Mortgage Loans

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What number do I call if I have questions regarding my existing First (Trust Deed) Mortgage with First Entertainment ?
If you have questions, or would like additional information on your existing First Trust Deed with First Entertainment, please call 877.498.9409. Get answers to questions regarding new Mortgages, Seconds, and HELOCs by calling 888.800.3328.

Where do I mail my First (Trust Deed) Mortgage payments?
For First Trust Deeds only, please mail your payment to:

First Entertainment Credit Union
Post Office Box 7168
Pasadena CA 91109-7168

Can I pay off my Loan faster than the stated term?
Yes, and you’ll save on finance charges. You can pay off your loan faster either by making larger payments than the minimum required, or making more than 12 full payments a year.

Is there a pre-payment penalty?
We do not have pre-payment penalties on any of our mortgage products.

Is a credit union loan assumable?
No, the person buying your property cannot assume your loan.

Does the credit union require an impound account?
An impound account is required if: (1) you are financing more than eighty percent (80%) of the appraised value of the property or the sales price, whichever is less; or (2) the property is located in a flood zone and requires flood insurance. Also, an impound account may be required if you do not make timely payments for taxes, assessment, insurance premiums, or other items which affect the Credit Union’s security interest in the Property.

Is flood insurance required?
If the property is in an area designated as having special flood hazards and in which the sale of flood insurance is available, the insurance is required.

Is mortgage insurance required?
Only if you are financing more than 80% of the appraised value or the sales price of the property, whichever is less.

How long does it take to fund a credit union real estate loan?
Although processing time may vary, typically it takes 30 days to process your loan. However, the Credit Union can usually give you a pre-qualification for your loan within 48 hours.

Is there any charge if I cancel the loan after applying, but before any rescission period?
You may be charged for any third party costs incurred by the credit union. In most cases, third party costs would be the fees for appraisal and the credit report.

Are these all of the possible questions I could be asking regarding first trust deeds?
We are always available to answer more questions. Call us today at 888.800.3328.

This glossary covers select real-estate terminology and is not comprehensive or intended to define all essential and necessary aspects of real estate loans. But it’s a great start. Have more questions? Call our Real Estate lending department at 888.800.3328.

Adjustable Rate Mortgage (ARM)
Following an initial interest period, the interest rate is adjusted annually based on the movements of a selected index. The adjustments will usually result in an increase or decrease in the monthly payment. Adjustable Rate Mortgages are also known as Adjustable Mortgage Loans (AMLs) or Variable Rate Mortgages (VRMs).

Amortization
The means by which a home loan is scheduled to paid off, including principal and interest, by a series of regular installment payments. Loans are typically amortized over 30 years.

Annual Percentage Rate (APR)
The APR is a shopping tool that denotes the true cost of credit expressed as a yearly rate. It takes into account the interest rate as well as other charges, such as points, prepaid interest, etc.

Application Fee
A charge, often non-refundable, made by a lender to cover the cost of processing your application. The credit union does not charge an application fee.

Appraised Value
The estimated market value of the property as determined by a professional appraiser.

Assumability
If a loan is assumable, you are permitted to transfer your mortgage and its specified terms to the person(s) purchasing your home. The ability to assume fixed and variable rate loans varies from lender to lender. Real Estate loans at the credit union are not assumable.

Cap
A limit, expressed as a percentage, on the amount the interest rate on a Variable Rate loan can increase or decrease, either during each adjustment period (periodic cap) or during the life of the loan (overall cap). This term may also refer to the amount the payment can go up (payment cap) at each adjustment interval. However, payment caps do not limit the amount of interest the lender is earning and may cause negative amortization.

Deed of Trust
The legal instrument signed by the borrower to secure a real estate loan.

Demand
Written instructions by a beneficiary under a deed of trust stating and demanding the amount necessary for issuance of a reconveyance.

Disclosure
Information regarding the loan, which the lender is required by law to give to a borrower.

Down Payment
The cash portion of the purchase price that is paid from the buyers own funds.

Equity
The difference between the price at which the home could be sold and the amount of the balance due on the first mortgage (and any other liens on the property).

Escrow
A neutral third party appointed to act as custodian for all documents and funds until the buyer and seller meet all requirements.

First Trust Deed
The mortgage that has first priority over any other lienholder in the event of a default on the loan or foreclosure on the property.

