|Average Interest Rate|
The actual average interest rate for a combination of debts based upon a total weighted interest rate calculation. Utilizing each loan balance and interest rate, the calculator determines an average interest rate for multiple debts.
When a mortgage is written with a monthly payment that is less than required to satisfy the note rate, the unpaid interest is deferred by adding it to the loan balance.
|Good Faith Estimate|
A document delivered with Truth-In-Lending Disclosure Statement to borrower as an estimate comprising, closing costs, interest rate, term, loan amount, and monthly payment, within 3 days of receiving borrowers mortgage application per the Real Estate Settlement Procedures Act (RESPA).
Underwriting involves an analysis of the borrower's creditworthiness (debts and assets, employment history, property evaluation, and other factors to determine an appropriate rate, term & loan amount.