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Do You
Know ? |
Loan
is an arrangement in which a lender gives money
or property to a borrower, and the borrower
agrees to return the property or repay the
money, usually along with interest, at some
future time.
What is a payday
loan?
A payday loan has many names. Some call it a
cash advance loan. Some call it a check advance
loan. Another name is a post-dated check loan.
Still others call it a deferred-deposit check
loan.
Acceleration
The right of the mortgagee (lender) to demand
the immediate repayment of the mortgage loan
balance upon the default of the mortgagor
(borrower) Adjustable
rate mortgage
Is a mortgage in which the interest rate is
adjusted periodically based on a pre-selected
index. |
Adjustment interval
On an adjustable rate
mortgage, the time between changes in the
interest rate and/or monthly payment,
typically one, three or five years,
depending on the index.
Amortization
Means loan payment by
equal periodic payment calculated to pay off
the debt at the end of a fixed period,
including accrued interest on the
outstanding balance. Annual
percentage rate.
Is a interest rate
reflecting the cost of a mortgage as a
yearly rate. This rate is likely to be
higher than the stated note rate or
advertised rate on the mortgage, because it
takes into account point and other credit
cost. the APR allows home buyers to compare
different types of mortgages based on the
annual cost for each loan.
Appraisal
An estimate of the
value of property, made by a qualified
professional called an "appraiser".
Assessment A local tax levied
against a property for a specific purpose,
such as a sewer or street lights.
Assumption
The agreement between
buyer and seller where the buyer takes over
the payments on an existing mortgage from
the seller. Assuming a loan can usually save
the buyer money since this is an existing
mortgage debt, unlike a new mortgage where
closing cost and new, probably higher,
market-rate interest charges will apply.
Balloon (payment) mortgage
Usually a short-term
fixed-rate loan which involves small
payments for a certain period of time and
one large payment for the remaining amount
of the principal at a time specified in the
contract. Blanket Mortgage
A mortgage covering at
least two pieces of real estate as security
for the same mortgage. Borrower
(Mortgagor)
One who applies for
and receives a loan in the form of a
mortgage with the intention of repaying the
loan in full Broker
An individual in the business of assisting
in arranging funding or negotiating
contracts for a client buy who does not loan
the money himself. Brokers us ally charge a
fee or receive a commission for their
services. Buy-down
When the lender and/or
the home builder subsidized the mortgage by
lowering the interest rate during the first
few years of the loan. While the payments
are initially low, they will increase when
the subsidy expires. Cash Flow
The amount of cash
derived over a certain period of time from
an income-producing property. The cash flow
should be large enough to pay the expenses
of the income producing property (mortgage
payment, maintenance, utilities, etc.)
Caps (interest)
Consumer safeguards
which limit the amount the interest rate on
an adjustable rate mortgage may change per
year and/or the life of the loan. |
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