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Glossary - U

Mortgage Brokers Glossary - U

Umbrella Mortgage:

A specific arrangement where one document encompasses one or more already existing mortgages registered on the same property. The mortgagee is responsible for remission of payment(s), to lender(s), while the mortgagor makes one payment to the mortgagee. Also referred to as a wraparound.

Underpayment Penalty:

A penalty for not paying enough total estimated tax and withholding. To avoid underpayment penalties, you can pay a percentage of last year's tax due or of the current year's expected tax due. The taxes may be paid in the form of combined estimated and withholding tax payments.

Undertaking:

This is a promise by a Lawyer to ensure that certain conditions (usually of the lender) are met (usually after closing, due to time constraints). The best example is the undertaking to register a discharge of an old first mortgage after the new one has been registered, because there is simply not enough time to do so at closing. It also governs such closing dynamics as releasing funds before a new mortgage document is officially registered.

Underwriting:

The process of deciding whether or not to lend you money (or how much to lend you) based on all the information you have given the lender. Every lender has a different underwriting process and lending criteria which differ to some (usually small) extent from other lenders.

Unearned Income:

This type of income can include funds that are gained from interest, dividends, investments, or capital gains as opposed to income that is earned by working for a salary, hourly wage, or gratuity.

Unsecured Claim:

A claim or debt where the creditor has no guarantee of repayment because collateral is not required from the borrower. Credit is granted solely on an assessment of the debtor's future ability to repay the claim or debt.

Unsecured Debt:

Debt that is not guaranteed by collateral is considered unsecure because there is no assurance for repayment. Most credit cards are unsecured debt, which is why the interest rates are higher than other forms of lending, such as mortgages, which use property as collateral.

Unsecured Loan:

A type of loan that is given to a borrower without collateral such as property that is acceptable as security for the loan.

Up-front Costs:

Certain costs must be paid when signing a vehicle lease agreement before the dealership will release the vehicle to the buyer. These costs might include the first payment, a refundable security deposit, a down payment, taxes, registration, and other fees.

Upgrades:

When buying a newly built property such as a house or condominium, the builder gives the buyer the option to select higher-quality floor coverings, cabinets, windows, fixtures, etc. at an additional cost to the buyer. If the buyer decides not to purchase upgrades, he or she can simply select the standard options offered by the builder.

Usurious Rate:

An interest rate that is unnecessarily high or well above legal rates. For example, sometimes intangible property taxes are applied to income from usurious rates.

Usury:

The act or practice of lending money and charging the borrower interest at an exorbitant or illegally excessive rate.