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Buy-Down
When the lender and/or the home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires. These are sometimes used to qualify borrowers for a loan amount that they would not otherwise qualify for but will be able to pay in subsequent years as their income increases. |
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First Mortgage
A real estate loan with a lien (i.e., mortgage or deed of trust) on the subject property that has priority over any subsequently lien or financial encumbrances. |
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Monthly Housing Payment
Typically the total amount of principal, interest, taxes, and insurance (PITI) paid each month on a mortgage loan. Many lenders and investors limit the monthly housing payment to 28% of the gross monthly income. |
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Purchase Money Mortgage
A mortgage given by the purchaser to secure a loan for part or all of the purchase price. Such a mortgage becomes a lien on the property simultaneously with the passing of title, and if immediately recorded becomes prior to any lien against the purchaser. |
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