![]() ![]() The result for the borrower is a substantial savings in interest. The 26 (or possibly 27) biweekly payments are each equal to one-half of the monthly payment that would be required if the loan were a standard 30-year fixed-rate mortgage, and they are usually drafted from the borrower's bank account. For example, a fee calculated as 50 basis points of a loan amount of $100,000 would be 0.50% or $500.Ī preliminary agreement, secured by the payment of an earnest money deposit, under which a buyer offers to purchase real estate.Ī mortgage that requires payments to reduce the debt every two weeks (instead of the standard monthly payment schedule). ![]() The final lump sum payment that is made at the maturity date of a balloon mortgage.Ī basis point is 1/100th of a percentage point. The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of an existing mortgage.Ī financial statement that shows assets, liabilities, and net worth as of a specific date.Ī mortgage that has level monthly payments that will amortize it over a stated term but that provides for a lump sum payment to be due at the end of an earlier specified term. The loan does not need to be paid in full by the original borrower upon sale or transfer of the property. The transfer of the seller's existing mortgage to the buyer.Ī provision in an assumable mortgage that allows a buyer to assume responsibility for the mortgage from the seller. The transfer of a mortgage from one person to another.Ī mortgage that can be taken over ("assumed") by the buyer when a home is sold. Assets include real property, personal property, and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on). The opposite of depreciation.Īnything of monetary value that is owned by a person. The cost of a mortgage stated as a yearly rate includes such items as interest, mortgage insurance, and loan origination fee (points).Īn increase in the value of a property due to changes in market conditions or other causes. For example, for a 30-year fixed-rate mortgage, the amortization term is 360 months. The amortization term is expressed as a number of months. The amount of time required to amortize the mortgage loan. The repayment of a mortgage loan by installments with regular payments to cover the principal and interest. The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM). The date on which the interest rate changes for an adjustable-rate mortgage (ARM). A B C D E F G H I J K L M N O P Q R S T U V W X Y ZĪ mortgage whose interest rate changes periodically based on the changes in a specified index.
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