The combined total of credit card, auto, mortgage or other debt which you pay on a monthly basis. Deed of Trust Mostly used in western states. This instrument is used to pledge the real estate as security for a the loan, similar to a mortgage. An amount usually paid to lower the interest rate charged. The difference between the purchase price and the part of the purchase price being financed.
Most lenders require the down payment to be paid from the buyer's owned funds.
Gifts from related parties are sometimes acceptable, but must be disclosed to the lender. Effective Interest Rate Cost of credit on a yearly basis expressed as a percentage. This is useful when comparing loan programs with different rates and points. Encumbrance The claim on a property by another party which would normally affect the ability to transfer ownership of the property. A loan in which the Federal Housing Administration has insured, against losses incurred, the lender which may be due to default.