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Appraised Value
The fair market value an appraiser assigns to a particular property, based on analysis of the property in question, and the market conditions in the area, and recent sales data of comparable homes in the area. |
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Debt Consolidation Loan
A type of loan that allows the borrower to payoff all or a portion of existing debt (including the existing mortgage loan) from loan proceeds. |
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Index rate
An index is a widely used published interest rate that lenders use to set the interest rate on loans. 10-year U.S. Treasury securities are often used for 30-year fixed-rate loans. ARM loans are commonly based upon the, one-, three-, and five-year U.S. Treasury security yields; the monthly average interest rate on loans closed by savings and loan institutions; or the monthly average costs-of-funds incurred by savings and loans. Lenders adjust the interest rate up or down on an adjustable rate mortgage by measuring the difference between a current index rate to the ARM interest rate, and adding a margin. |
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Wraparound Mortgage
Results when an existing assumable loan is combined with a new loan, resulting in an interest rate somewhere between the old rate and the current market rate. The payments are made to a second lender or the previous homeowner, who then forwards the payments to the first lender after taking the additional amount off the top. |
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