|Adjustable Rate Mortgage (ARM)|
A mortgage whose interest rate changes over time based on an index and a margin. Rate changes are made at prescribed times and within prescribed limits (caps) as defined in the mortgage contract.
|Convertible ARM |
An adjustable-rate mortgage that can be converted to a fixed-rate mortgage under specified conditions.
|Line of Credit|
A loan with a maximum credit limit that allows the borrower(s) to disburse funds up to the maximum credit line as needed. Funds may be disbursed repeatedly as the principal balance is paid down up to the maximum credit limit available. A line of credit functions similar to a credit card and may be accessed by writing a check or a using a debit card.
The process of paying off one loan with the proceeds from a new loan secured by the same property. The main reasons for refinancing is to better the borrower with a lower interest rates, loan term reduction, switch to or from a fixed or ARM loan, receive cash out, debt consolidation, or to eliminate a balloon payment.