A-D / E-H / I-P / Q-Z
Adjustable Rate Mortgage. Mortgage characterized by an interest rate that is fixed
for an amont of time then can adjust up or down at certain intervals based on a
current index (commonly the 1 year T-Bill) plus a preset margin.
Mortgage characterized by level fixed payments for a predetermined time frame followed
by either a refinance or adjustment in interest rate.
The amount needed from the borrower at closing. Consists of down payment, closing costs and
prepaid items. This amount needs to be in the form of a cashier check made payable to the buyer.
Various costs of setting up and funding the transaction - including closing fee, title insurance,
appraisal fees, underwriting fee, mortgage registration tax etc.
Ratio of debt to pretax income, Ex- $5500 monthly income, $1400 housing payment, $1000 total
debt would equal ratios of 43.6%.
One point equals one percent of the loan amount. Points are used to lower the interest rate.
One point does not equate into lowering the interest rate one percent. Generally lowering
the interest rate 1/8 will cost about 1/2 point, although this can vary based on daily pricing.
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