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Annual Percentage Rate (A.P.R.)
The actual cost of a mortgage loan expressed as a yearly rate. The APR will be higher than the interest rate stated on the application and note because it includes fees such as: interest, discount points, origination fee, mortgage insurance and other related fees. The truth in lending act requires lenders to disclose an APR to assist the borrower in measuring the actual cost of a loan. |
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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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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. |
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V.A. Mortgage Funding Fee
A premium assed to the VA borrower in lieu of mortgage insurance. First time VA borrowers have a 3% funding fee included in their loan. When the VA borrower sells their home and uses their VA rights on a new home, the funding fee is 2%. VA borrowers refinancing their home, have a half percent funding fee in their mortgage. Disabled Veterans are not burdened with the funding fee. |
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