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.
|Deed of Trust|
An instrument used in many states in place of a mortgage. The property is transferred to a trustee by the borrower (trustor), in favor of the lender (beneficiary) and re-conveyed upon payment in full.
|Graduated Payment Mortgage (GPM)|
A type of flexible-payment mortgage where the payments increase for a specified period of time and then level off. This type of mortgage has negative amortization built into it.
Points are also called discount points, mortgage points, loan discount points, loan origination fees, or maximum loan charges. Points are prepaid interest assessed at closing by the lender and or the broker. A point is equal to 1 percent of the loan amount. Lenders consider mortgage points as interest that you pay in advance. As a result, the more points you pay when you close the loan, the lower your interest rate. The IRS considers points to be a form of prepaid interest. Discount fees are totally tax deductible for the year the loan is closed for tax purposes, while origination points are tax deductible over two years (half for the year the loan is closed, and half in the year following).