Commercial Glossary: D

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Debt Consolidation: Consolidation of multiple debts into one debt.

Debt Instrument: Also referred to as an income or cash flow stream. A debt instrument is the obligation of one to make payments to another or a debt that one has to another.

Debtor: One who incurred a debt and makes payments on that debt.

Debt Service: The payments of principle and interest that are paid on a loan periodically.

Debt Service Coverage: They money required to make a payment for current principle plus interest.

Debt Service Coverage Ratio: This is a measurement of a mortgaged properties ability to cover monthly payments. It is expressed as the ration of net income from the property over the amount of the debt payment.

Debt-to-Income Ratio: Ration of ones income to debt expressed as a percent of monthly debt obligations compared to monthly income. Used as a qualification for credit.

Deed: A legal document that conveys title of a property.

Default: Failure to meet contractual agreements and conditions.

Defeasance: A defeasance clause gives the borrower the option to prepay a commercial mortgage by purchasing US Treasuries that will go into an escrow account to pay off future debt payments and obligations.

Delinquency: Failure to make payments on their due dates will make the loan or account delinquent.

Demand Feature: A mortgage provision that permits the lender to demand repayment in full if the loan or mortgage defaults.

Demographics: Information about a particular population, area or business.

Density: A measurement of the number of people or buildings in a defined or designated area.

Deposit: Money given and put down with a credit application showing the intention of the applicants.

Deprecation: The decrease in value of property from the original purchase price or value of the property. The opposite of “appreciate”.

Depreciation (Accounting): An accounting practice of allocating an assets cost over its estimated useful life.

Depreciation (Appraisal): ??

Developer: A Developer develops raw land so it is ready to build on and will then parcel out the land and sell it to builders.

Disclosure: A disclosure document explains all terms and conditions of a mortgage or loan.

Discount Points: One-time fees that are paid to a lender at closing for lowering the interest rate of a mortgage.

Discount Rate: The interest rate for loans issued by the federal reserve to other banks.

Distribution Warehouse: Light industrial use commercial property that can be used for some office-use in relation to distribution and warehouse operations.

Dock High: The number of dock level doors or bays available and present.

Documentation Fee: This is a fee charged to the borrower to cover any filing and documentation fees.

Documentation Specialist: This is someone who coordinates the paperwork and documents of a loan and arranges funding.

Down Payment: Money paid towards the purchase of a property that is cash and not funded by financing.

Due Diligence: Thorough research and examination performed on a credit transaction, lender, borrower, client or income stream. It includes but is not limited to credit checks, appraisals, lien searches and UCC searches. Legally due diligence is described as a measure of prudence by a reasonable person under particular circumstances.

Due-on-Sale Clause: Clause that gives the lender the right to demand repayment in full if the borrower sells the property.

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