Flashcards
Chapter 15
Cards in this deck (17)
- 1Adjustable 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.
- 2Amortization ScheduleShows monthly payment to pay back loan at maturity. Payment also includes interest. Note payment is fixed at same amount each month.
- 3Amortization TableA table that shows each periodic payment on a loan or mortgage.
- 4Biweekly MortgageMortgage payments made every 2 weeks rather than monthly. This payment method takes years off of the life of the mortgage and substantially reduces the cost of interest.
- 5Closing CostsCosts incurred when property passes from seller to buyer such as for credit reports, recording costs, points, and so on.
- 6Escrow AccountLending institution requires that each month 1/12 of the insurance cost and real estate taxes be kept in a special account.
- 7Fixed Rate MortgageMonthly payment fixed over number of years, usually 30 years.
- 8ForeclosureA legal process used by lender to recover balance of the loan from the borrow who has stopped making payments on the loan.
- 9Graduated-Payment Mortgages (GPM)Borrower pays less at beginning of mortgage. As years go on, the payments increase.
- 10Home Equity LoanCheap and readily accessible lines of credit backed by equity in your home; tax-deductible; rates can be locked in.
- 11Interest-Only MortgageType of mortgage where in early years only interest payment is required.
- 12Monthly PaymentAmount paid each period to pay off part of the mortgage.
- 13MortgagesCost of home less down payment.
- 14PointsPercentage(s) of mortgage that represents an additional cost of borrowing. It is a one-time payment made at closing.
- 15Reverse MortgageFederal Housing Administration makes it possible for older homeowners to live in their homes and get cash or monthly income.
- 16Short SaleA real estate sale when amount received is less than balance of the debt.
- 17Subprime LoansA loan with a rate higher than prime due to uncertainty of payment.
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- Adjustable Rate Mortgage, Amortization Schedule
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- SAM HARRIS
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