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.
|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.
|Monthly Housing Payment|
Typically the total amount of principal, interest, taxes, and insurance (PITI) paid each month on a mortgage loan. Many lenders and investors limit the monthly housing payment to 28% of the gross monthly income.
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.