Fixed Rate Loan
A loan where the interest rate in effect at the time the loan is made remains the same over the life of the loan.

Impound Account
An interest-earning savings account (held by the lender) for accumulating the portion of a borrower’s monthly payments designated for future payment of taxes, insurance, fees, assessments, etc. The lender then disburses funds from the impound account to make these payments.

Index
A measure of the general movement of interest rates which a lender uses to calculate how much the interest rate will change for that institution’s variable rate loans.

Indexed Rate
In a Variable Rate loan program, it’s the rate that takes effect after the initial discounted period expires. This rate is calculated by adding the current value of the index to the margin or spread.

Initial Rate
An interest rate for the first 6 or 12 months of a variable rate loan, that is usually lower than the fully indexed rate.

Legal Description
The description of the property as listed in the county records.

Margin or Spread
An amount, expressed as a percentage, which is added to the index to determine the interest rate on a variable rate loan.

Mortgage
A lien held by the lender against the borrower’s real property in return for funds borrowed to purchase the property

Negative Amortization
A situation that may occur when a variable rate loan has a “payment cap” feature. Since this limits how much your payment can increase during an adjustment, your adjusted payment may not be enough to cover the total amount of interest due. In this case, the unpaid interest would be added to your unpaid principal loan balance.

Negative “Vibe”
What you might give off to the Mortgage Lender if you come in on a day where you have a really bad attitude. Heck, the Mortgage Lender could even do that to you, but we don’t think that’s gonna’ happen – ’cause this is First Entertainment! By the way… we just threw this one in here to see if you were reading these terms.

Points
A point is a pre-paid finance charge equal to 1% of the principal amount of the loan, and is payable at the close of escrow. For example, two points charged on a $100,000 loan would equal $2,000.

Pre-Paid Interest
The interest that accrues on the mortgage from the date of settlement to the beginning of the period covered by the first periodic payment.

Pre-Paid Penalty
An additional fee charged to the borrower under some loan agreements (usually a fixed-rate loan) if the loan is paid off prior to the end of the loan term.

Principal
The amount of the loan, excluding interest.

Private Mortgage Insurance (PMI)
Insurance on a real estate loan to protect the lender from loss if the borrower defaults on the mortgage and the lender forecloses on the property.

Reconveyance
An instrument used to transfer title from a trustee to the equitable owner of real estate, when title is held as collateral security for debt. Most commonly used upon payment in full of a trust deed.

Refinance
Negotiation of a new loan in order to pay off an existing loan. Homes are usually refinanced to take advantage of lower interest rates, switch from one loan type to another (e.g. variable to fixed), or generate cash from equity. Since refinancing usually involves new loan costs, these costs must be weighed against the benefits to be gained.

Residential Mortgage Credit Report
Detailed account of credit, employment, residence, and public record from three national repositories.

Secondary Mortgage Market
The buying and selling of first or second mortgages on deeds of trusts by banks, insurance companies, government agencies, and other mortgagees (ie. Freddie Mac, Fannie Mae).

Settlement Costs
Also referred to as Closing Costs, these are costs incurred by the seller and the buyer in transferring title to the property from one to the other, or at refinance. They typically include such things as property tax, insurance, broker’s fees, escrow fees, title insurance premium, deed recording fee, etc. Escrow instructions will stipulate which portion of the fees are to be paid by buyer or seller.

Sub-Escrow Fee
Processing fee charged by a title company to calculate the amount needed to pay off an existing real estate loan. The title company would then issue a check to the lender to pay off that loan.

Tax Service
Outside service that tracks member’s property taxes in order to verify that the taxes are being paid.

Term
The number of years before your loan is scheduled to be paid off (15 or 30 year terms are most common).

Title Insurance
An insurance policy protecting the individuals claiming an interest in the property (such as the borrower and lender) against loss resulting from any encumbrances not identified by the Title Company in their Preliminary Title Report.

Housing Counselors can provide professional advice on an array of subjects, including buying a home, renting, defaults, foreclosures, and credit issues. Should you choose to use a housing counselor, it’s essential to find a counselor approved by the U.S. Department of Housing and Urban Development (HUD) and can offer independent advice about whether a particular set of mortgage loan terms is a good fit based on your objectives and circumstances, often at little or no cost to you.

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