Our Visio Processing Team works diligently to process your loans and prepare them for underwriting. We recently surveyed them for key mortgage terminology they use daily that would be helpful for borrowers to know. Here are five essential terms to keep in mind when working with a Visio processor:
- Replacement Cost- (also known as replacement value) the cost that is determined by the insurance carrier as what it would cost to rebuild the property from the ground up, without factoring in depreciation.
- Actual Cash Value- the replacement cost minus depreciation. Please note, that Visio only takes Replacement Cost coverage and not Actual Cash Value policies.
- Functional Replacement Cost- a property insurance provision changing the valuation basis (either Actual Cash Value or Replacement Cost) to a valuation at the cost to replace the damaged or destroyed property with a property that serves the same function. Visio does not accept Functional Replacement Cost provisions.
- Estoppel Letter- a document provided by the Homeowner’s or Condominium Owner’s Association outlining the current owner’s past due balances, current fees due, and lists of all future special assessments due. Additionally, it should include an outline of how frequently dues are to be paid and on what date they become late.
- Owner’s Title Policy- a type of title policy that protects the buyer from any possible title defects. Learn more about Owner’s Title Policy and why it is essential for real estate investors to have them.
Are you a mortgage industry and terminology expert? Test your knowledge with our Quizzes. Want more helpful tools for borrowers? Visit our Resources Page.
