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Definition
| any mortgage loan that requires periodic principal and interest payments that retires the debt gradually during the loan term |
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Definition
| any mortgage loan in which the last payment, known as the balloon payment, is larger than the preceding payments |
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| Straight term mortgage loan |
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Definition
any mortgage loan in which the periodic payments are to interest only with the entire loan amount due upon maturity. The last payment is a balloon payment that includes the entire loan amount and the itnerest for the last period.
90 day note or Bridge loan would fall under this catagory |
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| Partially amortized mortgage loan |
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Definition
any mortgage loan which matures prior to the repayment of the loan through amortized payments. The last payment is a blloon payment and pays the remaining loan balance and the interest for the last period.
Typical in seller financing, calculated in 30 yrs, but balance due at five years |
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Definition
| a mortgage loan that carries a constant interest rate over the full life of the loan. typically a higer interest rate compared to an adjustable rate loan |
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| Adjustable rate mortgage loan |
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Definition
ARM
A mortgage which is characterized by an interest rate that can move up or down based on the movement of a specific index |
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Definition
| a mortgage loan in which the borrower can borrow back to a maximum amount at any time. (home equity loan typifies this) |
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Definition
| a mortgage loan that can be prepaid at any time without penalty |
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Definition
| a mortgage loan which is repaid with payments to the principal and interest as well as 1/12 of the annual property taxes and 1/12 of the annual insurance premium. The tax and insurance protions of each payment is set aside in an escrow account and accumulate to pay next year's bill |
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Definition
Growing Equity Mortgage
a loan in which the periodic payments increase each year, with the increased amount going to reduce the principal amount of the loan, thus reducing the loan term |
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Definition
Graduated payment mortgage
any mortgage loan in which the monthly payments begin at a lesser amount than normal and increase by a certain percentage each year for a specified number of years.
In the beginning if the payment is less than the interest due, the shortage is added to the principal balance
This is known as engative amortization. Best used only if the borrower knows they will have a income increase which will cover higher future payments |
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Reverse Annuity Mortgage
A mortgage loan in which the lender pays the borrower a periodic payment based on a percentage of the property's value and the amount of the owner's equity. Have to be 62+ |
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Definition
| a mortgage loan to purchase the property that is used as collateral and usually funded by the lesser. <-- Seller transfers title |
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Definition
| a short term mortgage loan which is paid in increments by the lender as the improvement is constructed. Only pay interest on what has been drawn. This loan can be rolled into another type of mortgage. |
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Definition
| a mortgage loan that uses both real and personal property as collateral. Usually used in commercial situations and includes equimpent. Or in residential when selling a fully furnished condo. |
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Definition
| A mortgage loan that uses two or more properties as collateral |
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Definition
| a conventional mortgage loan is any mortgage loan which is not insured by the FHA or guaranteed by the VA |
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Term
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Definition
Federal Housing Administration insures a portion of the loan to the lender in case the borrower defaults and the lender suffers a deficiency.
They do not insure mortgage loans for non-occupant owners, they can finance up to a four family dwelling if the owner occupies.
The loan is assumable, the buyer may have to meet FHA qualifications
The property has to meet minimum property standards. |
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Term
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Definition
Veteran's Administration guranteed financing.
The loan is made by a local lender not the VA
They guarantee a portion of the loan to the lender. It does not charge a mortgage insurance premium, however the borrower pays a funding fee to the VA
May be assumable
Has to have a certificate of reasonable value to meet minimum property standards.
The VA requires no Downpayment of the veteran. |
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Term
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Definition
Farmers Home Administration Financing guarantees a protion of a mortage loan made by a lender OR makes the loan itself.
Can be used to purchase farms or homes in rural areas. |
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