraisal condition earnest money return.

A recorded right allowing someone else to use part of the property for a specific purpose (utility, access, drainage).

Any claim, lien, easement, or restriction that limits how the owner can use or transfer the property.

An offer term automatically raising the buyer's price above competing offers up to a stated cap.

In Utah closings, a neutral third party (title/escrow company) holds funds and documents, disburses at closing, and often collects and pays taxes and insurance during the loan.

A lender-held account that collects a portion of monthly payments to pay property taxes and homeowners insurance when due.

An annual servicer review of escrow account activity that identifies shortages, surpluses, and next year's projected payment.

Funds retained at closing to cover a specific known repair or condition, released when the item is completed.

Payment from the servicer when the escrow analysis shows a surplus above the RESPA-allowed cushion.

A conventional-loan option for qualified borrowers (usually 20%+ down) to pay taxes and insurance directly rather than through the servicer.

A rate used to calculate a HECM's principal limit — separate from the initial interest rate that determines loan growth.

The FEMA-designated flood risk category for a property. Zones A and V require flood insurance for federally related mortgages.

An FHA renovation loan that finances a home purchase (or refinance) plus repair or remodel costs into a single mortgage.

A mortgage insured by the Federal Housing Administration allowing lower credit scores and 3.5% down payment for primary residences.

The maximum FHA-insurable loan amount for a county, adjusted annually. Utah limits vary by county — Salt Lake, Summit, and Wasatch typically higher.

A simplified FHA-to-FHA refinance that skips income re-verification and often the appraisal, designed to lower rate or payment quickly.

A REPC contingency period during which the buyer secures loan approval; if not met, earnest money is generally returned.

A mortgage where the interest rate stays the same for the entire loan term. Payment for principal and interest never changes.

An option on some rate locks that lets the borrower capture a lower market rate one time before closing, usually for a fee.

Separate insurance required when the property is in a FEMA Special Flood Hazard Area.

A temporary pause or reduction in mortgage payments, granted by the servicer for qualifying hardship. Missed payments remain owed.

The legal process a lender uses to seize and sell a property after default. Utah uses primarily non-judicial trustee-sale foreclosure.

Housing payment (PITI + HOA + MI) divided by gross monthly income.

Down payment or closing cost money from an eligible donor, documented with a gift letter and (usually) transfer paper trail.

When a family seller sells below market and the difference is treated as equity gifted to the buyer — often used as down payment.

USDA upfront fee (currently 1% of loan amount) financed into the loan.

Home Equity Conversion Mortgage — the FHA-insured reverse mortgage program.

HUD-required independent counseling every reverse mortgage borrower must complete before application.

A HECM that finances the purchase of a new primary residence in a single transaction, letting the buyer bring roughly 45–65% of the purchase price and use HECM proceeds for the rest.

The unused portion of a HECM line of credit grows over time at the current note rate plus 0.5%, increasing available borrowing power.

Home Equity Line of Credit — a revolving second lien secured by the home, with a draw period followed by a repayment period.

The lender-required document from a condo or PUD association verifying financial and legal condition of the community.

Homeowners association fees paid to a HOA for common area maintenance and services, included in DTI calculations.

A fixed-rate, lump-sum second mortgage secured by home equity. Payments are level over the term.

A buyer-hired professional evaluation of the physical condition of a home. Not the same as an appraisal.

Property insurance required by the lender, covering the dwelling and liability. First year premium is typically paid at closing.

A federal law governing PMI cancellation on borrower-paid conventional loans.

Another name for front-end DTI — housing payment divided by gross monthly income.

Another term for escrow account — the servicer's holding account for taxes and insurance.

The published benchmark rate an ARM adjusts against (e.g., SOFR, CMT, or the 1-year Treasury). New ARM rate = index + margin.

The percentage the lender charges to borrow the loan amount, expressed as an annual rate. It's one component of your monthly principal-and-interest payment.

A loan with an initial period of interest-only payments. Rare in modern first-lien residential lending; common on HELOC draw periods.

A mortgage on a non-owner-occupied rental property. Higher down payment, higher rates, and additional reserves apply.

VA Interest Rate Reduction Refinance Loan — a streamlined VA-to-VA refinance with reduced documentation, usually no appraisal, and a lower funding fee.

A mortgage that exceeds the conforming loan limit for the county. Underwriting is tighter and rates can differ from conforming loans.

Business income reported on IRS Schedule K-1 from partnerships or S-corps, evaluated for qualifying income.

A short-term loan to purchase unimproved land, often converted to a construction loan when building begins.

A fee charged when a mortgage payment is received after the grace period, typically 4–5% of principal-and-interest.

Money the lender credits the borrower toward closing costs in exchange for a slightly higher rate.

PMI paid by the lender in exchange for a higher interest rate. Cannot be removed like borrower-paid PMI.

A legal claim against a property to secure a debt — mortgages, tax liens, mechanic's liens, and judgment liens are common examples.

