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Cap
A consumer safeguard limiting adjustments to ARM interest rate or mortgage payment's. |
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Deferred Interest
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. |
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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). |
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Refinancing
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. |
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