A short term interim loan for financing the cost of construction. The lender advances funds to the builder at periodic intervals as the work progresses.
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.
An index is a widely used published interest rate that lenders use to set the interest rate on loans. 10-year U.S. Treasury securities are often used for 30-year fixed-rate loans. ARM loans are commonly based upon the, one-, three-, and five-year U.S. Treasury security yields; the monthly average interest rate on loans closed by savings and loan institutions; or the monthly average costs-of-funds incurred by savings and loans. Lenders adjust the interest rate up or down on an adjustable rate mortgage by measuring the difference between a current index rate to the ARM interest rate, and adding a margin.
|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.