Glossary of Terms
Credit Glossary
It's hard enough trying to stay on top of your credit let alone learn the industry lingo. We've compiled a glossary of industry terms to help you stay ahead of the curve when dealing with your credit, auto loans, home loans, debt, and savings.
- Wage assignment
- A signed agreement by a buyer or borrower permitting a creditor to collect a certain portion of the debtor's wages from an employer in the event of a default.
- Warehouse Fee
- Many mortgage firms must borrow funds on a short term basis in order to originate loans. These loans are to be sold later in the secondary mortgage market (or to investors). When the prime rate of interest is higher on short term loans than on mortgage loans, the mortgage firm has an economic loss which is offset by charging a warehouse fee.
- Wraparound Mortgage
- Results when an existing assumable loan is combined with a new loan, resulting in an interest rate somewhere between the old rate and the current market rate. The payments are made to a second lender or the previous homeowner, who then forwards the payments to the first lender after taking the additional amount off the top.
