38862978
Description
Flashcards by JOHNA THARP, updated 10 months ago
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Created by JOHNA THARP
10 months ago
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| Question | Answer |
| Adjustable rate mortgage (ARM) | Rate of mortgage is lower than a fixed rate mortgage. Rates adjusted without refinancing. Caps available to limit how high rate can go for each adjustment period over term of loan. |
| Amortization schedule | Shows monthly payment to pay back loan at maturity. Payment also includes interest. Note payment is fixed at same amount each month. |
| Amortization table | A table that shows each periodic payment on a loan or mortgage. |
| Biweekly mortgage | Mortgage payments made every 2 weeks rather than monthly. This payment method takes years off the life of the mortgage and substantially reduces the cost of interest. |
| Cash-out refinance | Borrowing more than the current mortgage and taking the difference out in cash. |
| Closing costs | Costs incurred when property passes from seller to buyer such as for credit reports, recording costs, points, and so on. |
| Escrow account | Lending institution requires that each month of the insurance cost and real estate taxes be kept in a special account. |
| Fixed-rate mortgage | Monthly payment fixed over number of years, usually 30 years. |
| Foreclosure | A legal process used by lender to recover balance of the loan from the borrower who has stopped making payments on the loan. |
| Graduated-payment mortgage (GPM) | Borrower pays less at beginning of mortgage. As years go on, the payments increase. |
| Home equity line of credit | A revolving line of credit secured by your home equity. |
| Home equity loan | A loan using the borrower’s home equity as collateral. |
| Interest-only mortgage | ype of mortgage where in early years only interest payment is required. |
| Monthly payment | Amount paid each period to pay off part of the mortgage. |
| Mortgage | Cost of home less down payment. |
| Points | Percentage(s) of mortgage that represents an additional cost of borrowing. It is a one-time payment made at closing. |
| Reverse mortgage | Federal Housing Administration makes it possible for older homeowners to live in their homes and get cash or monthly income. |
| Short sale | If property values decrease, homeowners may have to sell their properties for less than is owed. |
| Subprime loan | A loan with a rate higher than prime due to uncertainty of payment. |
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