Tuesday, January 02, 2007
Mortgage Definitions
Annual percentage rate(APR)
A yearly rate of interest that includes fees and other costs paid to acquire the loan.
Balloon
A mortgage that has level monthly payments that will fully amortize over a stated term (30 years) but which provides for a lump-sum payment to be due at the end of an earlier specified term. (10 years)
Buydown
Mortgage in which the rate is lowered by paying more points up front.
CAPS
The maximum amount that the rate can increase during a specified time period.
Loan-to-value ration (LTV)
Percent of a home's price that is paid for by a mortgage.
COFI
Adjustable rate mortgage with rate that adjusts based on a cost-of-funds index, often the 11th District Cost of Funds Indicator.
Lock
A lender's written guarantee that the mortgage rate quoted will be good for a specified period of time.
A yearly rate of interest that includes fees and other costs paid to acquire the loan.
Balloon
A mortgage that has level monthly payments that will fully amortize over a stated term (30 years) but which provides for a lump-sum payment to be due at the end of an earlier specified term. (10 years)
Buydown
Mortgage in which the rate is lowered by paying more points up front.
CAPS
The maximum amount that the rate can increase during a specified time period.
Loan-to-value ration (LTV)
Percent of a home's price that is paid for by a mortgage.
COFI
Adjustable rate mortgage with rate that adjusts based on a cost-of-funds index, often the 11th District Cost of Funds Indicator.
Lock
A lender's written guarantee that the mortgage rate quoted will be good for a specified period of time.
