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Closing costs
Closing costs are the total expenses that the buyer pays at the time a real estate transaction is completed. closing costs generally range between 3 and 6 percent of the home purchase price. With conventional loans, the following closing costs cannot be paid by the Seller for the Buyer: Pre-paid interest, Hazard insurance impounds, or Property tax impounds. |
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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. |
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Graduated Payment Mortgage (GPM)
A type of flexible-payment mortgage where the payments increase for a specified period of time and then level off. This type of mortgage has negative amortization built into it. |
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Shared Appreciation Mortgage (SAM)
A mortgage in which a borrower receives a below-market interest rate in return for which the lender (or another investor such as a family member or other partner) receives a portion of the future appreciation in the value of the property. May also apply to mortgage where the borrowers shares the monthly principal and interest payments with another party in exchange for part of the appreciation. |
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