39867271
Description
Flashcards by BRANDI MCCAMMON, updated 3 months ago
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Created by BRANDI MCCAMMON
3 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 1/12 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 mortgages (GPM) | Borrower pays less at beginning of mortgage. As years go on, the payments increase |
| Home equity line of credit | A revolving lone of credit secured by your home equity |
| Home equity loan | A loan using the borrower's home equity as collateral |
| Interest-only mortgage | Type 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 ger cash or monthly income |
| Short sale | A real estate sale when amount received is less than balance of the debt |
| Subprime loan | A loan with a rate higher than prime due to uncertainty of payment |
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