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Average Interest Rate
The actual average interest rate for a combination of debts based upon a total weighted interest rate calculation. Utilizing each loan balance and interest rate, the calculator determines an average interest rate for multiple debts. |
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Down Payment
Money deposited towards the purchase of a home paid to make up the difference between the purchase price and the mortgage amount not finance with a mortgage. The larger the down payment, the less you need to borrow. Most lenders require the down payment to be paid from the buyer's own funds. Gifts from related parties are sometimes acceptable, and must be disclosed to the lender. However, FHA allows gifts from any source. |
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Fixed-Rated Mortgage
A mortgage on which the interest rate is set for the term of the loan. |
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Wraparound Mortgage
Results when an existing assumable loan is combined with a new loan, resulting in an interest rate somewhere between the old rate and the current market rate. The payments are made to a second lender or the previous homeowner, who then forwards the payments to the first lender after taking the additional amount off the top. |
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