VA Home Loan Program Definitions
Getting a VA Home Loan Guarantee and going through the mortgage loan process can be confusing at times. There are many different terms that are used that you may not know the real meaning of. In order to stay on top of the situation and understand exactly what is happening during the loan process, it is important to know the definitions of terms used in the home loan process.
Some of the important definitions to know are:
- Credit Package- Any verification information to determine the creditworthiness of an applicant for a mortgage loan, refinancing, or assumption of a loan
- Default- When a borrow fails to comply with the loan terms and does not make the payments as agreed.
- Guaranty- An obligation to repay a certain agreed amount of a loan in the case of default by the original borrower.
- Holder- The lending company or any company the mortgage loan was conveyed to.
- Lender- The mortgage company that authorized the loan or any company, corporation, partnership, or entity that has purchased and assumed control of the loan debt.
- Indebtedness- The amount of the mortgage loan that includes the interest, principal, and any other owed money by the borrower, except late fees.
- Lien- A power over or financial interest in the property of a borrower. This is a hold over the property, or other asset where if the borrower defaults the lender can take possession of the property that was used for collateral.
- Loan- The unpaid amount of money and interest that a borrower owes.
- Lot- a piece or parcel of land.
- Manufactured Home- a trailer or home that is mobile and can be moved at the owner’s convenience. It also must contain permanent cooking, sanitary, sleeping, and eating facilities.
- Reasonable Value- the value a qualified unbiased appraiser recommends the home is worth to a purchaser.
- Repossession- taking possession of any collateral property that was defaulted on.
These are just some of the important terms to know and understand when getting a loan for a mortgage. Once you find a VA approved lender, ask them questions whenever you feel confused or aren’t sure of something. Make sure you fully understand everything that is going on through the process so that you feel confident in all your home purchasing and loan decisions.