125% Loan
Definition of "125% Loan"
A mortgage loan for 125% of property value. Since such loans are only partly secured, they have many of the characteristics of unsecured loans, including relatively high interest rates. Rates are largely determined by the borrower's credit score, however, and can be quite reasonable when the score is high. A drawback is that borrowers have difficulty refinancing 125% loans and can't sell their house without defaulting unless they can come up with the additional cash required to pay off the 125% loan.
Popular Mortgage Terms
The interest rate that is fixed for some specified number of months or years at the beginning of the life of an ARM. ...
Same as term Lead Generation Site: A mortgage Web site designed to provide leads to lenders. A 'lead' is a packet of information about a consumer in the market for a loan. Lenders pay ...
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The frequency of rate adjustments on an ARM after the initial rate period is over. The rate adjustment period is sometimes but not always the same as the initial rate period. As an example, ...
A mortgage on which the borrower gives up a share in future price appreciation in exchange for a lower interest rate and/or interest deferral. SAM's in the private market had a brief ...
A rate lock, plus an option to reduce the rate if market interest rates decline during the lock period. ...
A letter from a lender verifying that the price and other terms of a loan have been locked. Borrowers who lock through a mortgage broker should always demand to see the lock commitment ...
Same as term Qualification: The process of determining whether a prospective borrower has the ability to repay a loan. ...
The form that lists the settlement charges the borrower must pay at closing, which the lender is obliged to provide the borrower within three business days of receiving the loan application. ...
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