Learning Center Glossary
An escrow account maintained by a lender for paying property taxes and insurance premiums for the security property; the lender requires the borrower to make regular deposits, and pays the expenses out of the account when they come due. Also called a reserve account.
Property that generates rent or other income for the owner, such as an apartment building.
A published statistical report that indicates changes in the cost of money (market interest rates), used as the basis for interest rate adjustments in an adjustable-rate mortgage (ARM).
A debt that is regularly reported for a specific amount and for a specific term, such as a car loan or student loan.
A periodic charge a lender requires a borrower to pay in exchange for the loan, usually expressed as a percentage of the principal.
|Interest Rate Cap||
A provision in an adjustable-rate mortgage (ARM) that limits the amount that the interest rate may be increased (and in some cases, decreased).
A loan that calls for payments of only the interest due during the loan term, so that the entire principal amount is due in one lump sum at the end of the term.
A construction loan made during completion of a building or a project. A permanent loan usually replaces this loan after completion.
|Investment/ Rental Property||
Property that is not owner-occupied which is rented, leased or used for other investment purposes.