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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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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. |
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Foreclosure
A termination of the rights of the mortgagor in the property covered by the mortgage; a court process instituted by a mortgagee or lien creditor to defeat any interest or equity of redemption which the mortgagor or debtor-owner may have in the property. |
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Reverse Annuity Mortgage (RAM)
A form of mortgage in which the lender makes periodic payments to the borrower using the borrower's equity in the home as Satisfaction of Mortgage: The document issued by the mortgagee when the mortgage loan is paid in full. Also called a release of mortgage. |
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