Mortgage Terms - D

DEED: It is a written document by which the property gets transferred from one person to another person. It is also used as an evidence of property ownership.

DEBIT CARD: It is a card issued by the bank which allows your money to be directly withdrawn from your current account or savings account.

DEED IN LIEU: It is a process where the borrower failing to repay the loan gives the lender ownership of his property. It helps him to avoid foreclosure.

DEFAULT MORTGAGE: When a borrower fails to repay the loan as stated in the note within a specified time period, it is called a default mortgage.

DEPRECIATION: It is a reduction in the original value of the property due to natural causes like wear and tear or its age.

DELINQUENCY: When a borrower fails to make the monthly loan payments within the due date, the loan becomes delinquent and the former is then said to be in delinquency.

DOWN PAYMENT: It is the initial cash amount paid by a home buyer for the purchase of a property.

DIVORCEE MORTGAGE: It is a special type of loan intended for a divorcee or for a person who is separated. It helps the person receive money from his/her ex-spouse for the maintenance costs.

DISCOUNT POINT: It is a fee paid by the borrower to the lender so that the latter reduces the interest rate on the loan. It is paid at the closing time when all the relevant loan documents are signed. Usually one discount point is equal to one percent of the loan amount.

DROP LOCK MORTGAGE: It is a loan that combines both a discount and a fixed rate. The borrower starts off with a discount rate for a fixed period of time. But he can switch to a fixed rate at any time when the rate rises. For that, he need not pay any charges.

DEBT-TO-INCOME RATIO: It is a ratio expressed as a percentage of the monthly income of a borrower which is used to meet his debt obligations. It is evaluated by dividing the borrower's outstanding debt with his gross monthly income.

DUE-ON-SALE CLAUSE: It is a clause in a loan agreement by which a lender can ask the borrower to repay the outstanding balance if the latter sells or transfers his property.

DRAW PERIOD: It is a time period during which the borrower can access funds from his home equity line of credit up to a limit as fixed by his lender, to make a minimum payment on his loan. Once this period is over, he may be able to renew his credit line and repay the outstanding dues.