A federally required three-page disclosure delivered within three business days of application showing estimated rate, payment, and closing costs.

A permanent change to loan terms (rate, term, or balance) to help a struggling borrower avoid foreclosure.

The company that collects the mortgage payment, manages escrow, and handles borrower requests after closing. Often different from the originating lender.

The loan amount divided by the property's appraised value (or purchase price, whichever is lower). Drives PMI, program eligibility, and pricing.

A lender's commitment to hold a specific interest rate for a set period (commonly 15–60 days) while the loan is processed and closed.

Human underwriter review used when AUS refers a file or program requires it (e.g., some manual VA and FHA loans).

A factory-built home on a permanent chassis. Financing requires HUD tags, real-property classification, and program-specific rules.

The fixed percentage added to the index to calculate a new ARM interest rate at each adjustment.

An event that triggers HECM repayment — the last borrower sells, moves out permanently for 12+ months, or passes away.

Mortgage Electronic Registration Systems — a nominee record-keeper for beneficial mortgage interests, avoiding assignment recording on every transfer.

The monthly PMI or MIP premium added to the mortgage payment when the loan exceeds program LTV thresholds.

The process of removing PMI once the loan reaches the required LTV — automatic termination at 78% LTV, or borrower-requested at 80% LTV per HPA.

A factory-built home assembled on a permanent foundation and titled as real property, financed like a site-built home.

The promissory note the borrower signs promising to repay the loan on stated terms. Separate from the deed of trust.

A situation where the monthly payment does not cover the interest due, so unpaid interest is added to the principal balance. Rare in modern first-lien mortgages.

A refinance where the lender pays closing costs in exchange for a higher interest rate. The costs are recovered through the higher rate over time.

A borrower on the loan who won't live in the home. Allowed on some FHA and conventional programs for income blending.

A mortgage that doesn't meet the federal Qualified Mortgage rule — used for self-employed borrowers, bank-statement income, DSCR investment loans, and other non-standard scenarios.

A loan feature meaning the borrower or their heirs will never owe more than the home's value at repayment. All HECMs are non-recourse and FHA-insured.

The interest rate stated on the mortgage note — the rate used to calculate monthly principal-and-interest.

The legal substitution of a new obligation or party for an old one — used in some assumption transactions.

Primary residence, second home, or investment property. Rates, LTV limits, and reserves vary by occupancy.

A sale in which the seller carries all or part of the financing rather than a traditional lender.

The interest rate available on a loan with no discount points paid and no lender credit received.

A significant increase in monthly housing payment — most often from an ARM adjustment or the end of a temporary buydown.

A servicer document showing the exact amount required to fully pay off a mortgage as of a specific date.

Principal, Interest, Taxes, Insurance — the components of a typical monthly mortgage payment (plus MI and HOA when applicable).

A conditional loan commitment issued after the lender verifies credit, income, and assets.

A quick lender estimate of borrowing capacity based on borrower-stated income and assets, without verification.

Interest owed from the day of closing through the end of the closing month, collected at closing.

Any payment of principal above the scheduled amount, which reduces total interest and can shorten the term.

A fee charged for paying off a mortgage early. Federally regulated and rare on modern owner-occupied Utah mortgages.

The maximum amount a HECM borrower can access, based on the youngest borrower's age, current expected interest rate, and property value up to the HECM limit.

Insurance on conventional loans with a down payment less than 20%. Protects the lender if the borrower defaults; removable when equity reaches 20–22%.

Utah property taxes assessed by the county and collected annually by the county treasurer, typically escrowed monthly.

Planned Unit Development — a subdivision with an HOA. Underwriting treats detached PUDs similar to single-family homes.

The signed agreement between buyer and seller. In Utah, the standard form is the REPC.

A category of mortgages that meets Consumer Financial Protection Bureau safety criteria, including limits on points, fees, and risky loan features.

A deed that transfers whatever interest the grantor has in the property without warranting title. Commonly used between spouses or family members.

A service that reports updates to the credit bureaus within days to reflect recent balance paydowns or corrections.

The maximum an ARM interest rate can adjust at first adjustment, per adjustment, and over the life of the loan.

A refinance that changes the interest rate, loan term, or both — with limited or no cash back to the borrower.

Applying a large principal payment and re-amortizing the loan for a lower monthly payment, without changing the rate or term. Typically requires a small fee.

A formal request to the appraiser to reconsider valuation with additional comparable sales or documented factual errors.

County recorder fees to record the deed and deed of trust at closing.

Replacing an existing mortgage with a new loan — usually to lower the rate, shorten the term, remove mortgage insurance, or access equity.

The CFPB regulation implementing RESPA.

The Federal Reserve regulation implementing TILA.

Bringing a defaulted loan current by paying all past-due amounts, fees, and costs, halting foreclosure.

A form of escrow holdback for post-closing repairs required by the appraisal (weather-permitted repairs, minor items).

The phase after a HELOC draw period ends (often 15–20 years) when principal-and-interest payments amortize the balance.

