Tag: Lending

Loan Application Fee definition explanation

What is Loan Application Fee?
A fee charged to process an application for a loan, such as a home mortgage from a lender or mortgage broker. Loan application fees are charged to cover some of the costs involved in processing the application including credit checks, property appraisals and basic administrative costs. Read more for examples and further explanation including related video clips and also comments
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Credit Worthiness definition explanation

What is Credit Worthiness?
An assessment of the likelihood that a borrower will default on their debt obligations. It is based upon factors, such as their history of repayment and their credit score. Lending institutions also consider the availability of assets and extent of liabilities to determine the probability of default. Read more for examples and further explanation including related video clips and also comments
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Asset-Liability Committee – ALCO definition explanation

What is Asset-Liability Committee – ALCO?
A risk-management committee in a bank or other lending institution that generally comprises the senior-management levels of the institution. The ALCO’s primary goal is to evaluate, monitor and approve practices relating to risk due to imbalances in the capital structure. Read more for examples and further explanation including related video clips and also comments
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Firm Commitment definition explanation

What is Firm Commitment?
1. A lending institution’s promise to enter into a loan agreement with a specific entity within a certain period of time.

2. An underwriter’s agreement to assume all inventory risk and purchase all securities directly from the issuer for sale to the public at the price specified. Read more for examples and further explanation including related video clips and also comments
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Mortgage Index definition explanation

What is Mortgage Index?
The benchmark interest rate an adjustable-rate mortgage’s fully indexed interest rate is based on. An adjustable-rate mortgage’s interest rate, known as the fully indexed interest rate, is comprised of an index value plus a margin. The margin tends to be constant, but the index’s value is variable. Several benchmark interest rates serve as mortgage indexes. Read more for examples and further explanation including related video clips and also comments
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Funded Status definition explanation

What is Funded Status?
The status of pension plan that has accumulated assets that have been set aside for the payment of retirement benefits to employees. Unfunded plans, also called pay-as-you-go arrangements, do not have assets set aside and retirement benefits are usually paid directly from employer contributions. Read more for examples and further explanation including related video clips and also comments
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Export-Import Bank Of The United States – Ex-Im Bank definition explanation

What is Export-Import Bank Of The United States – Ex-Im Bank?
A federal agency responsible for facilitating international trade by financing the purchase of domestic exports and providing guarantees or insurance for foreign lines of credit. The Ex-Im bank was created in 1934, after congress established it to be the official export credit agency in the United States. Read more for examples and further explanation including related video clips and also comments
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Pipeline definition explanation

What is Pipeline?
1) An investment company whose purpose is to collect investment funds from a pool of individual investors and invest them in financial securities.

2) The underwriting procedure which must be completed by the Securities & Exchange Commission (SEC) before a security can be offered for sale to the public.

3) A type of risk most often present in mortgage transactions. It expresses the potential for change in financial factors during the time lapse between the mortgage application and the purchase of the property. Read more for examples and further explanation including related video clips and also comments
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