A AAA-Tenant, also referred to as a Triple-A Tenant, is a highly creditworthy and dependable tenant that typically includes large, established corporations or government entities. These tenants are deemed exceptionally low risk for defaulting on lease payments, making them highly desirable for property owners and investors.
The back-end ratio is one of several criteria used to qualify homebuyers or owners for mortgage loans. It takes into account existing long-term debt of the loan applicant, contrasting with the front-end ratio.
A co-borrower is an additional person who signs a mortgage loan agreement, sharing responsibility for loan repayment and contributing to the household income used to qualify for the loan.
Compensating factors are criteria used to enhance a borrower’s creditworthiness by considering elements beyond the standard qualifying ratios. These factors help lenders make informed decisions when traditional metrics don't tell the whole story.
A Consumer Reporting Agency (CRA), also known as a Credit Rating Service, collects, maintains, and provides consumer credit information to third parties to assist in evaluating creditworthiness.
Credit (Mortgage) Scoring entails evaluating and rating a loan applicant based on their creditworthiness, impacting eligibility for standard or sub-prime mortgage terms.
Credit history refers to an individual's past behavior involving the taking out and repayment of loans and the use of revolving credit, such as credit cards. Credit histories are recorded by national credit reporting companies who issue credit reports. These reports are used by lenders to assess an applicant’s creditworthiness.
A credit limit represents the maximum amount a financial institution extends as a loan or line of credit to an individual or business based on their creditworthiness and financial background.
A Credit Rating (Report) is an evaluation of an individual's or business's capacity and history of debt repayment. It provides creditors with an understanding of a borrower's reliability, aiding in the decision-making process for loans and credit.
A Credit Rating Service or Credit Bureau is an organization that provides information regarding the creditworthiness of a prospective borrower. These agencies, also called consumer reporting agencies (CRAs), are essential for lenders to assess the risk of lending to individuals and businesses.
A credit score is a numerical expression that represents the creditworthiness of an individual, predicting the likelihood that the individual will default on a loan based on their credit history.
Creditworthiness is a measure assessing a person's ability to qualify for and repay a loan. It influences loan approvals, interest rates, and credit limits.
A debenture is a type of debt instrument that is not secured by physical assets or collateral. It relies on the creditworthiness and reputation of the issuer for backing.
Debt Yield is the Net Operating Income (NOI) divided by the amount of debt, primarily used by lenders to determine the sufficiency of a property's income to cover its debt service.
The Debt-to-Income Ratio (DTI) measures a borrower’s ability to manage monthly payments and repay debts. This ratio compares an individual's gross income to their combined housing and nonhousing expenses.
A process whereby a specific mortgage lender certifies that a prospective borrower is financially qualified and creditworthy for a specific type of loan with specified terms for an amount up to a specified maximum. Actual advancement of the loan will depend on the suitability and value of the collateral property, which is unspecified at the time of pre-approval. Contrast PREQUALIFY.
A national tenant is a lessee with a presence across many or most of the United States. These entities are typically well-known and have better credit compared to local tenants, making them desirable for commercial property owners and lenders.
Origination, specifically loan origination, refers to the process in which a borrower applies for a new loan and a lender processes that application. This includes various steps such as evaluating the borrower's creditworthiness, completing the application, underwriting, and funding the loan.
Strategic default is the intentional cessation of payments on a debt despite having the financial means to fulfill the obligation, typically done for perceived financial benefits.
An unsecured loan is a debt not protected by any collateral or security, meaning the lender relies solely on the borrower's creditworthiness and promise to repay.
