Home Loan Glossary – U - Z

U

Underwriting

Underwriting a loan means assessing the risk of making the home loan and matching it to an appropriate term and interest rate. As part of this process, the borrower's credit profile and the quality of the property to be purchased are analyzed.

Unsecured Loan

An unsecured loan is one that is obtained by a borrower without having to pledge any collateral for the home loan.

V - Z

VA mortgage

A VA mortgage is a mortgage available only to eligible U.S. veterans that is guaranteed against default by the Department of Veterans' Affairs (VA). It is also known as a "government mortgage".

Variable Rate

Variable interest rates are rates that change periodically and are tied to an index rate. Home loan payments may increase or decrease as a result of these fluctuations, and in line with the terms of loan notes or agreements.

Vested

Vested means that an individual has an established right to the use of money for their own purposes. In the case of individual retirement funds, for example, people who are 100% vested can withdraw all the money allocated for their use. However, taxes and penalties may be charged, so vested funds should be borrowed or withdrawn only after researching the terms of their use.

What-if Analysis

A what-if analysis is an affordability analysis based on possible scenarios being considered by the borrower. It is a very useful tool, and can be used to explore the effects of increasing one's financial obligations, changing loan terms or down payment amounts or consolidating debt.

Year-end Statement

A year-end statement is a report sent to a borrower on a yearly basis showing the amount of principal, tax and interest that was paid during the year and the remaining home loan balance at the end of the year.