Program-mandated months of PITI in liquid reserves after closing. Investment properties and second homes require more.

Liquid assets remaining after closing, often measured in months of PITI required by program.

VA loan requirement that borrowers have a minimum monthly leftover after paying housing and other obligations, varying by family size and region.

Real Estate Settlement Procedures Act — federal law governing settlement services, escrow accounting, and referral-fee prohibitions.

A mortgage for homeowners 62+ that converts equity into cash, credit line, or monthly payments with no required monthly principal-and-interest payment while living in the home.

A mortgage for a vacation or non-primary residence. Occupancy rules require the borrower to use it as a second home, not a rental.

Any mortgage subordinate to the first lien on the property (HELOC, home equity loan, or second-lien purchase mortgage).

The remaining VA entitlement that lets many veterans hold two VA loans simultaneously (e.g., after PCS or investment retention).

A borrower who owns 25%+ of a business. Underwriting typically averages two years of tax returns or uses bank-statement or P&L programs.

Money the seller agrees to credit toward the buyer's closing costs, subject to program-specific limits.

Utah seller-completed disclosure of known material property conditions, delivered during due diligence.

The sale or transfer of loan servicing rights from one servicer to another, with 15-day borrower notice required.

A Life Expectancy Set-Aside — funds carved from HECM proceeds to pay future property taxes and insurance when required by financial assessment.

A property sale for less than the mortgage balance, with lender approval to release the lien for less than owed.

A one-time HOA charge for capital repairs or improvements beyond normal dues.

A conventional MI structure that combines an upfront premium with a smaller monthly premium, often used to lower monthly payment.

A simplified refinance (FHA Streamline, VA IRRRL, USDA Streamline) with reduced documentation and, usually, no appraisal.

A written agreement placing one lien behind another in priority — often required when refinancing a first mortgage while keeping an existing HELOC.

A seller- or lender-funded buydown that reduces the borrower's rate for the first 1–3 years of the loan (e.g., 3-2-1 or 2-1 buydown).

A VA appraisal process that notifies the lender before a low appraisal is issued, giving the parties a chance to submit supporting sales.

A title company's preliminary report of the property's title status, listing encumbrances, liens, easements, and requirements to close.

Insurance protecting the lender (loan policy) and, optionally, the buyer (owner's policy) from losses due to title defects, liens, or ownership disputes.

A tax on property transfer. Utah does not have a state real estate transfer tax.

A single credit report combining data from Equifax, Experian, and TransUnion — the standard mortgage credit report.

TILA-RESPA Integrated Disclosure — the federal rule governing the Loan Estimate and Closing Disclosure forms and timing.

The neutral third party named in a Deed of Trust who holds title for the lender's benefit and can conduct a non-judicial foreclosure sale in Utah.

Utah Division of Real Estate advertising rules for licensed loan originators, brokers, and agents.

Federal law requiring disclosure of loan cost information, including APR, finance charges, and total payments.

FHA Upfront Mortgage Insurance Premium — currently 1.75% of the base loan amount, typically financed into the loan.

The lender's review of a borrower's credit, income, assets, and property to decide whether to approve the loan and on what terms.

USDA property and household income eligibility, based on USDA-designated rural areas and income limits by county and household size.

A USDA Rural Development-guaranteed mortgage with zero down payment for eligible rural and many Utah suburban properties within income limits.

The county office where deeds, deeds of trust, and lien releases must be recorded to give public notice.

The state-chartered agency that offers down payment assistance and first-time buyer mortgage programs across Utah.

The valuation notice mailed by the county each summer that triggers appeal windows before the annual tax notice arrives.

Real Estate Purchase Contract — the standard Utah residential purchase contract published by the Utah Division of Real Estate.

Utah's primary non-judicial foreclosure process where the trustee named in the Deed of Trust conducts a public sale after the required notice period.

The dollar amount the VA guarantees on a veteran's loan. Full entitlement lets qualified veterans borrow with no down payment and no county loan limits with most lenders.

A required VA purchase contract addendum letting a veteran walk away from a purchase if the appraisal comes in below the sales price, without losing earnest money.

A one-time fee, typically 1.25%–3.3%, financed into the VA loan. Waived for veterans with a service-connected disability rating.

A mortgage guaranteed by the U.S. Department of Veterans Affairs offering zero-down financing and no monthly mortgage insurance to eligible veterans, service members, and qualifying spouses.

A lender's confirmation of asset balances with a financial institution.

A lender's confirmation of employment and income directly with the employer, made both early in underwriting and again within days of closing.

A deed in which the grantor warrants clean title. The standard purchase-transaction deed in Utah.

Utah requirement that mortgage funds be available at signing before the loan closes.

A common closing-time scam where criminals send fake wiring instructions. Always verify wire instructions by phone using a known number.

An inspection for termites and other wood-destroying organisms, sometimes required for VA and USDA loans in Utah high-risk zip codes.

Money the lender gives the borrower toward closing costs in exchange for accepting a slightly higher interest rate.