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.
|Debt ratio or Debt-to-Income Ratio|
The ratio, expressed as a percentage, is calculated by dividing the monthly payment of long-term debts by gross monthly income.
|Home Equity Line of Credit (HELOC)|
A revolving line of credit secured on the equity in the mortgagor's house, usable for any purpose.
An examination performed by a title company of the public records, including court decisions, to disclose facts concerning the ownership of real estate. The title examiner prepares an Abstract and the title agent prepares a Binder but decisions regarding the legal sufficiency of title or questions requiring legal interpretation must be resolved by a licensed attorney at law.